As outlined in a previous post, the Philadelphia Wage Equity Ordinance is back in play. And now that the litigation dust has settled, the city announced that the Philadelphia Commission on Human Relations (“PCHR”) will begin enforcing the ordinance on September 1, 2020.
As a reminder, the Ordinance prohibits all employers, employment agencies, or their agents from asking about a job applicant’s current or prior salary history during the application or hiring process if the position is located in Philadelphia. Shortly after the salary history ban was announced, the Chamber of Commerce for Greater Philadelphia sued to block it from going into effect on free speech grounds. The case proceeded to the Third Circuit, which ultimately held that the ordinance was constitutional in a unanimous decision issued this February.
The PCHR recently issued a set of FAQs which provide some useful information for employers, including whether the ordinance applies to internal candidates (no), whether an employer can rely on market data for salaries (yes), and whether an employer can ask a job applicant about their salary expectations (yes, but employers should not ask candidates if their salary “expectation” is tied to their current or prior salary history). The FAQs also outline suggested best practices for compliance, including:
Focusing questions on the applicant’s salary demands, experience, skills, and qualifications during the interview process;
Establishing salary ranges or pay scales for open positions;
Creating or modifying written policies to reflect compliance with the ordinance;
Training interviewers, hiring staff, and other applicable staff regarding compliance;
Refraining from seeking prior salary history from other sources, including a former employer or public records;
Instructing background reporting agencies to exclude information found regarding an applicant’s salary history; and
Developing protocols for discarding or isolating salary information that employers inadvertently receive but are prohibited from considering.
Job applicants who are asked about their salary history in violation of the ordinance can file a complaint with the PCHR and may be awarded compensatory damages, punitive damages, reasonable attorneys’ fees, costs, injunctive relief, or other relief. Employers are prohibited from retaliating against applicants who refuse to provide their salary history.
We recommend contacting a member of Blank Rome’s Labor & Employment team as soon as possible to ensure that your hiring process and practices follow the ordinance’s requirements, and that your staff understands the do’s and don’ts of the new law. We are happy to answer any questions about compliance or updating your policies and procedures, or to schedule a training.
Effective immediately, Philadelphia employers are prohibited from asking job applicants about their salary, wage, and benefits history.
As a bit of background, in 2016, the Philadelphia City Council passed an ordinance banning salary, wage, and benefits history inquiries by employers (and also barring employers from setting a new hire’s initial pay based on their salary history), which was signed into law in January 2017. However, the ban on salary and wage history inquiries has been on ice since April 30, 2018, when it was enjoined by the United States District Court for the Eastern District of Pennsylvania. Today, the U.S. Court of Appeals for the Third Circuit dissolved the district court’s injunction; therefore, Philadelphia employers must immediately stop asking job applicants about their salary, wage, and benefits history. The Third Circuit also upheld the lawfulness of the ordinance’s bar on using salary history to set initial pay.
Please contact a member of Blank Rome’s Labor & Employment practice group if you have any questions about compliance with Philadelphia’s salary, wage, and benefits ban or any other employment issues.
New Jersey and New York are the latest states to prohibit employers from asking job applicants about their pay history and considering pay information in making employment decisions.
In New Jersey, effective January 1, 2020, private employers cannot screen applicants based on their pay history. Employers also cannot require an applicant’s salary history satisfy a certain minimum or maximum criteria. Employers may not consider an applicant’s refusal to provide compensation information in making an employment decision.
Effective January 1, 2020, private employers in New Jersey are prohibited from asking job applicants about their salary, wage, and benefit history and are not permitted to make hiring decisions based on that information. Employers will also be prohibited from requiring that an applicant’s salary history satisfy certain minimum or maximum requirements.
There are notable exceptions to this prohibition, which include the following:
If an applicant “voluntarily, without employer prompting or coercion,” discloses salary or wage information, the employer may verify whether the information was accurate and use the information to determine compensation to be paid to the applicant;
An employee is applying for internal transfer or promotion with a current employer;
Actions taken by an employer pursuant to a federal law or regulation that expressly requires the disclosure or verification of salary history for employment purposes; and
After an offer of employment has been made that includes an explanation of the overall compensation package, an employer may confirm an applicant’s salary history upon the applicant’s written authorization.
Employers who violate the law can be fined up to $1,000 for a first offense, $5,000 for a second offense, and $10,000 for violations thereafter.
Please contact a member of Blank Rome’s Labor & Employment practice group if you have any questions about compliance with New Jersey’s salary and wage ban or any other employment issues.
As part of the New York State Legislature’s push to pass legislation at the end of its 2019 Session, three anti-discrimination bills have been passed and sent to the governor for consideration. If signed into law by Governor Cuomo (as expected), the bills will: (i) prohibit employers from inquiring into job applicants’ wage or salary history; (ii) expand the protections of existing equal pay laws; and (iii) ban discrimination based on hair or hairstyle. The salary history ban and equal pay law amendments will go into effect 180 days after enactment, and the hair/hairstyle law will go into effect immediately upon signature. Continue reading “Protect Our Employees! End of Legislative Session Marked by Employee-Friendly Changes”