United States: The Philadelphia Wage Equity Bill Will Ban Employers From Asking Prospective Employees About Their Past Wages And Fringe Benefits

On December 8, 2016, the Philadelphia City Council passed a Wage Equity Bill that prohibits employers from asking about a prospective employee's wage and fringe benefits history.1 The Bill has been publicly supported by Philadelphia Mayor Jim Kenney's Office, but has not yet been signed it into law. If signed, the Bill will become effective 120 days later.

The Wage Equity Bill is intended to narrow the wage gap between men and women. The City Council cited a 2015 U.S. Census Bureau statistic that women are paid 79 cents for every dollar a man makes, and that the number is even lower for women of color. The City Council noted that federal legislation has done little to remedy this disparity, which has narrowed by less than one-half a cent per year since Congress passed the Equal Pay Act in 1963. As has become the trend in recent years, states and localities are taking matters into their own hands. In passing the Bill, the City Council recognized the Massachusetts law banning discussion of salary history that was enacted earlier this year.

In support of the Wage Equity Bill, the City Council found that allowing employers to ask about a prospective employee's wage history perpetuates the existing wage gap between men and women because, if known, an individual's wage history is considered when setting compensation for the position. In the City Council's view, compensation should be set based on the job responsibilities of the position at issue, and not based on the prior wages earned by the applicant.

Coverage

The Wage Equity Bill would add Section 9-1131 to the City's Fair Practices Ordinance, directly after a section added earlier this year regarding unlawful credit screening practices in employment. The Bill protects prospective employees and applicants, defined in the Fair Practice Ordinance as "any person considered for, or who requests to be considered for, employment by an employer."

The Bill applies to employers and employment agencies, defined in the Fair Practices Ordinance as including private and public employers of all sizes and their employees and agents:

  • Employer: "any person who does business in the City of Philadelphia through employees or who employs one or more employees exclusive of parents, spouse, Life Partner or children, including any public agency or authority; any agency, authority or other instrumentality of the Commonwealth; and the City, its departments, boards and commissions."
  • Employment Agency: "any person regularly undertaking with or without compensation to procure opportunities to work or to procure, recruit, refer or place employees."

This broad definition of "Employer" requires only "doing business in Philadelphia," either through employees or employing one or more employee (excluding family members) and public entities and agencies. Given the jurisdictional reach of the Philadelphia Human Relations Commission, this definition will likely be interpreted as reaching employers seeking to hire prospective employees to work at a physical or remote location within the City of Philadelphia.

Prohibited Conduct

The Bill makes it an unlawful employment practice for an employer, employment agency or their employees and agents to:

  • Require disclosure of or inquire about (by asking in writing or otherwise) a prospective employee's wage history;
  • Condition employment or consideration for an interview or employment on disclosure of wage history;
  • Retaliate against a prospective employee for failing to comply with any wage history inquiry or for otherwise opposing any act made unlawful by this chapter; or
  • Rely on the wage history of a prospective employee from any current or former employer of the individual in determining the wages for such individual at any stage in the employment process, including the negotiation or drafting of any employment contract, unless such applicant knowingly and willingly disclosed his or her wage history to the employer, employment agency, employee or agent thereof.

Thus, while an employer cannot ask or otherwise require disclosure of wage and fringe benefits history, if an applicant "knowingly and willingly" discloses the information, the employer may consider it when setting compensation. Exactly what "knowingly and willingly" means in this context is not defined in the Bill. There is also a safe harbor for any action taken by an employer or employment agency or their employee or agents "pursuant to any federal, state or local law that specifically authorizes the disclosure or verification of wage history for employment purposes."

"Wages" is defined broadly and includes fringe benefits: "all earnings of an employee, regardless of whether determined on a time, task, piece, commission or other method of calculation and including fringe benefits, wage supplements or other compensation whether payable by the employer from employer funds or from amounts withheld from the employee's pay by the employer."

Posting Requirement

The Bill requires employers to post and exhibit prominently in all places of business in the City of Philadelphia any fair practices notices prepared and made available by the Commission, which the Commission has designated for posting. We can expect the City to provide a poster on its website if the Bill is signed into law.

Enforcement

The Philadelphia Human Relations Commission ("Commission") will be tasked with administration and enforcement. Complaints may be initiated with the Commission by filing of a written, verified complaint within 300 days of the alleged violation. The respondent then must file an answer. If the parties are not interested in mediation, the Commission will generally investigate and come to a conclusion, either dismissing the complaint or finding probable cause, which will lead to request to engage in conciliation. In the event that conciliation fails, the Commission may conduct a public hearing and then issue a decision and order, which is subject to appeal in court.

There is also a private right of action. An aggrieved party has the right to file a complaint in the Philadelphia County Court of Common Pleas either after (1) the complaint has been pending with the Commission for one year, or (2) within two years from the date on which the Commission closes the case.

The remedies and penalties for violation of the duties set forth in the Wage Equity Bill are those available under the Fair Practices Ordinance, including compensatory damages, punitive damages, injunctive relief, reasonable attorney's fees, and payment of hearing costs. Penalties for repeat and/or willful violations include a fine of up to $2,000 per violation and in extreme cases, imprisonment of up to 90 days.

Practical Implications

If the Wage Equity Bill is signed into law, employers should consider the following:

  • Keep in mind that the Bill prohibits asking about, or requiring disclosure of, fringe benefits as well as wages.
  • While employers may not ask about, or require disclosure of, past wages and fringe benefits, applicants can "knowingly and willingly" volunteer this information. Employers should consider providing a written disclosure of rights under the Wage Equity Bill with the application, on application portals, or in the application process in order to prove that any applicant's disclosure was made willingly with knowledge of the applicant's rights.
  • Plan to comply with the Bill's posting requirements once the posters appear on the City's webpage. For employers with employees working remotely in Philadelphia, consider adding the content of the poster to an employee handbook supplement, providing it electronically and/or providing a paper copy.
  • The Bill will require revisions to applications and employee handbook and policy manuals relating to verification of employment, reference checks and anti-retaliation policies to ensure that prospective employees are not encouraged or required to provide past wage and benefits information, and that such information is not acquired accidently or from a source other than the applicant.
  • Management, staff and third-party providers handling recruiting and verification of employment should be informed of and trained on the new requirements. Forms used in these processes should be revised as necessary.
  • The Bill will also require employers to train all those involved in the recruiting, interview and compensation setting process not to inquire about prospective employees' past wages or fringe benefits, and to avoid conversation that may cause a prospective applicant to believe that he or she must disclose it to be considered for employment.
  • Employers can still ask what an employee is looking for in terms of wages or benefits, but the issue should be carefully approached and ideally, preceded by a disclosure of the provisions of the Wage Equity Bill, to ensure that any past wage or fringe benefits information provided was disclosed knowingly and willingly.
  • The Bill may cause employers to rely more on other sources of market data on wage rates and fringe benefits packages.

Littler will continue to monitor the Bill and provide updates on its expected enactment.

Footnotes

1 City of Philadelphia Bill No. 160840.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Martha Keon
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.