A bill that could drastically alter how businesses in Philadelphia hire sailed through City Council in December and faced very little opposition. But now that it’s sitting idle in City Hall awaiting the mayor’s signature, businesses — most notably, Comcast — want it to stop right there. Their stated concern: it’s yet another regulation making the city look decidedly anti-business.
The bill is part of the city’s Fair Practices Ordinance, and it’s widely been touted as a wage discrimination law. Essentially, the bill would make it illegal for any business in the city of Philadelphia to ask a potential employee during the interview process about his or her salary background.
So basically this:
…would be illegal.
Here’s what what that means for a corporation like Comcast or even a small business: Hiring managers considering an applicant for employment cannot require (or even ask) that person to disclose how much money he or she makes. Under most cases the employer also can’t use past salary information to base a current salary — a pretty common practice in the human relations community — unless the applicant knowingly and willingly discloses it.
If a prospective employee believes an employer violated the law, he or she can take their complaint to the Philadelphia Commission on Human Relations, and the employer could face fines of $2,000 in addition to other court fees.
The bill was introduced last fall, and advocates say it’s a way to fight wage discrimination against women and minorities. The idea is that if a woman or minority already makes less than their white, male counterparts, they will continue to be shortchanged as they apply for new jobs if their offer is based on their current salary.
Instead, the bill says wages “should be based upon the job responsibilities of the position sought and not based upon the prior wages earned by the applicant.”
The wage discrimination bill soared through City Council, passing unanimously. No one even testified against it in person. Now, the Greater Philadelphia Chamber of Commerce has reportedly teamed up with Comcast, the largest corporation in town, to challenge the bill head-on.
According to The Inquirer, Comcast has threatened to sue the city. And Mayor Jim Kenney — who has two weeks to sign the bill before it automatically lapses into law — is pumping the brakes.
The status of the bill
This ordinance was introduced last fall by at-large City Councilman William Greenlee, and moved through City Council swiftly, passing unanimously in December. Since then — when a spokesman for Kenney said the mayor planned to sign it — it’s sat on Kenney’s proverbial desk awaiting his signature. He has until Jan. 26 to sign it; if he doesn’t (or doesn’t act) and it passes into law, it’ll take effect 120 days later.
The Inquirer reported that Kenney told business leaders upset about the bill to this week meet with Greenlee to air their concerns with him. Greenlee then sent the issue back to Kenney, saying he heard their concerns — and he’s not budging on the bill that was already passed.
Kenney’s office is reportedly reviewing the legal issues associated with the bill after Comcast came out against it, saying that if it’s not vetoed they’ll sue the city on constitutional grounds. Lawyers retained by Comcast say the bill limits companies’ First Amendment right to free speech by limiting what questions they can and can’t ask applicants.
Now Kenney says he’s still reviewing whether or not he’ll sign the legislation.
Comcast senior vice president David L. Cohen, the former chief of staff to Ed Rendell when he was mayor of Philadelphia, appeared this morning on local CBS radio to discuss the bill, saying “this is not a Comcast issue.”
“This is every employer who I have come in contact with in the past month. Large employers, small employers, for-profit employers, non-profit employers, [are] shaking their heads at this legislation,” Cohen said on the show, adding: “The bottom line, and I’ve expressed this to the mayor and I’m expressing it to City Council..that Philadelphia is rapidly getting a reputation as one of the most anti-business cities in America.”
He also defended Kenney, saying other so-called “anti-business” regulations were put in place before he was elected mayor.
“This legislation, in a sense, is a bit of a straw-that-breaks-the-camel’s-back of a whole series of anti-business initiatives that City Council has adopted,” Cohen said, “and almost all of those have been adopted before Jim Kenney was mayor.”
Why the business community is concerned
Multiple corporations and businesses Billy Penn reached out to are hesitant to publicly come out against the ordinance. Some say they’re committed to eradicating wage discrimination, but have serious concerns about how the bill would change their HR and hiring practices.
