Philadelphia Wage Equity Ordinance On Hold … For Now
Earlier this year, Philadelphia became the first city to pass a law prohibiting employers from inquiring about a job applicant’s wage history and restricting their ability to consider wage history in setting new employee compensation. The pay equity ordinance was enacted to halt the perpetuation of gender discrimination in compensation practices.
As has been widely reported, the Philadelphia Chamber of Commerce filed a lawsuit on April 6, 2017 to challenge the ordinance, which was scheduled to go into effect on May 23, 2017. The Chamber also filed a motion for a preliminary injunction, asking the Court to enjoin the enforcement of the ordinance while its lawsuit is pending, on the grounds that the ordinance violates businesses’ free speech rights under the First Amendment and is unconstitutionally vague. The City of Philadelphia’s apparent first response has been to question whether the Chamber of Commerce even has standing to bring a lawsuit challenging the ordinance.
On April 19, Judge Mitchell Goldberg issued an order temporarily staying the enforcement of the ordinance until he can decide the Chamber’s preliminary injunction motion. Briefing on the standing issue will extend until at least May 12, with the Court’s decision on standing and possibly additional briefing related to the ordinance itself to follow. Thus, it is unlikely that the ordinance will go into effect on May 23 as originally planned.
Although Philadelphia employers may be tempted to delay implementing changes to their hiring practices, we recommend that they remain alert and ready to comply. Legislation restricting employers’ ability to rely on a job candidate’s wage history in setting compensation is the latest trend in equal pay laws. We predict that this trend will continue to gain momentum in other cities and states across the country. Most recently, the New York City Council passed similar legislation amending the New York City Human Rights Law to prohibit employers from inquiring about an applicant’s wage history, which Mayor de Blasio is expected to sign shortly. Prudent employers should review their hiring practices (e.g., update job applications and train managers about appropriate interview questions) and be prepared to comply with the law if the Chamber’s challenge is unsuccessful.