San Francisco has become the latest jurisdiction to pass a law restricting employers from inquiring about prior salary history during the hiring process.  The ordinance, which will go into effect on July 1, 2018, will restrict employers from: (i) considering or relying on an applicant’s salary history as a factor in determining whether to make an offer of employment or what salary to offer; (ii) inquiring about an applicant’s salary history; (iii) refusing to hire or otherwise retaliating against an applicant based on failure to provide salary history; and (iv) releasing the salary history of a current or former employee to that person’s employer or prospective employer without written authorization from the current or former employee. 

Employers will, however, be able to: (i) consider voluntarily disclosed or authorized salary history in determining salary for an applicant and/or verify the salary history information the applicant has voluntarily disclosed; and (ii) without inquiring about salary history, engage in discussion about the applicant’s expectations with respect to salary, including unvested equity or deferred compensation or bonus that an applicant would lose or forfeit by virtue of leaving current employment. 

Employers will have a one year grace period (i.e., until July 1, 2019) during which San Francisco will issue written warnings and notices to correct but will not penalize employers for violation of the new ordinance. Thereafter, monetary penalties will be issued for violations.

San Francisco employers should review their applicant screening and hiring policies to ensure compliance with the new ordinance.