Bans on Salary-History Requests Gain Momentum, Earning Rebuke from Business

GettyImages-618067068-compressorAsking a prospective employee for their salary history is about to be banned in the city of Philadelphia, sparking threats of legal action from businesses struggling to identify top talent.

The state of Massachusetts last year became the first jurisdiction in America to bar employers from demanding previous pay details as part of an attempt to close the earnings gap between men and women.

Now, Philadelphia’s mayor, Jim Kenney, is expected to sign a similar bill into law on Monday, according to local media reports. Prospective employees will still be able to voluntarily share their pay details, but if employers demand them they face a $2,000 fine.

“We’re hearing from companies that are thinking about locating—or at least being solicited to locate in the city—asking why would we ever come here with what’s going on in the city?

Women are indeed paid less than men when performing similar roles and supporters of the ban suggest this unfair discrepancy only continues when women are forced to disclose previous pay. Gender issues aside, others may argue that alternative information, such as a person’s qualifications, job history and interview performance, can be a more true determinant of job suitability.

On the other hand, past pay can give hiring managers a fast and easy indication of a candidate’s capabilities, based on what their previous employers thought they were worth. That may strengthen their ability to avoid over-paying if it should turn out a hire isn’t so well-suited to the role.

Cable giant Comcast is one company that has vocally opposed Philadelphia’s move. “It’s a little bit of the straw that breaks the camel’s back,” senior executive vice president David Cohen said. “We’re hearing from companies that are thinking about locating—or at least being solicited to locate in the city—asking why would we ever come here with what’s going on in the city?”

The Greater Philadelphia Chamber of Commerce is also opposed to the measure, which some business leaders claim would restrict their First Amendment rights to ask candidates whatever they wish.

The wider national business community, however, appears more split on the issue, with the Greater Boston Chamber of Commerce backing the equal-pay law in Massachusetts.

Pennsylvania and New Jersey have similar bills pending at the state level. At the federal level, legislation is being pushed by Democrat Congresswoman Eleanor Holmes Norton, though the fate of any proposed legislation is under a cloud as the Trump administration takes office.

Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.

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