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Posts Tagged ‘Salary History Ban’

The Ban is Back – New Life Given to Philadelphia’s Salary History Ban

Posted on: February 10th, 2020

By: Courtney Mazzio

Back in 2017, Philadelphia was among the early adapters of the salary history ban that we see starting to trend nationwide. However, prior to the enactment of the Philadelphia wage equity ordinance, the Chamber of Commerce for Greater Philadelphia initiated an action against the City of Philadelphia, challenging the constitutionality of the salary history ban law, arguing the portion of the law that prevents employers from inquiring about an applicant’s wage history violated an employer’s free speech rights. The Eastern District of Pennsylvania did block that inquiry rule, finding that the law as written violated the First Amendment free speech rights of Philadelphia employers.[1] However, the court upheld the reliance provision of the law, which makes it illegal to rely upon wage history to set the employee’s compensation.

On February 6, 2020, the Third Circuit Court of Appeals overturned the decision on the inquiry rule, and the wage equity ordinance will now prohibit Philadelphia employers from doing the following: (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.[2]

The court reasoned that though new law does act to limit employers’ speech, it is “only because that limitation prevents the tentacles of any past wage discrimination from attaching to an employee’s subsequent salary.” Therefore, the court concluded that the goal of pay equity outweighed any limitations on free speech rights now placed on employers. Although this suit is not yet over and future legal challenges could ensue, we may start to see enforcement of this new law, so it is important for employers to think about revising their hiring practices to insure that potential employee interviews and applications do not impermissibly inquire into, or rely upon, prior compensation information. Moreover, employers should continue to remember that they may only use compensation information if the potential employee knowingly and willingly discloses the information, meaning, if the employer comes across the pay history information by another means, the employer cannot use the pay history information to inform its compensation decisions with regards to the potential employee.

If you have any questions, or would like more information, please contact Courtney Mazzio at [email protected].

[1] The Chamber of Commerce for Greater Philadelphia v. City of Philadelphia et al., No. 17-1548 (Apr. 30, 2018).
[2] The Chamber of Commerce for Greater Philadelphia v. City of Philadelphia et al., Nos. 18-2175 & 18-2176 (Feb. 6, 2020).

City of Cincinnati Joins Growing Number of States and Local Governments To Adopt Salary History Ban

Posted on: April 1st, 2019

By: Bill Buechner, Jr.

On March 13, 2019, the City of Cincinnati, Ohio adopted an ordinance prohibiting employers within the City of Cincinnati with 15 or more employees from inquiring about an applicant’s salary history (current or prior wage, benefits or other compensation) either on an application or during an interview. The ordinance also prohibits employers from relying on the salary history of an applicant in deciding whether to offer employment to an applicant or to determine the salary, benefits or other compensation for the applicant during the hiring process. The ordinance does not apply to any unit of local, state, or federal government except for the City of Cincinnati. The ordinance becomes effective in March 2020.

The City of Cincinnati’s adoption of its salary history ban is just the latest in an emerging trend of states and local governments prohibiting inquiries into the salary history of applicants. Since the beginning of 2019 alone, bans on inquiries into an applicant’s salary history have either been adopted or taken effect in Connecticut, Hawaii, Illinois, Michigan, the City of Atlanta and now the City of Cincinnati. A total of 11 states, Puerto Rico and 12 local governments have adopted some version of a ban on inquiries into an applicant’s salary history. Some bans apply only to city or state departments or agencies (New York, New Jersey, Illinois, Michigan, Pennsylvania, Atlanta, Chicago, Louisville, New Orleans, Kansas City and Pittsburgh), whereas other bans apply to public and private employers alike (California, Connecticut, Hawaii, Massachusetts, Oregon, Vermont, Puerto Rico, San Francisco, New York City, Philadelphia, Albany County NY, Suffolk County NY and Westchester County NY). Some bans prohibit not only inquiries into salary history, but also reliance on any salary information inadvertently obtained (including information voluntarily provided by the applicant), whereas other bans only prohibit inquiries into salary history. Some bans have been adopted via statute, ordinance or resolution, whereas other bans have been adopted via an executive order. The purpose of these bans is to eliminate the cycle of pay discrimination on the basis of sex that may be perpetuated by employers’ reliance on an applicant’s salary history either in making hiring decisions or pay decisions for new hires.

Bucking the trend outlined above, Michigan and Wisconsin passed statutes that went into effect in 2018 prohibiting local governments from adopting salary history bans. Also, a federal judge issued an injunction in 2018 enjoining enforcement of Philadelphia’s ban on inquiries into the salary history of applicants on First Amendment grounds. That decision, however, upheld Philadelphia’s prohibition against employers relying on an applicant’s salary history information in making hiring and pay decisions.

Each salary history ban has its own nuances and exceptions. Accordingly, employers with operations in a jurisdiction that has adopted a salary history ban in some form should consult with their employment counsel concerning what conduct is prohibited and modify their application, interviewing, hiring and pay practices as needed. Employers with operations in multiple jurisdictions (some of which may have a salary history ban) should consider whether it is prudent to follow one set of rules in jurisdictions that have adopted a salary history ban and another set of rules in jurisdictions that have not, or whether it makes more sense to adopt a uniform practice throughout the organization not to inquire about or rely on an applicant’s salary history in making hiring and pay decisions.

If you have any questions or would like more information, please contact Bill Buechner at [email protected].