It is now official, and, presumably, final. Philadelphia employers now may not ask prospective employees about their salary history. Specifically, an employer may not:
- Ask for or about a job candidate’s wage history;
- Require a disclosure of a job candidate’s wage history;
- Condition hiring on the disclosure of the job candidate’s wage history; or
- Retaliate against a job candidate who does not provide wage history.
These requirements are required by Philadelphia’ Wage Equity Ordinance.
Signed into law by Mayor Kenney in early 2017, the Ordinance is intended to discourage implicit wage discrimination. The concept behind the ordinance is in essence that because women have not historically received equal pay compared to their male counterparts, allowing hiring and compensation decisions regarding new employees to be made on this past, inequitable salary history would further entrench the problem now and in the future. The findings of the Ordinance lay out the problem in greater detail: “African American women are paid only 68 cents to the dollar paid to a man, Latinas are paid only 56 cents to the dollar paid to men, and Asian women are paid 81 cents to a dollar paid to men . . . Since women are paid on average lower wages than men, basing wages upon a worker’s wage at a previous job only serves to perpetuate gender wage inequalities and leaves families with less money to spend on food, housing and other goods and services.”
The Ordinance has two pertinent provisions: (1) it made it illegal for any “employer” (see below) to inquire into a candidate’s salary history (the “anti-inquiry requirement”) and (2) it made it illegal for an employer to rely on wage history to set the candidate’s salary (the “anti-reliance requirement”).
Almost immediately, the Philadelphia Chamber of Commerce challenged the decision in Federal District Court on First Amendment grounds (i.e., the Ordinance was claimed to violate the employer’s right to free speech because the employer could not ask certain questions). In 2018, the Federal District Court (the trial court) struck down the Ordinance as it related to the anti-inquiry requirement, but left intact the anti-reliance requirement. Not satisfied, the Chamber of Commerce appealed the decision. On February 6, 2020, the Court of Appeals vacated the District Court’s Order. Both the anti-inquiry requirement and the anti-reliance requirement are valid and enforceable laws.
Keep in mind that: (1) if you are “any person who does business in the City of Philadelphia through employees” and you “engage in the process of interviewing a Prospective Employee for a position located within the City” you are an employer; and (2) wage history includes generally all forms of compensation history including salary, fringe benefits or commission.
Bottom line: There are many areas an employer may not delve into in an interview, including race, national origin, religion, sex, gender identity/orientation, pregnancy, disability, age, marital status and citizenship. In Philadelphia, add wage history to the list.
Needless to say, employers need to be careful with the questions they ask in a job interview. The rights of the job candidate must be balanced against the employer’s need for information about the potential employee and his or her skill set and suitability for the job. The employer must be able to solicit relevant information to make an informed hiring decision while at the same time respecting the job candidate’s rights. This can be a legal tightrope and we would be happy to counsel our clients in this evolving area.
— Rod Fluck