Executive Summary: The City of Philadelphia amended its Fair Practices Ordinance (Ordinance) on January 23, 2017, to prohibit employers from inquiring about an applicant’s wage history during the hiring process. The law is the first of its kind adopted by a city in the United States and takes effect on May 23, 2017.

Purpose

The Ordinance is based upon the Philadelphia City Council’s belief that “[i]n Pennsylvania, women are paid 79 cents for every dollar a man makes.” Based upon these and other “findings” by the Council, the Ordinance is designed to narrow the gender wage gap.

Unlawful Employment Practices

To that end, the Ordinance creates several new unlawful employment practices, including:

  • inquiring about or requiring disclosure of a prospective employee’s wage history;
  • conditioning employment or consideration for an interview on disclosure of wage history;
  • relying on wage history—at any stage in the employment process—to determine wages for the new hire; and
  • retaliating against a prospective employee for failing to comply with a wage history inquiry or otherwise opposing an act outlawed by the Ordinance.

The Ordinance also requires employers to post notices referencing the new requirements. These notices will be available from the Philadelphia Commission on Human Relations.

Exceptions

The Ordinance excludes actions by employers or employment agencies authorized by a federal, state, or local law allowing disclosure or verification of wage history for employment purposes. The Ordinance also allows employers to rely on wage information knowingly and willingly disclosed by the prospective employee.

Full text of the Ordinance can be found here.

Employers’ Bottom Line:

Philadelphia employers must review hiring procedures and protocols, including their job applications, to remove any reference to a candidate’s prior salary or wages. In addition to obtaining the new posting (when it becomes available), employers should train human resources personnel, internal recruiters, and hiring managers about these new unlawful practices. That a private right of action is now available to candidates/employees under the Ordinance increases the risk of litigation if Philadelphia employers fail to proactively review and revise existing hiring policies and procedures.