Salary No, No
Employers may not be able to rely on salary history in setting wages.
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Salary No, No

Social norms dictate it's impolite to inquire about someone's salary history, but it may be illegal, as well. If you're hiring, learn what you need to know.

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February 18, 2020

In 2017 Philadelphia passed the Wage Equity Law, and in doing so became the first city in the nation to forbid employers from asking about salary history of a potential employee. As further detailed later, many other states and localities have followed suit since that time.

 
The Philadelphia Ordinance was challenged by the Philadelphia Chamber of Commerce, which argued, among other things, that it violated employers’ constitutional right to free speech. The U.S. District Court sitting in the Eastern District of Pennsylvania issued an opinion that the ordinance did in fact violate the First Amendment and partially overturned the ordinance, according to The Chamber of Commerce for Greater Philadelphia v. The City of Philadelphia Commission on Human Relations, No. 2:17-cv-01548 (E.D. Pa. April 30, 2018).

On February 6, 2020, the 3rd Circuit Court of Appeals reversed the lower court’s ruling and held that employers cannot rely on salary history in setting wages. Circuit Court Judge Theodore McKee noted that this limitation “prevents the tentacles of any past wage discrimination from attaching to an employee’s subsequent salary,” according to Greater Philadelphia Chamber of Commerce v. The City of Philadelphia, et al., Nos. 18-2175 & 18-2176 (3d Cir, February 6, 2020).

Similar salary history bans have been passed in 17 states (Alabama, California, Colorado, Connecticut, Delaware, District of Columbia, Georgia, Hawaii, Illinois, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Utah, Vermont, Washington and Wisconsin) and 20 localities (including Philadelphia).  

The scope, effective date and geographic areas in which they apply vary jurisdiction to jurisdiction.  

Josh Ferguson, ASCA General Counsel and Partner and Co-chair of the Philadelphia and Cherry Hill offices of Freeman Mathis & Gary, LLP, and associate Courtney Mazzio co-authored the article. For more information or for further inquiries you may contact Joshua at jferguson@fmglaw.com.