On January 23, 2017, Philadelphia Mayor Jim Kenney signed into law a wage equity ordinance that makes it unlawful for an employer in the city of Philadelphia to ask about the wage history of a prospective employee at any stage of the hiring process. Under the new law, an employer may not condition employment on the job candidate’s disclosure of their wage history (which includes fringe benefits) or refuse to hire a candidate because of their refusal to respond to an inquiry about their past wages. The ordinance also prohibits employers from relying on a candidate’s wage history in order to determine the amount that it will offer a candidate unless the candidate has “knowingly and willingly” disclosed such information to the employer during the hiring process.
The stated goal of the ordinance is to reduce wage inequality among men, women, and minorities, which, according to the recitals set forth in the ordinance, is perpetuated by the practice of employers of asking their prospective employees about their past earnings. The law will be the first of its kind (Massachusetts passed a similar bill that will take effect in 2018). Not surprisingly, the ordinance has not been without its share of critics from within the business community who question whether the intrusive effect of the law on employers is disproportionate to its intended objective. Comcast has been among the law’s most vocal critics and has threatened to sue the City on the purported basis that the law violates employers’ free speech rights under the First Amendment.
The ordinance will take effect on May 23, 2017. Employers covered by the new ordinance should prepare themselves by taking measures to ensure compliance by the effective date. This should include, among other things, editing employment applications to remove any questions about a candidate’s wage history, making any necessary adjustments to wage inquiries that are made during the employment verification and background check stages of the hiring process, and training employees involved in the hiring process about the new requirements. The law will also require employers to post a notice once it is made available by the Philadelphia Commission on Human Relations.
