Philadelphia Soon to Enforce Ban on Wage History Inquiries

August 10, 2020

Philadelphia’s Wage Equity Ordinance, which was enacted in 2017, will finally start being enforced by the Philadelphia Commission on Human Relations (PCHR) on September 1, 2020. Following an unsuccessful judicial challenge, the city now has adopted regulations to guide employers. The law applies to any search with a new employee for a position located within the City of Philadelphia.

The law makes it illegal for employers, employment agencies or their agents to ask about an applicant’s or prospective employee’s current or prior salary history during the application or hiring process.

If the job position is located in Philadelphia, the ordinance applies; it does not matter where the employer is headquartered or where the interview occurs. A job that does not require an employee to spend all of their working hours in Philadelphia can still be covered by the law depending upon the job’s overall ties to Philadelphia. Relevant factors may include, among many others, how much time the employee will spend in the city, whether the employee will maintain an office or workstation in the city, and the extent of the employee’s contacts with the city, such the location of customers, projects or transactions.

The law does not prohibit employers from obtaining and using market salary information from other sources, such as aggregate studies or surveys that cannot be used to ascertain the specific salary histories of individual job applicants.

An employer CAN ask a job applicant how much they want to get paid. Asking for salary expectations is permissible.

An employer CAN ask:

  • “How much would you like to be paid for the job that you applied for?”
  • “This job pays $ ___ per hour. Is that acceptable to you?”

A job application CAN contain a field or question asking for “salary requirements” or “salary expectations.”

An employer CANNOT ask a candidate if their salary “expectation” is tied to their current or prior salary history.

An employer CAN ask a job applicant other relevant questions, such as questions about the applicant’s skills, education, experience, or objective measures of productivity that do not require disclosure of salary history – like revenue, sales, production reports, or profits generated.

An employer CAN ask a prospective employer about competing offers and counter offers that the applicant has received and the value of those offers.

Although not mandated by the law, the PCHR recommends the following as best practices:

  • During the application and interview process, focus questions on the applicant’s salary demands, experience, skills and qualifications.
  • Establish salary ranges or pay scales for open positions.
  • Create or modify written policies to reflect compliance with the Wage Equity Ordinance.
  • Train interviewers, those who make hiring decisions and other applicable staff regarding compliance with the law.
  • Refrain from seeking prior salary history from other sources, such as asking the applicant’s current or former place of employment about their salary history or searching public records for information about the job applicant’s salary history.
  • If the employer uses a background reporting agency, instruct it to exclude any information found regarding the job applicant’s salary history.
  • Develop protocols for discarding or isolating salary information that employers receive inadvertently but are prohibited from considering.

This law can be challenging when a company acquires a company with employees located within Philadelphia, so it is best to consult with legal counsel in these situations.

For violations, the law provides for the recovery of compensatory damages, punitive damages, reasonable attorneys' fees and costs and to seek injunctive relief or other appropriate relief. The law also specifically prohibits employers from retaliating against job applicants for refusing to provide their salary histories.