Closing the Salary Gap: Mayor Kenney Signs Philadelphia’s First Pay Equity Bill
Last month, Philadelphia’s City Council unanimously approved a pay equity bill—priming Philadelphia to become the first city in the nation to adopt comprehensive “wage-gap” legislation.
On January 23, 2017, three days before the deadline for signature, Mayor Kenney signed the Wage Equity Law, making Philadelphia the first U.S. city to prohibit employers from inquiring into a job applicant’s wage history. Effective May 23, 2017, it is an unlawful employment practice for a Philadelphia employer or employment agency to make any inquiry into a job applicant’s wage history during any stage of the employment process. The Wage Equity Law seeks to ferret out discrimination and address historic pay disparities among men, women and minorities.
Philadelphia’s Wage Equity Law is the most progressive wage gap legislation in the United States. Although modeled after the Massachusetts law which passed in August of 2016, Philadelphia’s Wage Equity Law is more far reaching. The Massachusetts law prohibits employers from requiring the disclosure of an applicant’s salary history as a condition for employment or consideration for employment. Conversely, the Wage Equity Law expressly prohibits Philadelphia employers from even asking about a prospective employee’s pay history.
Although the pay equity bill received unanimous support from City Council, there was widespread debate and speculation about the legality of such a wage inquiry ban. Specifically, members of the business community noted that the absolute prohibition against the mere inquiry into a prospective employee’s salary history violated employers’ First Amendment right to free speech.
In light of concerns raised about potential First Amendment violations, Philadelphia’s Law Department conducted a detailed legal analysis of the constitutionality of the Wage Equity Law and concluded that the law would withstand a First Amendment challenge.
Despite the uncertainty about how the Wage Equity Law will impact businesses’ operations recruitment and hiring processes in Philadelphia, the law is a bold statement of Philadelphia’s commitment to ending wage discrimination.
Philadelphia employers, recruiters and employment agencies should take note of this new law, and take steps to ensure compliance by May 23, 2017. For example, prior salary inquiries on job applications should be removed and personnel involved in recruiting or hiring should be made aware of the Wage Equity Law and trained on the new prohibitions regarding salary histories.