Philadelphia Updates: No More Credit Checks; New Wage Theft Prevention Law

Anti-Wage Theft Ordinance

Philadelphia originally passed the anti-wage theft ordinance on December 1, 2015, preventing employers from intentionally underpaying, or failing to pay, any portion of an employee’s earned wages.

Effective July 1, 2016, the ordinance affects the following:

• Broader Definition of “Wage Theft”: The ordinance broadens the definition of “wage theft” to any violation of the Pennsylvania Wage Payment and Collection Law (“WPCL”), the Pennsylvania Minimum Wage Act (“PMWA”), and any other federal or state law regulating the payment of wages when the work is performed in Philadelphia, or the employment contract underlying the violation is made in Philadelphia.

• Expansion of Eligibility: In addition to employees, “authorized organizations” (e.g., labor unions, a group of employees, or anyone acting on behalf of an employee) can file a complaint.

• Wage Theft Coordinator: Claims of wage theft between $100 and $10,000 can now be filed with the newly established Wage Theft Coordinator within three years of the date the theft allegedly occurred; claims for higher amounts must be made under the WPCL and PMWA.

• Complaint Process:
  • After filing a claim with the Wage Theft Coordinator, an employer has 30 days to submit a response and produce records.
  • The Coordinator will provide a written adjudication within 60 days of the employer’s response, or 110 days of the complaint if no response is submitted.
  • The Coordinator’s final decision can be appealed by either party within 30 days.

• Creates a Private Right of Action: The ordinance provides a private right of action that allows a complaint to be filed in court at any time within the applicable statute of limitations.

• Penalties:
  • Administrative penalties can be assessed for each violation. If an employer has been ordered to pay wages, each week the wages are not paid constitutes an additional, separate violation that penalties may be imposed upon.
  • The ordinance also allows the City to deny, suspend, or revoke any license or permit currently sought by or issued to the violator. Upon revocation or suspension, the license or permit holder cannot obtain any license or permit from the City for one year, although an individual can attempt to appeal such denial, suspension, or revocation.

• Anti-Retaliation: Employers are prohibited from retaliating against employees who file a complaint of wage theft.

• Notice and Posting Requirements:   Employers must display a workplace poster and include language in their handbooks informing employees of their rights and the anti-retaliation protection.  The posting must be published in the first language spoken by at least 5% of the employer’s workforce.

 Action Items

1. Display the Wage Theft Complaint poster in a conspicuous location, available online here.
2. Review details about the Ordinance on the Philadelphia City Council website here.
3. Contact ManagEase at (888) 230-3231 for assistance in updating employee handbooks to include appropriate notice of employees’ rights.

Fair Practices Ordinance

Effective July 7, 2016, the Fair Practices Ordinance was amended to prohibit employers from discriminating against employees or job applicants due to negative credit history.  The ordinance applies to both public and private employers doing business in the City of Philadelphia.  Employers may not consider credit-related information with regard to employment decisions such as “hiring, discharge, tenure, promotion, discipline, or consideration of any other term, condition or privilege of employment with respect to such employee or applicant.”

Exemptions to the Fair Practices Ordinance include law enforcement agencies, financial institutions, or when the credit-related information is sought with respect to efforts to obtain information regarding taxes or other debts owed to the City of Philadelphia, or if the information must be obtained pursuant to state or federal law.

Additional, job-specific exemptions may apply if the position:

• requires an employee to be bonded under applicable law;
• is supervisory or managerial in nature;
• requires “significant financial responsibility to the employer” (not including duties customary in the retail setting);
• involves access to sensitive financial information (not including information customarily obtained in the retail setting); or
• requires access to “confidential or proprietary information that derives substantial value from secrecy.”

“Duties” or “information customarily obtained in the retail setting” includes operations such as handling credit cards or engaging in sales transactions, such as a cashier.

In the event an employer must take an adverse employment action due to credit-related information, the applicant or employee must be notified in writing of the details of the decision.  The applicant or employee must also be given the opportunity to submit an explanation before the final action is undertaken.

Action Items

1. Train managers on the expanded anti-discrimination ordinance. Remove credit-related inquiries from hiring and employment decision procedures when they are non-essential to the job duties and do not qualify for a potential exemption.

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.

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