Philadelphia this week became the first U.S. city banning employers from asking potential hires to provide their salary history — a move supporters say will help achieve equal pay for women.
But while many are praising the bill, some in the business community are resisting the new legislation and its potential far-reaching implications.
Democratic Mayor Jim Kenney signed the wage-history bill on Monday, mandating that employers cannot ask potential hires how much they made at their previous job.
Philadelphia’s Chamber of Commerce says it hurts businesses by placing burdensome statutes on employers and will deter other employers considering Philadelphia to do business.
In a statement, the chamber described the bill as a continuation of “legislation that hurts job growth and business expansion” and noted that there is no evidence that enforcing a ban on asking about wage history will close the gap between men and women.
Under the ordinance, employers will be penalized up to $2,000 per infraction. However, applicants are not barred from speaking about their previous salaries.
According to the statement, the city government rejected a proposal by the business community to discuss and enact a wage equity ordinance.
“While the chamber is deeply committed to highly diverse and inclusive workplaces and will not tolerate wage inequity, we believe passage of this measure says Philadelphia is not open for business,” says Rob Wonderling, the chamber’s president and chief executive. “Philadelphia has a reputation around the country and world for having a high cost of doing business. With this bill, we have reinforced our unfortunate anti-business reputation of having a city government that tells companies how to run their business.”
Meanwhile, Philadelphia-based Comcast also says the law goes too far dictating how employers talk to potential hires, and is threatening to take the city to court over the legislation.
John Quinn, a Philadelphia-based member with law firm Eckert Seamans, sees merit in a possible lawsuit.
“It certainly infringes on their ability to run their own company,” he says. “It certainly infringes on getting insight into a potential employee.”
Quinn argues that the question might not be the issue, but rather the result.
“What is it supposedly saying?” he asks. “You are prime to discriminate against someone, or your goal is to pay people less?”
Comcast could make the argument that it doesn’t.
However, legislation to create wage equity is growing more popular across the country.
New Jersey has introduced similar salary history bans, as have city councils in New York City, Washington, D.C., and Pittsburgh.
Earlier this month, New York Gov. Andrew Cuomo signed two executive orders that prohibit all state agencies and departments, along with public benefit corporations, boards and commissions, from evaluating candidates based on their prior salary or asking prospective employees their wage history.
Promoting equal pay
Most importantly, supporters argue, this kind of legislation will help women earn equal pay in the workplace.
“Women tend to go into a job and they don’t start out with the appropriate salary,” says Dot McLane, president of AAUW-PA, an organization that advances equity for women and girls. “She can never catch up, especially if she steps out of the workforce, even on maternity leave.”
By eliminating the question, “How much did you make at your last job?,” McLane says women will fall within the parameters of the new job’s salary range rather than just receive a pay increase proportionate to their previous wages.
“They have salary ranges, and that’s what they should offer the person,” she says. “The job pays what the job pays. You offer it to the person; they say yes or no.”
In Pennsylvania, women earn 79 cents to the man’s dollar, which equates to an annual wage gap of more than $10,000, according to the U.S. Census Bureau.
Meanwhile, women of color are paid even less. African-American women are paid 68 cents and Latinas are paid 56 cents for every dollar paid to white men, the largest demographic in the workforce.
Supporters like McLane say the bill stops the perpetual wage gap women can’t escape when changing jobs, but employers argue the bill infringes on free speech.
Philadelphia’s law will take effect on May 23.
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