The Philadelphia City Council recently passed Bill No. 160840, a wage equity ordinance (the “Ordinance”), that will amend Philadelphia’s Fair Practices Ordinance to prohibit employers or employment agencies from inquiring about the wage history of potential employees. Among other things, the Ordinance also includes an anti-retaliation provision, which prohibits any form of retaliation against a prospective employee for failing to comply with a wage history inquiry.
More specifically, the Ordinance provides that it is an unlawful employment practice for a covered employer to:
- inquire about a prospective employee’s wage history;
- require disclosure of wage history;
- condition employment or consideration for an interview on disclosure of wage history; or
- retaliate against a prospective employee for failing to comply with any wage history inquiry.
Furthermore, the ordinance also makes it an unlawful employment practice for an employer to “rely on the wage history of a prospective employee from any current or former employer when determining the wages for such individual at any stage in the employment process,” which includes the negotiation or drafting of any employment agreement. However, the Ordinance does provide an exception that permits an employer to rely on any wage information that is knowingly and willingly disclosed by an applicant.
It is important to note that this Philadelphia Ordinance will take effect 120 days after it is signed into law by Mayor Jim Kenney, who has expressed his support. Accordingly, if the Ordinance is signed this month, employers in Philadelphia can expect to see the Ordinance take effect in May of this year.
In anticipation of the enactment of this Ordinance, Philadelphia employers can prepare by:
- removing any questions on employment applications that may in any way seek information about salary or wage history;
- train hiring managers and interviewers to avoid asking questions about an applicant’s wage history;
- refrain from relying on an individual’s wage history (if known) when deciding the appropriate wages/salary to pay a prospective employee; and
- review existing policies and practices to ensure compliance with the Ordinance.
This Philadelphia Ordinance is recent example of a growing trend to prohibit employers from requesting and relying on an applicant’s wage history. This trend has emerged in an effort to address what many call the “gender pay gap.” In light of these recent actions by state and local governments, employers across Pennsylvania and beyond should stay informed about further developments in this area, as similar laws may soon be proposed and enacted in other locations.