Philadelphia Becomes First U.S. City to Prohibit Inquiries into Applicants’ Wage Histories

On January 23, 2017, Philadelphia Mayor Jim Kenney signed into law the “Wage History Ordinance,” which bans all employers doing business in Philadelphia from asking job applicants about their wage histories, subject to a few exceptions. The Ordinance, unanimously passed by the Philadelphia City Council on December 8, 2016, amends Chapter 9-1100 of the Philadelphia Code, the “Fair Practices Ordinance.” The new law, the first for a U.S. city, will take effect on Tuesday, May 23, 2017.

The Wage History Ordinance specifically prohibits employers from the following:

  • To inquire about, require disclosure of, or condition employment or consideration for an interview on the disclosure of a potential employee’s wage history, unless done pursuant to a “federal, state or local law that specifically authorizes the disclosure or verification of wage history for employment purposes;”
  • Determine a potential employee’s wages based upon his/her wage history provided by his/her current or former employer, unless the potential employee “knowingly and willingly” disclosed such information to the prospective employer; and/or
  • Take any adverse action against a potential employee who does not comply with a wage history inquiry (anti-retaliation provision).

For purposes of this Section 9-1131, “to inquire” shall mean to “ask a job applicant in writing or otherwise,” and “wages” shall mean “all earnings of an employee, regardless of whether determined on time, task, piece, commission or other method of calculation and including fringe benefits, wage supplements, or other compensation whether payable by the employer from employer funds or from amounts withheld from the employee’s pay by the employer.”

Notably, the exception allowing wage history inquiries where a law “specifically authorizes” such applies not only when the inquiry is required by law, but when it is merely permitted by law.

The new law also requires a prospective employee who alleges a violation of the Ordinance to file a complaint with the Philadelphia Commission on Human Relations within 300 days of the alleged discriminatory act before he/she may file a civil action in court. Violations of the Ordinance can result in an award of injunctive or other equitable relief, compensatory damages, punitive damages (not to exceed $2,000 per violation), reasonable attorneys’ fees and hearing costs.

Advocates of the legislation, like Philadelphia Councilman Bill Greenlee, have suggested that the Ordinance is aimed at reducing the gender wage gap.  According to the “Findings” section of the Ordinance, women in Pennsylvania are paid 79 cents for every dollar that a man earns.  Amongst minorities, it claims that African-American women are paid 68 cents, Latinas are paid 56 cents, and Asian women are paid 81 cents for every dollar paid to men.  The belief is that, since women have historically been paid less than men, an employer’s knowledge of applicants’ wage histories can perpetuate a cycle of lower salaries.  Advocates profess that the Ordinance forces prospective employers to, instead, set salaries based on an applicant’s experience and the value of the position to the company.

Opponents of the Ordinance, like Rob Wonderling, CEO of the Chamber of Commerce for Greater Philadelphia, denounce it as an unnecessary “hassle” driving businesses away from Philadelphia.  Corporations like Comcast have also threatened costly lawsuits contesting the legality of the Ordinance.

It is recommended that employers review their hiring practices and applications for employment in advance of the Wage History Ordinance’s effective date of May 23, 2017.  Moreover, anyone involved in the hiring and interview process must be trained to ensure compliance with the new law prohibiting inquiries into an applicant’s salary history.

For more information on the Wage History Ordinance, how it may affect your business, or ways to ensure that your company’s hiring documents and policies comply with the Ordinance, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

New Jersey Assembly Picks Up Fight For $15 Minimum Wage

The fight for a $15 minimum wage is gaining steam in the New Jersey Legislature. On May 26, 2016, the New Jersey Assembly passed Bill A15, which would raise the minimum wage to $15 an hour by 2021. Currently, the New Jersey State minimum wage is $8.38 per hour.

The $15 minimum wage would not get there all at once. Under the recently passed bill, the minimum wage first would increase to $10.10 per hour on January 1, 2017.  Then, between 2018 and 2021, the minimum wage would increase by the greater of $1.25 an hour or $1.00 an hour plus the CPI each year. An identical version of the Assembly’s bill has already passed the New Jersey Senate’s Labor Committee (Bill S15). If the full Senate passes the bill it will head to the Governor’s desk where it most likely will be vetoed.

But the Governor’s veto may not be the end of the bill. The Legislature is proposing that in the event of a Governor veto, the bill be put to a constitutional referendum for the voters to decide during the New Jersey General Election on November 7, 2017. This would not be the first time the Legislature managed to get around a veto to increase the minimum wage. The minimum wage was previously raised by constitutional referendum in 2013 when voters amended the State’s Constitution to increase the minimum wage to $8.25 per hour despite a Governor Christie veto.

While the proposed $15 minimum wage may seem a long way away, employers should start thinking now about how this would affect their business. Many employers are still struggling from the more than 15% increase in the minimum wage over the last two years. An increase to just $10.10 in 2018 (which is when the increase would take effect if the bill is vetoed but then approved through referendum) would reflect another 20% increase, or an almost 40% increase since 2013.  Such increased labor costs may be more than some employers can or are willing to absorb. For instance, Wendy’s recently stated it would replace some workers with automated machines in response to significant increases in minimum wage.

