On May 23, 2017, the City of Philadelphia becomes one of the rare jurisdictions to prohibit employers from asking about or relying on—subject to limited exceptions-- a prospective employee’s wage history in setting employee compensation and benefits.
Coverage: The law is currently written to apply to employers who do business in the City of Philadelphia, and it makes no reference to whether such employers must employ any employees within the City’s limits.
Effective: May 23, 2017
Action Required: Employers in Philadelphia should:
- Become familiar with the new obligations and potential penalties under the law;
- Review and revise existing applications, policies and practices;
- Review and revise, where necessary, the company’s processes for interviewing job applicants, negotiating and setting compensation, and verifying prior employment in order to ensure prohibited information is not solicited; and
- Contact your Human Resources Business Partner with any questions you may have.
Mayor Jim Kenney recently signed into law the City of Philadelphia’s Wage Equity Bill, effectively amending the Fair Practices Ordinance (“Ordinance”). The Ordinance makes it an unlawful employment practice “for an employer, employment agency, or employee or agent thereof” to “inquire about a prospective employee’s wage history, require disclosure of wage history, or condition employment or consideration for an interview or employment on disclosure of wage history.”
Within the meaning of the Ordinance, “to inquire” is defined as “to ask a job applicant in writing or otherwise.” Likewise, the term “wages” is defined broadly to include “all earnings of an employee, regardless of whether determined on time, task, piece, commission or other method of calculation and including fringe benefits, wage supplements, or other compensation whether payable by the employer from employer funds or from amounts withheld from the employee’s pay by the employer.”
The Ordinance also includes an anti-retaliation provision, prohibiting employers from taking adverse action against an applicant or employee who does not comply with a wage history inquiry. It further prohibits employers from relying on the wage history of a prospective employee provided by current or former employers of the prospective employee “in determining the wages for such individual at any stage in the employment process . . . unless such applicant knowingly and willingly disclosed his or her wage history” to the prospective employer. In other words, covered employers may still ask an applicant what his or her salary and benefits expectations are, and an applicant may knowingly and willingly disclose his or her salary and benefits history. Inquiries are also permitted where “any federal, state or local law . . . specifically authorizes the disclosure or verification of wage history for employment purposes.”
A prospective employee claiming to be aggrieved by a violation of the Ordinance may file a complaint with the Philadelphia Commission on Human Relations. Once the applicant or prospect’s remedies have been exhausted at the agency level, he/she may pursue a private civil action in court. Remedies available to a successful litigant include compensatory and punitive damages, attorneys’ fees, court costs, and injunctive relief. Employers found in violation also may be subject to administrative penalties.
The new law contains a posting requirement, and the City of Philadelphia has advised that it will make a poster and guidance, in the form of answers to Frequently Asked Questions, available on its website prior to the law’s May 23, 2017 effective date.
For further information, please contact your Human Resources Business Partner.