Workers’ rights advocates were happy the day that Mayor Kenney signed a new law that halts the practice of asking new employees to list their work histories. This means that Philadelphia is the first city in the country to enact this type of law in the private sector.
As may have been expected, not everyone was in favor of the changes. The law was set to be enforced, but the Chamber of Commerce for Greater Philadelphia took the matter to court because of the laws’ supposed unconstitutionality.
What Is in the Law?
The Society for Human Resource Management explained what is required by the law. According to the Society, legislators wrote the law as they did to close the gap between what men and women are paid. For example, the law states that employers must not consider job salary data acquired from an independent source without the job candidate’s permission.
Furthermore, employers may not directly ask potential employees how much money they were paid on previous jobs. They are also prohibited from requiring a candidate to inform them of his or her past salary history before an offer of employment will be made. Lastly, they are not allowed to punish an individual who does not provide them with his or her salary history.
Who Is Affected by this Law?
Some people have stated that employers whose headquarters exist outside of Philadelphia will be affected by this law. Every business owner in Philadelphia is subject to the law even if third parties are the ones who are performing the prohibited actions. Anyone who violates the ordinance will receive a fine of $2,000 per occurrence.
What Are the Setbacks?
Of course, voices rose up in opposition before the law was even passed. One company that suggested it would file a lawsuit against the city was Comcast Communications. This company stated that the law violated its First Amendment rights, and other companies have said that complying with the ordinance would be too burdensome.
The Chamber of Commerce also weighed in on this subject, and it filed a district court motion that sought a preliminary injunction. Since this occurred a little less than two months before the law was to go into effect, it was unclear whether or not the law would be enacted on time.
Because of the Chamber of Commerce’s filing, the Eastern District of Pennsylvania court made a determination to stay the law. Those in favor of the law thought that this ruling meant that employees’ rights would suffer in future disputes. In fact, this ruling was considered to be a catastrophic blow.
In June, Philadelphia filed a motion in court to dismiss the lawsuit because it did not state how business owners would be injured because of the law. Since the original complaint did not specify how the Chamber of Commerce’s members would be injured by the law, the district court agreed with the city.
Why this Ruling Made Sense
The Chamber of Commerce created a situation where the court could not respond to its filing because it did not identify any businesses that would be impacted negatively by the law. It doesn’t matter at this point whether the identifications would have led to an alteration of the law. The fact that the city was willing to listen to the concerns of the other side by agreeing to delay the ordinance may have helped the court decide on this matter.
It’s possible that there could be future challenges to this law. The court did allow the Chamber of Commerce to alter the complaint.
The Future for the Law
The Chamber of Commerce may never modify its complaint, but some business owners might decide to defy the ordinance. For example, the tools that real estate websites use to determine the prices of properties are extremely accurate these days. Because of this, employers can estimate how much a candidate must earn based on the area in which the person lives. Employers will not be able to ask ex-employers how much he or she paid a candidate, but Human Resources could compile monetary data garnered from public sources. Anyone who does these types of things may find new legislation on the books or even have penalties levied against them.
Every employer is not fighting this law tooth and nail. Some people are in favor of wage equity between males and females that the law wants to encourage, and they will support it. These employers will need to find new ways to comply with the law, and one way of doing this would be to modify their onboard training, interviewer scripts and job application forms.
Philadelphia is unique because it is the first to put a wage equity law on the books, but it will not be the last to do so. Employers are already starting to forgo asking about a candidate’s salary history, and states such as California, Massachusetts and Washington, D.C. are writing wage equity legislation now. Companies that have questions about the various state and federal employment laws need to consult with a compliance specialist to ensure that they are following all of the rules.
About Karl Heideck
Karl Heideck became a contract attorney for Hire Counsel in 2015. Before he joined Hire Counsel, he gained experience practicing law in the Greater Philadelphia area. During that time, he was a project attorney and spent the years filing complaints and responding to them as well. Currently, Karl Heideck offers compliance consulting and risk advisement services. He is also involved in employment proceedings, product liability and corporate law.
Karl Heideck graduated from Swarthmore College in 2003 with a Bachelor of Arts degree in English and Literature. In 2009, he received his Juris Doctor with honors from Temple University’s James E. Beasley School of Law.
Keep Reading: Career Spotlight: Litigation with Karl Heideck