In a ruling that could impact employers around the country, a federal appeals court ruled that Philadelphia could prohibit employers from asking about and relying on job applicants’ salary history.
Philadelphia was one of the first places to pass such a salary history ban, aimed at closing the wage gap affecting women and minorities. Local businesses challenged the law on First Amendment grounds, but the Court rejected those challenges, clearing the way for the City’s salary history ban to go into effect.
Several other states and local jurisdictions have passed similar laws. Federal legislation on the topic has stalled. The decision affected only Philadelphia’s law, and it was limited to First Amendment issues. However, it could clear the way for other state and local governments to impose similar bans, and it could signal that courts will defer to the legislative process and allow these laws to go into effect.
For employers, especially those with facilities in multiple states, the message is clear: you can’t touch salary history questions in the hiring process.