The Third Circuit Rules That Philadelphia’s Salary History Ban Is Constitutional

On February 6, 2020, the Third Circuit Court of Appeals ruled that a Philadelphia law that prohibits employers from asking job applicants about their salary history is constitutional, lifting the injunction the United States District Court for the Eastern District of Pennsylvania (“District Court”) imposed on certain provisions of the law. The legislation at issue, the Wage Equity Ordinance (“Ordinance” or “law”) aims to address the historic wage gaps that affect women and minorities by encouraging employers to base salary offers on prospective job responsibilities rather than an applicant’s prior wages. The Ordinance was signed into law by Philadelphia Mayor Jim Kenney in January 2017, and was set to take effect in May 2017. The law contains two key provisions: (1) the “inquiry provision,” which makes it unlawful for Philadelphia employers and employment agencies (collectively “employers”) to inquire into an applicant’s wage and benefit history; and (2) the “reliance provision,” which makes it unlawful for employers to rely on an applicant’s wage history to determine future wages. The law also prevents employers from retaliating against any candidate who does not respond to a wage inquiry. The law does not prohibit a prospective employee from voluntarily disclosing compensation history; nor, are...