Court Upholds Constitutionality of Philadelphia Salary History Ban

In January 2017, Ordinance Number 160840 was signed into law by the mayor originally set to take effect in May 2017.

Under the Ordinance, employers with one (1) or more employee are prohibited from:

• Inquiring into a prospective employee’s wage history, requiring disclosure of wage history, conditioning employment or consideration for an interview for employment based on disclosure of wage history, or retaliating against a prospective employee for failing to comply with any wage history inquiry.
• Relying on wage history at any stage in the employment process including the negotiation or drafting of any employment contract, unless the applicant knowingly and willingly disclosed his/her wage history.

You may be asking yourself – why are you just telling me about this now?

Following the passage of this ordinance, the Chamber of Commerce for Greater Philadelphia filed a lawsuit at which point the City Council determined to postpone the effective date of the ordinance until the matter was resolved.

In April 2018, the U.S. District Court for the Eastern District of Pennsylvania determined that the inquiry portion of the law (the first bullet above) was unconstitutional. However, the court determined that the other portion – making it illegal for an employer to rely on wage history at any stage in the employment process – did not violate the constitution and could take effect.

In 2020, the U.S. Court of Appeals for the Third Circuit vacated the lower court’s ruling and found the entire law to be constitutional. Employers must now comply with the law as drafted and should take immediate steps to review their hiring practices to determine if changes are required.