On September 1, 2020, the Commission on Human Relations began enforcement of Philadelphia’s Wage Equity Ordinance. Although the bill was originally signed into law in 2017, enforcement was delayed due to litigation related to its constitutionality.[1]
Bill No. 160840 prohibits employers or employment agencies from inquiring about salary history or requiring applicants to disclose salary history during the application or hiring process. Additionally, employers may not rely on “the wage history of a prospective employee from any current or former employer of the individual in determining wages…at any stage in the employment process” unless the applicant knowingly and willfully discloses his/her wage history. The law applies to all interviews, applications and hiring decisions made on or after September 1, 2020.
Similar to other ‘salary history ban’ legislation, the premise is that salary offers should be based on the job responsibility of the position sought and not based on the prior wages earned in order to prevent the cycle of pay disparity.
Employers that follow any federal, state, or local law that “specifically authorizes the disclosure or verification of salary history for employment purposes” are exempted. In terms of enforcement, individuals must first file a complaint with the Philadelphia Commission on Human Relations will enforce the ordinance before they can file suit against the employer.
The Commission also published an FAQ that defines terms, answers common employer questions and provides suggestions on implementation of best practices. For example, the FAQ further clarifies that:
Bill No. 160840 prohibits employers or employment agencies from inquiring about salary history or requiring applicants to disclose salary history during the application or hiring process. Additionally, employers may not rely on “the wage history of a prospective employee from any current or former employer of the individual in determining wages…at any stage in the employment process” unless the applicant knowingly and willfully discloses his/her wage history. The law applies to all interviews, applications and hiring decisions made on or after September 1, 2020.
Similar to other ‘salary history ban’ legislation, the premise is that salary offers should be based on the job responsibility of the position sought and not based on the prior wages earned in order to prevent the cycle of pay disparity.
Employers that follow any federal, state, or local law that “specifically authorizes the disclosure or verification of salary history for employment purposes” are exempted. In terms of enforcement, individuals must first file a complaint with the Philadelphia Commission on Human Relations will enforce the ordinance before they can file suit against the employer.
The Commission also published an FAQ that defines terms, answers common employer questions and provides suggestions on implementation of best practices. For example, the FAQ further clarifies that:
- Employers can still ask an applicant about competing offers from prospective employers without being in violation.
- Employers are generally allowed to ask applicants how much they want to get paid given the question is not framed in a way that ties the expectation to their current salary (examples of permissible questions regarding salary expectation are provided).
- The ordinance may still apply for jobs that do not require an employee to spend all their working hours in Philadelphia, depending on the job’s overall ties to the city.
- “Knowingly and willingly”—as it relates to the applicant’s voluntary disclosure of salary history--is defined as an action taken voluntarily, with an understanding of the nature and quality of the act.
[1] In Chamber of Commerce for Greater Philadelphia v. City of Philadelphia and Pennsylvania Human Relations Commission, litigation over the law continued for several years specifically focused on the inquiry portion of the law which a lower court determined was unconstitutional. In 2020, the case finally reached a resolution with the U.S. Court of Appeals for the Third Circuit vacating the lower court’s ruling and finding the entire law to be constitutional.