For more information regarding the potential impacts of Bill A15, or regarding any other wage and hour issues, please contact John R. Vreeland, Esq. Director of the Firm’s Wage & Hour Compliance Practice Group, at 973-535-7118 or jvreeland@nullgenovaburns.com, or Aaron C. Carter, Esq. at 973-646-3275 or acarter@nullgenovaburns.com.

Governor Christie Conditionally Vetoes Social Networking Bill; Legislature Responds

Written By Brett M. Pugach, Esq., and Jordan S. Hollander

The New Jersey Legislature recently passed a social media law, also known as the “Facebook Bill”.  On May 7, 2013, the Facebook Bill was conditionally vetoed by Governor Christie.  The Facebook Bill would have prohibited employers from requiring or requesting current or prospective employees to disclose their user name or password or otherwise provide the employer with access to a personal account on a social networking site.  Such accounts did not include those used for business purposes of the employer.

In addition, employers would have been prohibited from requiring or requesting that a current or prospective employee disclose whether he/she has a personal account on a social networking site.  Such a prohibition would have been the first of its kind.  This prohibition has been particularly controversial for certain employers due to its potential implications with respect to social media outlets focused on business connections such as LinkedIn.  However, the Facebook Bill does not appear to prevent employers from conducting research online on their own.  The Facebook Bill also contained controversial provisions with respect to the potential liability of employers for violations and civil penalties of up to $1,000 for the first offense and $2,500 for additional violations.

While Governor Christie thought the bill was “well-intentioned,” he issued a conditional veto due to apprehensions over balancing privacy concerns and an employer’s need “to hire appropriate personnel, manage its operations, and safeguard its business assets and proprietary information.”  For example, under the vetoed bill, an employer interviewing a candidate for a marketing job would have been prohibited from asking that candidate about their use of social networking to gauge their technological skills and savvy.

In the accompanying conditional veto message, the Governor left the civil penalties intact but suggested that provisions allowing employees to sue for violations of the law and that bar employers from asking about the existence of social media accounts be struck from the law.  In addition, the Governor proposed adding additional exceptions allowing employers to investigate work-related employee misconduct or the unauthorized transfer of confidential company information to a private account and allowing employers to view, access, or utilize information about a current or prospective employee that can be obtained in the public domain.

After the conditional veto, the bill was sent back to the Legislature.  The State Assembly incorporated the Governor’s changes, and on May 20, 2013, approved the bill, known as A2878, by a vote of 74-0 to send it back to the Governor’s desk.  However, before Governor Christie may act on the bill, it must also be approved by the State Senate.

Employers should note that the Facebook Bill, as amended and if approved by the State Senate and signed by the Governor, would not take effect until the first day of the fourth month after it is enacted.  Employers are encouraged to consult with an attorney to review social media related policies and/or draft a social media hiring policy.

If you need advice with respect to this legislation or assistance regarding an existing social media policy or developing a new social media policy, please contact Joseph M. Hannon, Esq., jhannon@nullgenovaburns.com or Brett M. Pugach, Esq., bpugach@nullgenovaburns.com, in the Labor Law Practice Group.

New OFCCP Directive Targets Applicant Screening for Criminal History Record

On January 29, 2013 the Office of Federal Contract Compliance Programs (OFCCP) provided guidance to federal contractors on hiring policies and processes that screen out job applicants who have criminal records. OFCCP’s Directive 306 cautions covered employers that hiring policies that summarily exclude applicants from employment based on a criminal record, without considering such factors as the age and the nature of the offense, may have a disparate, and therefore illegal, impact on racial and ethnic minority job applicants. OFCCP summarizes its current position as follows: “Policies that exclude people from employment based on the mere existence of a criminal history record and that do not take into account the age and nature of an offense, for example, are likely to unjustifiably restrict the employment opportunities of individuals with conviction histories. Due to racial and ethnic disparities in the criminal justice system, such policies are likely to violate federal antidiscrimination law.”

Directive 306 highlights several best practices to avoid liability for discriminating on the basis of an applicant’s criminal record. First, OFCCP suggests that employers not inquire about the applicant’s criminal record at all. But if the employer does inquire, OFCCP suggests that the employer ensures that its applicant screening policies and procedures include an individualized assessment of the applicant’s past criminal conduct and are narrowly drawn to screen out only applicants whose criminal convictions demonstrate unfitness for performing the job or jobs in questions. In other words, before a criminal conviction is considered as disqualifying, the OFCCP Directive cautions that the offense should be related to the job duties for which the applicant is being considered and the employer can articulate a business necessity for disqualifying the applicant.

Federal contractors and subcontractors should review their hiring processes to determine the extent to which they exclude minority applicants from employment based on criminal history, even if unintentionally, and have legal counsel review these policies, and the statistical results of applying them, to ensure compliance with OFCCP requirements.

For more information on Directive 306 and our firm’s OFCCP audit and compliance services, contact Patrick W. McGovern, Esq., pmcgovern@nullgenovaburns.com or Douglas J. Klein, Esq., dklein@nullgenovaburns.com, in our Labor Law Practice Group.