Philadelphia poised to become first city with law banning employers from asking about past pay

By JoAnn Seltzer | Dec 16, 2016

PHILADELPHIA – Philadelphia may become the first city in the nation to prohibit employers from asking prospective employees how much they were paid at their last jobs.

The Philadelphia City Council has approved amending its fair practice ordinance because of the discrepancy between what women are paid compared to men. The council based its action on 2015 census bureau report statistics that say women are paid 79 cents for every dollar men make. The census shows African-American women are paid just 68 cents for every dollar men make.

In August, Massachusetts passed a similar law banning employers from collecting a prospective employee's wage history. The Philadelphia City Council says salaries should be based on the responsibilities of the job, not a person's past wage history. California has passed a similar law as well, but both in Massachusetts and California the law was passed by states, not cities.

“This is the first city that I'm aware of nationwide that has passed any law prohibiting it,” W. John Lee, a law partner at Morgan Lewis, told the Pennsylvania Record. “New York City is considering a similar bill currently, but it hasn't been passed yet. The mayor of New York has issued an executive order prohibiting city agencies from inquiring about prior pay."

The ordinance, which must be signed by Philadelphia Mayor Jim Kenney before it becomes law, will basically amend Philadelphia's Fair Practices Law to prohibit discrimination in the work place, Morgan said.

If a person feels they have been discriminated against for failing to reveal their past wages, they can file a complaint with the Philadelphia Human Right Commission, which would then investigate the claim, he said. If a violation is found there are several actions that be taken.

“The Philadelphia Commission on Human Rights can enforce the ordinance and can do so through issuing a cease and desist order, or order injunctive relief and require the payment of damages and attorney fees if they find a violation,” Lee said.

Lee said the laws are fairly new in California and Massachusetts and he is not aware of any challenges or interpretations regarding the provisions yet.

“I think the implications are that employers who do business and recruit applicants within Philadelphia need to be mindful of this and prepare for it going forward,” Lee said.

The law may put Philadelphia employers at a disadvantage when it comes to recruiting new employees. Lee said he would not be surprised if employers decided to challenge it if it is signed into law.

“There may be some employers who want to challenge the provision, it's obviously a sea change in terms of how almost every company makes initial pay decisions,” Lee said. “It's very commonplace, obviously, when you're trying to recruit talent from another competitor or from a different industry that the pay offer has to be competitive and this is obviously an impediment to that.”

The ordinance says it is unlawful for an employer to take retaliatory action against a prospective employee who does not reveal his or her previous salary. This is another aspect of the proposed law that could be open to interpretation.

It would have to be decided if an employer failing to offer a job to a prospective employee who did not reveal a past salary is an act of retaliation. This is something that the court would have to decide by looking at the situation and past retaliation case law, Lee said.

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