David J. Woolf, a labor and employment attorney and partner at Drinker Biddle who represents management, said it’s not uncommon for government bodies to dictate what can and can’t be done in hiring practices. For example, federal law dictates employers can’t ask a woman if she intends on getting pregnant during the hiring process.
Woolf specifically noted Philadelphia’s “ban the box” ordinance, or the law that makes it illegal for Philadelphia employers to ask about criminal backgrounds during the job application process.
But there’s a difference. Many in the business community have debated the actual usefulness of a criminal background check. What isn’t up for debate among most business leaders, he said, is the value of asking a potential employee what he or she is currently being paid.
“You’re taking something that people have used for years, if not decades as a common area of inquiry, and putting it off-limits,” Woolf said, “and I think that’s the big change.”
Woolf said businesses sometimes ask for salary information to test the veracity of claims about a candidate’s current job. For instance, someone can claim they run a department or wield influence over a large number of people in their current position, and some hiring managers use salary information to gauge whether or not that claim is true.
He added that other employers ask for salary history up-front just to get an idea of whether or not they can afford the applicant. The metaphor he used is that it’s similar to shopping for a car. The sticker price isn’t always what you end up with, but at least you have a range of what you’re going to pay. Why shop around for a Lamborghini if you can only afford a Volvo?
Rob Wonderling, CEO of the Greater Philadelphia Chamber of Commerce, submitted written testimony in opposition to the bill when it was taken up by City Council. In it, he wrote that “When employers look at a candidate’s salary history, they have a better understanding of whether a candidate is worth pursuing based on previous compensation levels as well as the market value or salaries for comparable positions.”
“Another reason that we remain concerned about this legislation,” he wrote, “is that not all businesses and organizations are alike — they range in size, industry, geography and talent needs. They should be able to utilize a full set of tools in order to find the right employees for their organization.”
Woolf said he’s encouraging businesses to hold tight on the bill before making any changes to their hiring practices. If it’s enacted, he said, he’d advise clients to limit who they have interviewing candidates and re-train those doing the interviewing to ensure they don’t slip and ask about salary history out of habit.
What advocates of the bill say it does
The legislation was written for one main reason: To keep employers from discriminating — whether purposefully or inadvertently — against women and minorities by basing their salary on a previous one that might have already been lower than white, male counterparts.
The National Partnership for Women & Families, a nonprofit advocacy group, reports that “women in the Philadelphia area are paid 80 cents for every dollar paid to men in the area, amounting to a yearly gap of $11,287 between men and women who work full time.” The U.S. Census Bureau reported that in 2015, women were paid about 79 cents for every dollar a man was paid.
While federal law passed in the 1960s prohibits gender-based wage discrimination, the actual wage gap between men and women has only slightly decreased since then.
The Philadelphia legislation itself specifically calls out the wage gap. It reads: “Women of color are paid even less. African American women are paid only 68 cents to the dollar paid to a man, Latinas are paid only 56 cents to the dollar paid to men, and Asian women are paid 81 cents to the dollar paid to men.”
Basing a potential employee’s salary on a previous wage “only serves to perpetuate gender wage inequalities and leave families with less money to spend on food, housing, and other essential goods and services,” the legislation reads.
Does it work like this anywhere else?
Philadelphia would be the first city to enact legislation of this nature, though the ordinance is based on legislation passed by the Massachusetts state government in August. But that law won’t take effect until January 2018, so business and government leaders haven’t been able to study its economic impacts.
Bills have been introduced in both the U.S. House and state legislatures, including in Maryland, New Jersey, California and Pennsylvania, but the measure hasn’t been passed anywhere except Massachusetts. New York’s City Council is considering similar legislation, and Mayor Bill de Blasio signed an executive order last year banning city agencies from asking about salary history during the application process.
Advocates on both sides of the issue are closely watching Philadelphia, which will likely see some sort of resolution to the issue within the next two weeks. Woolf said if it passes, businesses in the city will likely need to make major changes.
“If it passes, this is one of those things that’s pretty hard to do in practice,” he said. “It’s so ingrained.”