Job applicants typically expect employers to inquire about salary history even though most prefer not to share it, but the practice may end soon. The discontinuation of the policy that lets employers establish salary levels that rest on history instead of merit is gaining support nationally.
Ending a Discriminatory Hiring Practice
Congresswoman Eleanor Holmes Norton of the District of Columbia introduced the matter to Congress in early May of 2017. Workers’ rights advocates claim that wage disparity often begins when an employee accepts a low-paying job and subsequently suffers from revealing it to future employers.
Stopping Progress Abruptly
Earlier in the year, Philadelphia’s advocates for workers’ rights enjoyed a brief period of joy when it looked as though the practice had become history when Mayor Jim Kenney’s signature on an ordinance prohibited it. Philly was on its way to becoming the first U.S. city to prevent private-sector employers from requesting salary histories from job applicants. However, the correction of a long-standing, improper practice stalled when the city’s Chamber of Commerce for Greater Philadelphia acted against it. The interest group challenged the ordinance’s legitimacy and constitutionality.
The Chamber had companions in its objections to the new rule when Comcast Communications made a threat to sue the city, and other businesses complained about it as well. Comcast’s complaints purported an assault on its First Amendment rights. The Chamber filed a district court motion for a preliminary injunction in April, only a couple of months before the scheduled implementation of the law. The action created doubt about the likelihood of the rule’s ability to survive the challenges.
Explaining the Law
Attorney Karl Heideck put the critical points of the law into perspective for readers. Citing the work of Philadelphia’s Society for Human Resource Management, he acknowledged that the ordinance diminishes the gap in wages that exists between the sexes in the city. Provisions and stipulations in the law made it illegal for employers to engage in outmoded practices such as these:
- Making a direct request to an applicant for salary history
- Requiring disclosure of salary history as a condition of employment
- Acquiring salary data from an independent source without an applicant’s permission or prior knowledge
- Allowing retaliation against a candidate for refusing to provide salary information.
Understanding the Penalties for Non-Compliance
A fine of $2,000 for each violation of the ordinance’s rules can increase the cost of an employer’s interviews of job applicants. Karl Heideck believes that the law’s requirements apply to businesses whose headquarters lie outside the city as well as those within city limits. The new law addresses explicitly anyone who conducts business in Philadelphia, and it applies to activities by a third party as well.
Assessing the Impact
The response by the United States District Court for Pennsylvania’s Eastern District of Pennsylvania to the Chamber’s filing was to stay the law, a decision that the ordinance’s proponents saw as a deterrent to its chances of becoming law. The city revived their hopes, however, by filing a motion to dismiss the lawsuit, and the court agreed that the complaint did not prove that the Chamber’s case had merit. As a result, the group requested and received the court’s permission to amend its complaint. A new filing may make it more difficult for the Chamber to pursue its case. A complication may occur when businesses that ask employees for salary information must identify themselves. By admitting to using the very practice that the new ordinance intends to prohibit, companies face a potentially awkward set of circumstances.
Looking to the Future
The burden of changing their policy of requiring salary information from applicants may cause some companies to resist implementing the new law, even if the Chamber does not further pursue its original complaint. While some employers may try to get around the prohibition by using other ways to obtain salary information, Karl Heideck thinks that doing so may place them in danger of corrective measures such as penalties and new legislation. The availability of detailed personal information on the internet may tempt companies to let technology provide the information that they want, but it may come at a significant risk.
Karl Heideck’s estimate of the likelihood of compliance with the ordinance by companies indicates general acceptance and a willingness to implement the principle that represents wage equality. For firms to accept the new regulations in compliance requirements and hiring policies, he thinks that they may need legal guidance. As companies face the new requirements that require compliance or create a risk for penalties, the preparation for it may include a need to re-examine their hiring practices to make sure that they meet legal guidelines. A re-assessment may involve an evaluation of in-house training programs as well as the wording on forms that applicants complete. The detection of areas of potential non-compliance can save businesses from costly penalties. The prepared scripts that interviewers use may pose pitfalls unless companies notice that they do not comply with the new regulations.
Making Progress Nationally
Philadelphia was on track to lead the nation in outlawing employers’ inquiries into salary history with its Philadelphia Wage Equity Ordinance until the Chamber’s actions derailed the implementation date in May. Meanwhile, Delaware’s law prohibiting the practice takes effect in December, and New York City’s rule becomes law on October 31, 2017, according to JDSupra.
Getting to Know Attorney Karl Heideck
Readers of Philly Purge can regularly receive insights about legal topics that require an in-depth knowledge of the law from new contributor Karl Heideck. A successful litigation attorney in the Philadelphia area, Karl Heideck’s training in corporate and employment law, mediation and arbitration, trials and appeals, product liability and intellectual property makes him a knowledgeable resource on legal matters that need an explanation.
A 2003 graduate of Swarthmore College and an honors degree in law six years later from Temple University’s law school qualify the young attorney to share his knowledge and interpretive skills with readers. As a trial lawyer, Karl Heideck represented a range of clients by conducting depositions and pretrial hearings in addition to working with administrative agencies in mediation and arbitration proceedings. One of his specialties, risk management, extends into challenging considerations that relate to conflicts of interest, employee retention and expectations of customers. His expertise in the field offers clarity that leads readers to a full understanding of complex legal matters.
Keep Reading: Pennsylvania Law: Karl Heideck, Experienced Attorney