©2024 Seyfarth Shaw LLP Developments in Equal Pay Litigation | 3 The lawsuit involved the 2017 Philadelphia Wage Equity Ordinance, which, among other things, prohibits employers from inquiring into or relying upon job applicants’ prior wage history in establishing starting pay. The ordinance consisted of two provisions: the “Inquiry Provision” and the “Reliance Provision.” The Inquiry Provision prohibits an employer from asking about a prospective employee’s wage history, and the Reliance Provision prohibits an employer from relying on wage history at any point in the process of setting or negotiating a prospective employee’s wage. Both provisions were upheld by the Third Circuit. Among other things, the court agreed that solving the gender pay gap is a substantial government interest and that the ordinance directly advances that interest.16 The court found that the City Council relied upon sufficient testimony and studies to support the enactment of the Ordinance, including that: (1) the wage gap is substantial and real; (2) numerous experiments have been conducted, which controlled for such variables as education, work experience, and academic achievement, still finding a wage gap; (3) researchers have long attributed the gap to discrimination; (4) existing civil rights laws have been inadequate to close the wage gap; and (5) witnesses who reviewed the data concluded that relying on wage history can perpetuate gender and race discrimination.17 This decision is significant because it upheld the ordinance based on many of the same arguments and analysis that support the rationale for salary history bans generally, including the alleged scientific bases of the gender pay gap and the purported failure of existing anti-discrimination legislation to address that issue. In addition to salary history bans, some states and localities have recently begun enacting legislation that requires employers to be more transparent about compensation. Those laws come in a variety of forms, but they often require employers to provide salary range information to applicants or employees. The assumption underlying such laws appears to be that employees will be able to use this information to advocate for higher pay, which over time could help to narrow the pay gap. Colorado was one of the first states to pass such a law; it requires employers to notify employees of “promotional opportunities.” Promotional opportunities are job vacancies that are superior to the job held by at least one employee at the same company. The law mandates that such postings must include a list of information about the position, including detailed compensation and benefits information.18 In particular, the law requires employers to “make reasonable efforts to announce, post, or otherwise make known all opportunities for promotion to all current employees on the same calendar day and prior to making a promotion decision.”19 The law also requires employers to “disclose in each posting for each job opening the hourly or salary compensation, or a range of the hourly or salary compensation, and a general description of all of the benefits and other compensation to be offered to the hired applicant.”20 The Colorado law also requires employers to “keep records of job descriptions and wage rate history for each employee for the duration of the employment plus two years after the end of employment in order to determine if there is a pattern of wage discrepancy.”21 Violations of the job posting requirements are subject to state agency enforcement or a private right of action.22 In the latter case, the law provides courts the option to provide private litigants with a rebuttable presumption that missing records would have contained information favorable to the employee's claim and an instruction to the jury that failure to keep records can be considered evidence that the violation was not made in good faith.23 16 Id. at 143. 17 Id. 18 C.R.S.A. § 8-5-201. 19 Id. § 8-5-201(1). 20 Id. § 8-5-201(2). 21 Id., § 8-5-202. 22 Id., § 8-5-203. 23 Id., § 8-5-203(5). The law states that “the court may order appropriate relief, including a rebuttable presumption that records not kept by the employer in violation of section 8-5-202 contained information favorable to the employee’s claim and an instruction to the jury that failure to keep records can be considered evidence that the violation was not made in good faith.” Id.
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