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FMG Law Blog Line

Posts Tagged ‘Massachusetts’

Philadelphia’s “Salary History Ban Law” Gets Banned!

Posted on: May 7th, 2018

By: Jen Ward and John McAvoy

More than a half-century after President JFK signed the Equal Pay Act, the gender pay gap is still with us. Women earn 79 cents for every dollar men earn, according to the Census Bureau.  What will it take to bridge that stubborn pay gap? Well, some believe we can and will reduce the impact of previous discrimination by not asking new hires for their salary history. Several cities and states agree with this approach and have passed legislation that prohibits employers from asking questions about an applicant’s salary history. In the cities and states where such laws have been passed, they are not without controversy.

Philadelphia passed a similar law last year. In response, Philadelphia’s Chamber of Commerce, backed by some of Philadelphia’s biggest employers, including Comcast and Children’s Hospital of Philadelphia (CHOP), filed suit against the City of Philadelphia challenging the constitutionality of the salary history ban law, arguing the portion of the law that prevents companies from inquiring about an applicant’s wage history violated an employer’s free speech rights.

On Monday, April 30, 2018, the Eastern District of Pennsylvania made two rulings with respect to Philadelphia’s salary history ban law in the matter of Chamber of Commerce for Greater Philadelphia v. City of Philadelphia, docket no. 2:17-cv-01548-MSG (E.D. Pa. Apr. 30, 2018) (Goldberg, J.).

First, the court found that the law as written violated the First Amendment free speech rights of Philadelphia employers. In sum, the court’s ruling is that employers can ask salary history questions.

Second, the court upheld the ‘reliance provision’ of the salary history ban law, which makes it illegal to rely upon that wage history to set the employee’s compensation.  This means that Philadelphia employers can ask salary history but cannot use it as a basis to set salary.  The purpose of this is to encourage employers to offer potential candidates what the job is worth rather than based on prior salary which could have been set based on discriminatory factors.

There is a prevailing trend nationwide for salary history ban laws. To date, California, Delaware, Massachusetts, Oregon, Puerto Rico, New York’s Albany County, New York City, and San Francisco have enacted salary history ban laws, and at least 14 other states are considering following suit.  Although we anticipate future and continued legal challenges, it seems likely that laws banning salary history inquiries will continue to gain ground, particularly in more progressive states or areas where the pay disparity directly impacts a large segment of eligible voters. As such, prudent employers should prepare themselves to address this new workforce right through smart planning and proper training of employees, including managers, supervisors and HR personnel responsible for ensuring a lawful hiring process.

Want to learn more about what Philadelphia’s salary history ban law means for your business? Let us help you by analyzing your hiring practices. Please call or email the employment experts Jen Ward (267.758.6012 [email protected]) and John McAvoy (215.789.4919 [email protected]). Our firm motto and goal is “Your Problem Solved!”

FINRA to Pick Up the Check on Unpaid Arbitration Awards?

Posted on: March 8th, 2018

By: Theodore C. Peters

As recently reported, unpaid FINRA arbitration awards is a growing problem.  As FINRA has acknowledged, roughly one quarter of FINRA arbitration awards issued in 2016 went unpaid.  If lawmakers have their way, FINRA itself may ultimately be stuck with the check, and be required to pay such awards.

On March 6, Sen. Elizabeth Warren, D-Mass, introduced legislation that would require FINRA to compensate investors for unpaid arbitration awards.  The Compensation for Cheated Investors Act would direct FINRA to establish a “relief fund” pool that could be used to provide investors with the full value of unpaid arbitration awards against brokerage firms or brokers regulated by FINRA.  The fund would derive “first from penalties paid by brokers and then from sources determined by FINRA.”  In the event FINRA fails to take steps to establish such a fund, the bill proposed by Sen. Warren would nevertheless require FINRA to compensate investors from its general budget.  The bill also provides that FINRA may require investors to subrogate their claims against brokers, and that FINRA may pursue additional remedies against the brokers.

Also of note, FINRA would not be permitted to limit the amount that an investor may receive from the relief fund, nor would FINRA be allowed to prohibit any investor from submitting a claim to the fund.  FINRA would also be required to annually disclose, among other things, the total number of arbitration awards issued in favor of investors against brokerage firms or brokers under its watch, the number and amount of unpaid awards, and the names of the brokerage firms/brokers at issue.

If you have questions or would like more information, please contact Ted Peters at [email protected].