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(a) In San Francisco, women are paid on average 84 cents for every dollar a man makes, according to the 2015 United States Census Bureau report. Women of color are paid even less. African American women are paid only 60 cents to each dollar paid to men. Latinas are paid only 55 cents to each dollar paid to men.
(b) According to the National Committee on Pay Equity, the gender wage gap has narrowed by less than one-half a penny per year in the United States since 1963, when Congress passed the Equal Pay Act, the first law aimed at prohibiting gender-based pay discrimination.
(c) The problematic practices of seeking salary history from job applicants and relying on their current or past salaries to set employees’ pay rates contribute to the gender wage gap by perpetuating wage inequalities across the occupational spectrum. Women are paid less than men in 99.6% of the occupations and are more likely to face enduring financial losses for taking time out of the paid workforce due to childbearing and family caregiving responsibilities.
(d) When employers make salary decisions during the hiring process based on prospective employees’ current or past salaries or require employees to disclose current or past salaries as part of the application process or during salary negotiations, women applicants often end up at a significant disadvantage. In effect, to the extent employers consider applicants’ salary history in setting salaries of new hires, historical patterns of gender bias and discrimination repeat themselves, causing women to continue earning less than their male counterparts and less than they would have earned, but for their gender.
(e) In 2015, on Equal Pay Day, the Chair of the Equal Employment Opportunity Commission (EEOC) advised employers on important steps they could take to ensure equal pay for equal work, including eliminating “discriminatory pay gaps on the basis of prior salary” and the 2005 EEOC Compliance Manual states that “prior salary cannot, by itself, justify a compensation disparity.”
(f) In July 2015, the acting director of the Federal Office of Personnel Management provided guidance on advancing pay equality in the federal government, warning that reliance on salary history “could potentially adversely affect a candidate who is returning to the workplace after having taken extended time off from his or her career or for whom an existing rate of pay is not reflective of the candidate’s current qualifications or existing labor market conditions.”
(g) Courts also have warned against relying on salary history and have stated that prior salary cannot, by itself, justify a wage disparity. In Corning Glass Works v. Brennan, (1974) 417 U.S. 188, at 205, the United States Supreme Court held that a pay differential which “ar[ises] simply because men would not work at the low rates paid women . . . and reflect[s] a job market in which [the employer] could pay women less than men for the same work” is not based on a cognizable factor other than sex under the Equal Pay Act (Public Law 88-38).
(h) More recently, in its order in Rizo v. Yovino, Fresno County Superintendent of Schools, (Case No. 1:14-cv-0423-MJS (E.D. Cal. December 18, 2015), pp. 16-17), the federal district court denied summary judgment on defendant’s motion under the federal Equal Pay Act based on finding that, “a pay structure based exclusively on prior wages is so inherently fraught with the risk - indeed, here, the virtual certainty - that it will perpetuate a discriminatory wage disparity between men and women that it cannot stand, even if motivated by a legitimate non-discriminatory business purpose.” The court went on to explain that, “say[ing] an otherwise unjustified pay differential between women and men performing equal work is based on a factor other than sex because it reflects historical market forces which value the equal work of one sex over the other perpetuates the market’s sex-based subjective assumptions and stereotyped misconceptions Congress passed the Equal Pay Act to eradicate.”
(i) Since women are paid on average lower wages than men, basing wages upon a worker’s wage at a previous job often serves to perpetuate gender wage inequalities and leaves families with less money to spend on food, housing, and other essential goods and services.
(j) In August 2016, the California State Assembly passed AB 1676 specifying that prior salary cannot, by itself, justify any disparity in compensation.
(k) Combatting gender discrimination by prohibiting consideration of an applicant’s current or past salary is emerging as an important policy for promoting gender equity in employee salaries. In August 2016, Massachusetts became the first state to enact a law prohibiting employers from seeking or requiring a prospective employee’s wage history.
(l) If an employer is able to ask a potential employee for their prior salary, it is unlikely that this information would not be a factor in negotiating or setting a salary offer.
(m) This Article 33J will help ensure that an individual’s prior earnings, which may reflect widespread, longstanding, gender-based wage disparities in the labor market, do not continue to weigh down a woman’s salary throughout her career.
(n) This measure will also help ensure that both employers and workers are able to negotiate and set salaries based on the qualifications of the person and the job in question, rather than on an individual’s prior earnings, which may reflect widespread, longstanding, gender-based wage disparities in the labor market.
(Added by Ord. 142-17, File No. 170350, App. 7/19/2017, Eff. 8/18/2017, Oper. 7/1/2018)