In January, Philadelphia Mayor, Jim Kenney, signed the Philadelphia Wage Equity Ordinance, which was scheduled to go into effect in May of this year. However, shortly after its signing, the Chamber of Commerce for Greater Philadelphia questioned the law’s validity and filed a motion for a stay of the law’s effective date.
Since the motion, several parties involved have filed briefs; including a recent brief from the City noting that regulations interpreting the Ordinance (Regulation No. 7) had been adopted. According to the experts at Littler, Regulation No. 7 addresses the following:
• Definition of a Covered Employer and Applicant: The Regulation narrows the Ordinance’s coverage to those positions physically located within Philadelphia. Thus, presumably, employers based in Philadelphia with a multi-state presence do not have to comply with the Ordinance with respect to jobs located outside of Philadelphia, and a Philadelphia resident applying for a job outside of Philadelphia is not protected. Left undefined is exactly how to determine whether a job is located in Philadelphia or not—for instance, in the case of mobile workers.
• Current Employees Applying for New Positions: The Regulation also notes that if an individual seeks a new position with the same employer, in setting the pay for that new position, the employer cannot rely on salary history that the employer may have obtained from the applicant in connection with the (old) initial application for employment.
• Voluntary Salary Disclosures: The Regulation attempts to clarify when an applicant has “knowingly and willingly disclosed” prior salary information without unlawful coercion such that the employer can rely upon that information. It provides the following example: “a Prospective Employee ‘knowingly and willingly’ discloses the employee’s salary history in the context of an employment interview if the Prospective Employee voluntarily, and not in response to a question from the interviewer, makes the disclosure while knowing or having been informed that such disclosure may be used in determining any offered salary.” The Regulation does not, unfortunately, provide specific instructions or safe harbor language as to how an employer may adequately “inform” an applicant that disclosure “may be used in determining any offered salary” without being accused of coercing the disclosure.
• Clarification on Permissible Inquiries: The Regulation states that “An Employer shall not include a question on paper or electronic employment applications asking Prospective Employees to provide their salary history at any previous position.” It does not specifically address whether a “disclaimer” directing applicants for Philadelphia not to answer is sufficient to meet this requirement. (In contrast, the City’s Fair Criminal Record Screening Standards Ordinance specifically states that disclaimers are insufficient to comply with the prohibition on employers seeking applicants’ criminal record histories). However, the Regulation does clarify that other inquiries relevant to salary for the position sought are permitted, such as “the applicant’s salary requirements or expectations, skill level and experience relative to the position for which the applicant is being considered.”
Should the Ordinance be upheld, Philadelphia will join the ranks of more than five jurisdictions/states across the country with similar legislation. For more information about how this update may affect your organization’s screening/hiring processes, or employment screening solutions, contact AccuSource today or reach us by phone at 888-649-6272.
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