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Update on the Philadelphia Wage Equity Ordinance

May 23, 2018

By James B. Shrimp

The Ordinance

On January 23, 2017, the Philadelphia Wage Equity Ordinance (“Ordinance”) was signed by the Mayor.  The Ordinance made it unlawful for any business that employs individuals in the City of Philadelphia to (1) inquire about a job applicant’s wage history (“Inquiry Provision”); or (2) to rely upon wage history information in determining a salary for an employee at any stage in the employment process (“Reliance Provision”).

The Ordinance was set to take effect on May 23, 2017, but the City agreed not to enforce the Ordinance until a lawsuit challenging the constitutionality of the Ordinance was decided.

The Lawsuit/Decision

On April 30, 2018, Judge Goldberg of the United States District Court for the Eastern District of Pennsylvania issued a split decision on the constitutionality of the Ordinance.  The Court enjoined (prevented) the enforcement of the Inquiry Provision on First Amendment grounds, but did not enjoin (allowed) the enforcement of the Reliance Provision.  Because of the constitutional issues that had to be decided, the decision is long and contains a significant amount of legal language.

What Does the Decision Mean

In the short-term, the decision may not have much effect.  Both the City and the Chamber of Commerce will likely appeal Judge Goldberg’s decision to the Third Circuit Court of Appeals. The appeals will take at least another nine months to decide.  In the meantime, the City will probably agree not to enforce the entire Ordinance.

In the long-term, Judge Goldberg’s decision may very well indicate what an employer’s responsibilities will be when interviewing candidates and making job offers in the City of Philadelphia.

Initially, it is important to note that in the decision, Judge Goldberg highlighted that the City defined “employer” via regulation as “any person who does business in the City of Philadelphia through employees” and “who engages in the process of interviewing a Prospective Employee with the intention of considering such Prospective Employee for a position located within the City.” Thus, the Ordinance will only impact businesses that are searching for job candidates that will work within the City of Philadelphia.

Should Judge Goldberg’s decision be upheld, an employer will be permitted to ask about a job applicant’s wage history, because the Inquiry Provision will be invalidated.  Practically speaking, however, the employer will not want to ask a job applicant about salary history, because the Reliance Provision will still be in effect.  Employers will take the view that it makes no sense to ask about information that the employers cannot use.  Practically speaking, an inquiry about wage history will end up in the ash heap of unaskable questions at job interviews.

With that said, if a job applicant “knowingly and willfully” discloses his/her wage history, the employer is permitted to use that information, but only if the disclosure was not prompted by the employer’s questioning.

Businesses that employ individuals in the City need to keep a close eye on this litigation.  In the meantime, no action is necessary, although it would be prudent to begin auditing certain aspects of the hiring process, including review job application formats and interview outlines, to perhaps eliminate any questions regarding wage history.

If you have any questions about the Philadelphia Wage Equity Ordinance, please contact James B. Shrimp at 610-275-0700 or jshrimp@highswartz.com. Our employment law attorneys provide businesses and nonprofit organizations throughout the Pennsylvania region, including Bucks County, Montgomery County, Delaware County, Philadelphia and Chester County with sound advice and excellent representation.

The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

 

About the Author: Jim Shrimp

Jim concentrates his practice in the representation of employers in discrimination cases brought in federal court and state court, and at the administrative level. His practice also includes defending businesses in wage and hour disputes and restrictive covenant disputes; representing businesses in commercial contract disputes; representing businesses in trademark applications and trademark infringement matters; and franchise litigation.

More posts by Jim

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