Legal Alerts

Get Ready Philadelphia Employers – Enforcement of the Wage Equity Ordinance Begins September 1, 2020

Philadelphia, Penn. (August 7, 2020) - The Philadelphia City Council has passed the Wage Equity Ordinance in an attempt to narrow the gender wage gap. According to the Ordinance, a 2015 United States Census Bureau report found that women in Pennsylvania were paid seventy-nine cents for every dollar a man earned. The rate for women of color was even lower: Black women received sixty-eight cents, Latinas received fifty-six cents and Asian women received eighty-one cents for every dollar a man earned.

The Philadelphia City Council determined that as a result of women on average receiving lower wages than men, an employer’s decision to base wages on an applicant’s wage at a previous job perpetuates the gender wage gap. Rather, salary offers should be based on the responsibilities of the position and not on the applicant’s prior wages. As a result, it is an unlawful employment practice for an employer, employment agency, or an employee or agent to:

1. Inquire about a prospective employee’s wage history, require disclosure of wage history, or condition employment or consideration for an interview or employment on disclosure of wage history;
    
2. Retaliate against a prospective employee for failing to comply with any wage history inquiry or for opposing an act made unlawful by the Wage Equity Ordinance; and
    
3. Rely on the wage history of a prospective employee from any current or former employer of the individual in determining the individual’s wages at any stage in the employment process, including the negotiation or drafting of an employment contract, unless the applicant knowingly and willingly disclosed his or her wage history to the employer, employment agency, employee, or agent.

However, the prohibition against relying on wage history does not apply to actions taken by an employer pursuant to any federal, state, or local law that specifically authorizes the disclosure or verification of wage history for employment purposes.

Employers should be aware that an inquiry concerning wage history includes requesting such information from an applicant in writing, as well as during an interview. Additionally, employers should be aware that the Ordinance defines “wages” to include all earnings of an employee, including fringe benefits, wage supplements, or other compensation, whether it is payable by the employer from the employer’s funds or from amounts withheld from the employee’s paycheck by the employer. As a result, employers should remove any questions concerning salary history, as well as benefits information, from employment applications and any other forms used during the hiring process.

Employers should also train Human Resources personnel, recruiters, managers, and any other personnel who might be involved in the hiring process of the new requirements under the Wage Equity Ordinance.

For more information on this law, contact the author of this alert. Find additional alerts on our Labor & Employment Practice page.

Author:

John M. Borelli, Associate

Editor:

Jade McKenzie, Associate

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