Philadelphia PA Begins Enforcing Wage Equity Ordinance Salary History Ban

Regulations

Written By ESR News Blog Editor Thomas Ahearn

On September 1, 2020, the Philadelphia Commission on Human Relations (PCHR) began enforcing the Wage Equity Ordinance to make it illegal for employers to ask applicants applying for a job in Philadelphia, Pennsylvania about their current or prior salary history or to use that information to determine wages.

The Ordinance – which is one part of Philadelphia’s antidiscrimination law called the Fair Practices Ordinance – applies to all interviews, applications, and hiring decisions made on or after September 1, 2020. While the bill was signed into law on January 23, 2017, enforcement of the Ordinance was put on hold due to litigation.

On February 6, 2020, the United States Court of Appeals for the Third Circuit ruled in Greater Philadelphia Chamber Commerce v. City of Philadelphia that the city could ban employers from asking applicants about their salary history in a decision that could help the equal pay movement and wage equity between men and women.

The Chamber of Commerce’s lawsuit against the city claimed the Ordinance 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 ruled the salary history question limits the free speech of employers “only because that limitation prevents the tentacles of any past wage discrimination from attaching to an employee’s subsequent salary.” He also ruled the city’s evidence was “sufficient” to show the ban would help to narrow the gender wage gap.

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 the gender pay gap. As of August 2020, salary history bans exist in American cities such as Atlanta, Chicago, Cincinnati, Kansas City, Louisville, New Orleans, New York City, Philadelphia, Pittsburgh, Salt Lake City, San Francisco, and St. Louis.

In addition, Alabama, California, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Vermont, Virginia, Washington, and Wisconsin have passed statewide laws. HRDive keeps a list of states and localities that have salary history bans.

The U.S. Equal Employment Opportunity Commission (EEOC) has settled several equal pay discrimination lawsuits with businesses and this will cause employers to focus more on salary history question bans, according to the “ESR Top Ten Background Check Trends” for 2020 compiled by Employment Screening Resources® (ESR).

“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 CEO of Employment Screening Resources® (ESR).

Founded by Rosen in 1997, Employment Screening Resources® (ESR) – a leading global provider of background checks – offers three levels of legally compliant past employment verifications to afford clients the flexibility to customize their verifications through unique business rules. To learn more about ESR, visit www.esrcheck.com.

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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