On January 23, 2017, Philadelphia Mayor Jim Kenney signed the Philadelphia Wage Equity Ordinance into law. The bill amends the Philadelphia Fair Practices Ordinance to prohibit employers from asking about an applicant’s wage history at any point during the hiring process. Philadelphia City Council unanimously voted in favor of the legislation in December 2016.

Introduced by Councilman-at-large William Greenlee, the Wage Equity Law is intended to reduce wage inequality, particularly among minorities and women. Companies often use a new hire’s prior salary as a baseline for setting the employee’s new compensation. By prohibiting companies from asking prospective employees how much they earned at their last jobs, the bill seeks to prevent unequal wages and salaries from following employees through their entire careers.

In addition to prohibiting employers from asking job applicants about their wage history, the ordinance prohibits employers from:

  • Requiring applicants to disclose their wage history
  • Conditioning employment or consideration for an interview on the disclosure of wage history
  • Retaliating against a job applicant for failing to disclose his or her wage history
  • Relying on a job applicant’s wage history from a current or former employer to determine the wages for that individual at any stage of the employment process

An employer may rely on an applicant’s wage history only if the applicant knowingly and willingly discloses his or her wage history to the employer.

The law goes into effect May 23, 2017.

Philadelphia’s Wage Equity Law represents the latest attempt to address wage gaps by introducing legislation that prohibits inquiries into salary history. California, New York, and – in August 2016 – Massachusetts, all passed similar legislation.  Philadelphia is the first city to enact this type of legislation.

The Wage Equity Law is not without its detractors, and we anticipate legal challenges. The Philadelphia city solicitor has taken the position that the ban is legal. Nonetheless, it is possible that a court would enjoin the enforcement of the Ordinance, pending judicial review.