2016 demonstrated a lot of activity surrounding wage history and pay equity on the federal, state and local levels. The activity continues as Philadelphia, PA became the first city to ban employers from inquiring into applicants’ wage histories. This equity ordinance was passed on December 8, 2016.
Philadelphia Amends Fair Practices Ordinance to Include Wage Equity
Influenced by a 2016 passage of a state-wide wage gap law in Massachusetts, Councilman Bill Greenlee sponsored the wage equity ordinance that amends the Philadelphia Fair Practices Ordinance. This amendment prohibits employers from asking about an applicant’s wage history at any stage in the hiring process. The U.S. Census Bureau reported in Philadelphia in 2015, women in Pennsylvania earn 79 cents for every dollar earned by a man, which amounts to a median annual wage gap of $10,507. Supporters believe that the ban will narrow the wage gap for women and minorities. An applicant can disclose his or her wage history to a prospective employer and the employer may utilize this information if it is “knowingly and willingly disclosed” by the applicant.
Massachusetts Passes New Pay Equity Law
On August 1, 2016, Massachusetts Governor Charlie Baker signed into law, “An Act to Establish Pay Equity.” This law prohibits employers from discriminating based on gender in the payment of wages, including all forms of compensation, for comparable work. The law goes on to define “comparable work” as “work that is substantially similar in that it requires substantially similar skill, effort and responsibility and is performed under similar working conditions.” Further, whether work is “comparable” cannot be determined on job title or job description alone.” Massachusetts employers have until July 1, 2018 to ensure their policies and practices are compliant.
Pay Equity for All: A History and Lesson for Businesses
There has been legislation regarding pay equity since 1963 via The Equal Pay Act. The Equal Pay Act has been scrutinized and expanded over the years, yet the persistent wage gap continues to be an issue in the American workforce. In 2009, President Obama signed the Lilly Ledbetter Fair Pay Restoration Act, which allows victims of pay discrimination to file a complaint with the government against their employer within 180 days from the date of their first unfair paycheck. In April 2014, President Obama signed two executive orders to help eliminate wage disparities among federal contract workers. Despite all the attempts to rectify the pay gap issue, it remains a popular topic and is now being addressed at the state level. Employers should keep apprised of the pay equity landscape. It is recommended to audit pay data frequently to identify pay gaps and address disparities as they arise.
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