Philadelphia Salary History Ban Partially Blocked
Author: David B. Weisenfeld, XpertHR Legal Editor
May 4, 2018
Philadelphia's ban on salary history questions violates the First Amendment and that provision may not take effect, a federal judge has ruled. However, US District Judge Mitchell S. Goldberg also called the Philadelphia ordinance "a significant positive attempt to address the wage gap" and upheld a separate provision that forbids employers from basing hiring decisions on salary history.
Philadelphia enacted one of the nation's first salary history-question bans in January 2017. But the law has been on hold pending a challenge by the Chamber of Commerce for Greater Philadelphia seeking an injunction.
As of 2015, Pennsylvania women earned 79 cents for every dollar a man earns for performing similar work, and African-American women earned 68 cents for every dollar a man earns. Thus, Judge Goldberg said, the existence of a wage gap is not disputed.
Nonetheless, he noted that acquiring wage history is allowed in other contexts, such as for gathering market information or identifying applicants whom employers can or cannot afford. Inquiring about wage history itself, the federal court found, is not an offer to engage in otherwise-illegal activity.
But the court added that the ordinance's reliance provision - making it unlawful for employers, employment agencies, or their employees or agents to rely on a prospective employee's wage history to determine his or her salary - withstands constitutional scrutiny. The court reasoned that a company's reliance on wage history is not speech.
"The message still for employers is that you just have to be extremely careful about using salary history information even where it's allowed," said Cheryl Pinarchick, who co-chairs the Pay Equity Practice Group at Fisher Phillips. In an interview with XpertHR, Pinarchick summed up the court's ruling by saying, "You can ask about it [salary history], but you can't actually do anything with it."
To the extent that a city or state otherwise prohibits the use of salary history in determining an employee's compensation, Pinarchick said a successful challenge to a restriction on asking for salary history information itself is of limited usefulness. That's why the Chamber of Commerce has said it intends to appeal Judge Goldberg's decision to the 3rd Circuit Court of Appeals.
Last month, the San Francisco-based 9th Circuit Court of Appeals ruled that an employee's prior salary cannot justify a pay gap between men and women for performing similar work in Rizo v. Yovino. Pinarchick sees the federal court's ruling on the Philadelphia ordinance as consistent with that ruling.