Appeals Court Rules in Favor of Philadelphia Salary History Question Ban

Men and women with question marks.

Written By ESR News Blog Editor Thomas Ahearn

On February 6, 2020, the United States Court of Appeals for the Third Circuit ruled in Greater Philadelphia Chamber Commerce v. City of Philadelphia (Nos. 18-2175 & 18-2176) that the city of Philadelphia, Pennsylvania, could ban employers from asking applicants about their salary history in a decision that could have nationwide implications for the equal pay movement and wage equity between men and women.

The Greater Philadelphia Chamber of Commerce had filed a lawsuit against the city of Philadelphia that claimed a wage equity law passed in 2017 infringed on the freedom of speech of employers. The opinion written by Judge Theodore McKee reversed a 2018 lower court decision that said the city could ban employers from relying on salary history to set wages but not from asking about salary history.

Judge McKee wrote in the opinion that the salary history question ban does limit the free speech of employers but “only because that limitation prevents the tentacles of any past wage discrimination from attaching to an employee’s subsequent salary.” He also wrote that the city’s evidence was “sufficient” to show the salary history question ban would help to narrow the wage gap between men and women.

According to the National Committee on Pay Equity (NCPE), the gender wage gap has narrowed by less than one-half a penny per year in the United States since the Equal Pay Act (EPA) of 1963 was passed. In addition, women earned 80 percent of what men earned in 2015, statistics from the U.S. Census Bureau revealed. As a result, laws prohibiting employers from asking about salary history have increased to close this gap.

As of February 2020, salary history bans exist in cities such as Atlanta, Chicago, Cincinnati, Kansas City, Louisville, New Orleans, New York City, Philadelphia, Pittsburgh, and San Francisco. The states of California, Connecticut, Delaware, Hawaii, Illinois, Maine, Massachusetts, Michigan, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Vermont, and Wisconsin have also passed similar laws.

Equal pay discrimination lawsuits filed by the U.S. Equal Employment Opportunity Commission (EEOC) – a federal agency enforcing laws prohibiting employment discrimination – will make employers focus on salary history question bans in 2020, according to the “ESR Top Ten Background Check Trends” compiled by leading global background check firm Employment Screening Resources® (ESR).

The equal pay discrimination lawsuits filed by the EEOC in 2019 – which several employers settled for thousands of dollars – claimed those employers underpaid women who performed substantially equal work under similar working conditions as men in violation of the EPA and Title VII of the Civil Rights Act of 1964 that prohibit discrimination in compensation on the basis of sex.

In October 2019, a health care firm paid $50,000 for paying female nurses less than a male nurse. In May 2019, a school district paid $11,250 for paying a female principal less than male principals. In April 2019, a manufacturer paid $77,500 for paying a female employee less than a male doing the same work. In January 2019, an insurance firm paid $36,802 for paying female investigators less than male investigators.

“When an employer has a background screening firm perform past employment verifications, it is critical that the firm knows which cities, counties, and states prohibit salary history questions, or else that employer could be fined,” explained Attorney Lester Rosen, founder and chief executive officer (CEO) of Employment Screening Resources® (ESR), which offers legally compliant past employment verifications.

Rosen – author of “The Safe Hiring Manual” – will host a live complimentary webinar titled “Top Ten Background Check Trends for 2020” that will take place on Thursday, February 27, 2020, from 11:00 AM to 12:00 PM Pacific Standard Time. To register for the webinar, please visit https://info.esrcheck.com/resources/webinar/2020-top-ten-background-check-trends.

NOTE: Employment Screening Resources® (ESR) does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.

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