Philadelphia, PA: POWER Act Brings New Employee Protections and Employer Requirements
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APPLIES TO All Employers with Employees in Philadelphia |
EFFECTIVE May 27, 2025 |
QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion
Philadelphia’s POWER Act creates expanded employee protections and employer requirements for paid sick leave, wage theft, a domestic worker bill of rights, and retaliation. Key components are summarized below.
Paid Sick Leave
For purposes of calculating paid sick time for a tipped employee, the hourly pay rate is the average of (1) the hourly wage for “Bartenders,” (2) the hourly wage for “Waiters & Waitresses,” and (3) the hourly wage “Dining Room & Cafeteria Attendants & Bartender Helpers,” as published for Philadelphia County by the Pennsylvania Department of Labor and Industry. Tipped employees are defined as receiving more than $50 in tips per month from the same employment.
Recordkeeping requirements expand from two years to three years. Complaints must be made to the Philadelphia Department of Labor (PDOL) within three years, extended from one year, that they knew or should have known of a violation. Any violation of the sick leave laws may result in a $2,000 penalty for each violation, in addition to liquidated damages to the complainant. There is also a 15-day required notice period before bringing a claim, to give the employer the opportunity to resolve it.
Wage Theft
“Employee” includes state and federal definitions. The PDOL is authorized to receive, investigate, and resolve complaints. It is also empowered to adjudicate violations, including recovering fines and penalties. Any violation of the wage theft laws may result in a $2,000 penalty for each violation. Employees may also receive a minimum of $500 in liquidated damages.
If an employer fails to keep records of an employee’s hours worked and/or records of compensation provided to an employee, or if the records are imprecise or inadequate, the employee may meet the burden of proof for wage theft by providing sufficient evidence to support an estimate of the wages owed. Additionally, upon failure to produce required records, there is a presumption that the wages complained of were not paid, absent clear and convincing evidence to the contrary.
Domestic Worker Protections
The Act expands the 2020 Domestic Worker Bill of Rights to include doulas, baby nurses, lactation consultants, and anyone employed or engaged in work on a casual basis. Employment agreements must be in writing and entered into by the first day of work, and advance notice of termination must be provided to avoid severance pay. There are also notice requirements, work restrictions, and recordkeeping requirements that, if not followed, elicit a presumptive violation. Employers have 30 days to cure violations when provided written notice; failure to do so may result in penalties of $2,000 per violation, plus liquidated damages.
Retaliation
Employers are prohibited from taking adverse action against employees for exercising their rights under the Act, including taking any action that negatively affects a complainant’s compensation, terms, or conditions of current or future work. Adverse action can occur prior, during, or after termination from employment. A rebuttable presumption of unlawful retaliation exists if an employer or any person associated with the employer has knowledge that a worker has engaged in a protected activity and takes adverse action against a worker or their family member within ninety (90) days of the worker having engaged in a protected activity. If there is clear and convincing evidence that the employer would have taken the adverse action notwithstanding the protected activity, and provided the employer documents in writing the incident relating to the alleged adverse action, the presumption may be overcome.
Note that the PDOL will publish on the internet a list of “bad actors,” including those who have been issued three or more determinations or orders for violations or failure to comply with applicable remedies.
Action Items
- Review the Act here.
- Have paid sick leave policies updated.
- Update recordkeeping procedures for compliance.
- Have appropriate personnel trained on the requirements.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase