A federal appeals court just resurrected the salary history ban that will now prevent Philadelphia employers from asking job applicants about how much they are paid or setting new salaries based on pay history. Thanks to today’s 3rd Circuit Court of Appeals ruling, employers in Philadelphia must immediately alter their hiring practices and cease the practice of asking questions about compensation history on applications, in interviews, and at any stage during the hiring practice. You must also ensure that you do not use this forbidden information when setting new salary levels. What do employers need to know about today’s ruling and how best to come into compliance?

New Law, Explained

Salary history bans are quickly becoming more commonplace across the country and Philadelphia was among the first with it attempted to enact such a ban three years ago, before it became the subject of a legal battle. These laws aim to reduce pay inequality among gender and racial lines by reducing the chance that unfair past pay practices can be perpetuated as employees move from employer to employer. With today’s news, Philadelphia now joins the rank of at least 17 other states and 20 local jurisdictions that restrict the use of pay history.

The wage equity ordinance will now prohibit Philadelphia employers from taking any of the following steps:

  1. inquiring about a prospective employee’s wage history;
  2. requiring disclosure of wage history;
  3. conditioning employment or consideration for an interview on disclosure of wage history;
  4. retaliating against a prospective employee for failing to comply with any wage history inquiry; and
  5. relying on the wage history of a prospective employee in determining their wages unless they “knowingly and willingly” disclosed their wage history to the employer.

To learn more about the history of the law, and what employers should do, read the full article from the Fisher Phillips Legal Alert on February 2, 2020.