Business groups challenge Philadelphia ordinance barring employers from asking about salary history

NFIB, the Pennsylvania Chamber of Business and Industry, and the U.S. Chamber of Commerce recently filed an amicus brief challenging a Philadelphia ordinance prohibiting employers from asking job candidates about their salary history.

The groups filed the amicus brief in a federal appeal, Chamber of Commerce of Greater Philadelphia vs. City of Philadelphia, with the Third Circuit Court of Appeals

“The ordinance was framed as a way the city could go further than current state and federal equal pay laws, but it put a stranglehold on small business owners trying to determine what constitutes a competitive offer in a very tight job market,” Karen Harned, executive director of the NFIB Small Business Legal Center, said. “There are less harmful ways to address pay equality without hurting small city businesses, such as encouraging employers to perform audits to determine if employees are fairly compensated for equal work.”

Before the appeal, the Federal District Court agreed with the Philadelphia Chamber that the city’s ordinance violates the constitutional right to free speech, but the court also upheld a separate provision in the ordinance that bars employers from relying on information about an applicant’s salary history.

The amicus brief filed asks the court to hold that the city’s ordinance is unconstitutional and to reverse the lower court’s decision on using salary information. The brief argues that in practical effect that is also a violation of free speech.

“The ordinance creates complexity, additional cost, and further burdens small business owners,” Harned said. “It also opens the door for a flurry of lawsuits; even if an employer did nothing wrong, the defense costs alone could wipe out a small business.”