Salary-History Ban Coming to Philly

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Starting September
1st, in the city of Philadelphia, employers will be prohibited from inquiring
about a prospective employee’s pay history. This ban comes from a 2017 law that
has been bouncing through the courts. The Greater Philadelphia Chamber of
Commerce, for example, filed a suit on behalf of many of its members, alleging
that this ban would infringe on the chamber’s free speech. The 3rd Circuit
court finally concluded that the law is “not more extensive than necessary,”
and this does not prevent employers from obtaining wage market data. 

Rather than seeking a rehearing, the Chamber of Commerce for Greater
Philadelphia elected to collaborate with the city, and together with the
Philadelphia Commission on Human Relations (PCHR), drafted a guidance document.
This was approved on July 31st.  Ron Wonderling, president of the Chamber,
has stated that: 

“As
a result of the global pandemic and the dramatic and negative impact that it
has had on the business community, we are also very appreciative of the ample
time that was afforded to develop a balanced approach via the regulatory
process…It is our hope that the Wage Equity Ordinance will help in closing
the gender pay equity gap, while at the same time not placing a difficult
regulatory burden on the business community.”

The Society for Human
Resource Management (SHRM) has stated that employers when acting in good faith,
should be able to set salaries based on the organization. They argue that
knowing a prospect’s pay history allows them to make attractive offers while
keeping their own pay structure competitive. 

Employers should
carefully review their employment applications and hiring processes to ensure
that they do not inquire on salary history information. In particular, job
applications and new hire paperwork should be amended to remove any inquiries
into prior salary history. You should also amend any interview guides with such
questions that inquiries about salary expectations, making sure that no hiring personnel
lead into a conversation that could veer into illegal territory.

In addition, all
staff involved in the hiring process should be trained about the new law. You
will want to specifically cover with your hiring personnel how the new law
impacts the types of inquiries and questions that are permitted and not
permitted.

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