Philly employers cannot ask applicants about salary history, rules federal appellate court

Back in 2017, the City of Philadelphia became the first city in the country to pass a law forbidding local employers from asking individuals about their salary history. The purpose of the law was to help close the wage gap between men and women.

Then the local Chamber of Commerce went to federal court to attempt to block the law. Their first attempt was unsuccessful. But then, they came back with even more business groups to take a second bite at the apple. In the second go-round, Judge Mitchell Goldberg concluded that an employer could ask about an applicant’s salary history. Anything else would violate the company’s free-speech rights. However, the employer could not rely upon the applicant’s responses to make a salary decision.

It’s what we call a pyrrhic victory.

Fast forward to yesterday, when the Third Circuit Court of Appeals weighed in and concluded (here) that, yes, Philadelphia may ban employers from asking applicants about their salary history. That’s because the City has a substantial interest in closing the wage gap, and the law directly advances the City’s interest in pay equity. Additionally, Judge Goldberg was correct that company free-speech rights were not impacted by forbidding them from using the applicant’s responses to make a salary decision.

So, if you conduct business in Philadelphia, you’ll need to put the kibosh on any inquiries about an individuals’ salary history. Instead, if you want to talk dollars and cents with an applicant, think prospectively. That is, consider instead asking about the applicant’s salary demands and then negotiate from there.