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December 08, 2016

Philly employers will soon be barred from asking your salary history

Job applicants in Philadelphia will soon be free from any pressure to reveal their salary history to prospective employers thanks to a new ordinance that aims to ensure greater equity in the local job market.

On Thursday, City Council unanimously passed an amendment to Title IX of The Philadelphia Code that will prohibit inquiring about an applicant's wage history at any stage in the hiring process. The ordinance, sponsored by Councilman-at-Large Bill Greenlee, seeks to narrow the wage gap for women and minorities in particular.

"We're the first city to pass it and we think it's going to be a growing trend around the country," Greenlee said. "This bill's about fairness. We were aware of this issue of wage equity, that women and minorities are paid considerably less than men. We saw that the state of Massachusetts passed a bill. It's a positive step in trying to have everybody treat it fairly."

Recent data behind the issue of wage inequity supports the argument that some action needed to be taken. The U.S. Census Bureau found in 2015 that women in Pennsylvania earn 79 cents for every dollar earned by a man, amounting to an annual wage gap of $10,507 that would otherwise cover essential expenses such as food, housing and utilities.

Among minorities, African-American women are paid 68 cents, Latinas are paid 56 cents and Asian women are paid 81 cents for every dollar paid to white, non-Hispanic men.

Greenlee said removing wage history from the hiring process will help level the playing field.

"First of all, should past salary really determine what a present salary should be? Shouldn't it be based on the job, the skills, the responsibilities and what the employee brings to the table?" Greenlee asked. "Leaving it the way it is just perpetuates the cycle of lower salaries."

Mayor Jim Kenney has already signaled his support for the legislation.

"The mayor looks forward to signing this bill, as we believe this will help to narrow the wage gap by eliminating what is an implicit bias against lower-paid workers when employers ask for wage history," said Kenney spokesman Mike Dunn.

"There are various ways that you can determine what a job is worth without asking about a person's salary. You can compare the position with a similar job. You can look at that employee's skills. This doesn't remove negotiation. It just stops that basic question." — Bill Greenlee, Philadelphia City Councilman-at-Large

Under the new ordinance, it will be unlawful for employers to inquire about wage history in as a means to condition terms of employment or consideration for an interview. Conversely, job applicants will remain free to disclose that information if they choose do so. Wages are defined as "all earnings of an employee, regardless of whether determined on time, task, piece, commission or other method of calculation," including fringe benefits, wage supplements and other forms of compensation.

"There are various ways that you can determine what a job is worth without asking about a person's salary," Greenlee said. "You can compare the position with a similar job. You can look at that employee's skills. This doesn't remove negotiation. It just stops that basic question, which is often where an interview starts."

Employers who violate the pending ordinance will be subject to penalty by Philadelphia's Human Relations Commission within 300 calendar days of the alleged infraction. The commission will have the power to order a company to cease and desist the unlawful practice, provide injunctive or equitable relief, order payment of compensatory damages and reasonable attorney fees, and order payment of punitive damages up to $2,000 per violation.

Complainants have the right to file a private action in court if the commission does not come up with a remedy after one year.

The labor-friendly legislation is one of a series of steps Philadelphia has taken in the past two years to provide greater security for workers in the city. Early in 2015, former Mayor Michael Nutter signed a paid sick leave bill requiring businesses with more than 10 employees to offer one hour of sick time for every 40 hours worked, or about five days per year. In October, Mayor Kenney expanded the city's prevailing wage law to cover service employees at Philadelphia's universities, hospitals, stadiums, the Convention Center and other institutions that receive government funds – both corporations and nonprofits.

"The key element is fairness. Hopefully, gradually, you'll see that gap diminish. A lot of these things come in increments." — Bill Greenlee

Greenlee said Philadelphia's leadership on this issue is a positive sign, another first-in-nation after the passage of the sugar-sweetened beverage tax earlier this year.

"I think sometimes we're a little hesitant. We want to wait until a number of cities do it," Greenlee said. "I think we waited too long to pass earned paid-sick leave. But if we think it's the right thing to do, let's do it."

Some members of Philadelphia's business community testified against aspects of the amendment and its ability to encompass the diversity of local businesses. Their main objection, Greenlee said, was that government shouldn't be telling them what to do.

"I guess I've always rejected that basic argument," Greenlee said. "If it weren't for the government's involvement, there would be no minimum wage laws. "Most of the time, businesses will come in and say this is going to hurt us, we're going to lose business and people will lose jobs, and it doesn't happen. It didn't happen with the sales tax and cigarette tax for schools. I'm not saying you're not sensitive to the business community, but you have to weigh all the factors."

Advocates for the Chamber of Commerce for Greater Philadelphia argued that salary history gives employers a better understanding of whether a candidate is "worth pursuing" relative to market value and other benchmarks. They also worried that the legislation opens employers up to potential lawsuits.

"We applaud efforts to try and close the wage gap for women and minorities," the Chamber said Thursday in a statement. "However, we are disappointed that once again City Council has chosen to insert itself into the management of Human Resources Departments of small business and neighborhood-based social service organizations, in addition to larger enterprises. We do thank the bill’s sponsor for including modest improvements at the request of the business community."

The legislation, once signed by Kenney, will take effect after 120 days.