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Philadelphia Enacts Key Changes to ‘Ban the Box,’ Credit Screening Ordinances

Changes to Philadelphia law will further restrict employers’ use and reliance on applicant, current employee, and independent contractor background information and affect the employee application and employee management process.

Amendments to Philadelphia’s Unlawful Credit Screening Practices in Employment ordinance and Fair Criminal Record Screenings Standards ordinance (FCRSS), commonly referred to as the “Ban the Box” regulation, took effect March 21, 2021, and April 1, 2021, respectively. The regulations supplement the governing requirements of the federal Fair Credit Reporting Act (FCRA) and Pennsylvania’s Criminal History Record Information Act (CHRIA).

Changes to Unlawful Credit Screening Practices in Employment

Bill No. 200614 amends the Unlawful Credit Screening Practices in Employment ordinance to clarify that Philadelphia employers following the FCRA’s adverse action regulations are also in compliance Philadelphia requirements. The credit ban ordinance requires employers to disclose their reliance on credit information to the applicant or employee in writing, identify the particular information upon which the adverse decision was based, and “give the employee or applicant an opportunity to explain the circumstances surrounding the information at issue before taking any such adverse action.”

In addition, Bill No. 200413 eliminates previous exceptions on the use of employee or applicant credit screenings. Prior to the amendment’s implementation, employers were precluded from conducting credit screenings for employees, but-for employment with “any law enforcement agency or financial institution.” The amendment removes that blanket exception and provides that law enforcement agencies or financial institutions may conduct credit screening only under specific circumstances, such as where the credit information “must be obtained pursuant to state or federal law” or the “job requires an employee to be bonded under City, state, or federal law.”

Changes to Fair Criminal Record Screening Standards Ordinance

An amendment to the FCRSS affords current employees the same employment protections as applicants relative to their criminal background histories.

Since its 2016 enactment, the FCRSS has prohibited Philadelphia employers from asking potential employees (or current employees applying for another position) about criminal backgrounds on job applications or during job interviews. Further, Philadelphia employers could run a criminal background check only after making a conditional offer of employment. If the criminal inquiry or background check reveals a conviction within seven years, the employer must consider (i) the nature of the offense and the time that has passed since it occurred, (ii) the particular duties of the job being sought, and (iii) the applicant’s job history, character references, and any evidence of rehabilitation. Employers may reject applicants based on criminal records only if the potential employee’s history suggests an unacceptable risk to the business or to others. With its emphasis on the application process, it mirrored the language of the Pennsylvania CHRIA.

Bill No. 200479 amends the FCRSS to make it applicable not only to the application or transfer process, but to the use of any current employee criminal histories. The law’s restrictions and procedural requirements now apply also to current employees, as well as applicants in Philadelphia. Moreover, independent contractors and gig workers are afforded the same protections as full-time or part-time employees or applicants.

The amendment also provides that, even where criminal background clearance is a legal requirement for a particular position, a conditional offer must precede a criminal background check or criminal inquiry. Due to language ambiguities, it is unclear as to whether a criminal inquiry even post-conditional offer is permissible if such inquiry is not mandated by law.

The new provision permits an award of “liquidated damages, equal to the payment of the maximum allowable salary for the job subject to the complaint for a period of one month,” up to a maximum of $5,000.

Jackson Lewis P.C. © 2022National Law Review, Volume XI, Number 99

About this Author

Susan M. Corcoran, Jackson Lewis, fair credit reporting lawyer, Labor Policy Attorney

Susan M. Corcoran is a Principal in the White Plains, New York, office of Jackson Lewis, P.C. Ms. Corcoran is a seasoned employment counselor and litigator and is often thought of as the “go to” person on national workplace law issues for her clients.

She is one of the leaders of the firm’s Background Check Resource Group, and serves as a resource on fair credit reporting act issues, as well as “ban the box” strategies. She taught a graduate employment law class for many years at Manhattanville College and frequently speaks...

Richard Greenberg, Jackson Lewis, workplace grievances lawyer, arbitrations litigation attorney

Richard Greenberg is a Principal in the New York City, New York, office of Jackson Lewis P.C. He advises both unionized and union-free clients on a full-range of labor and employee relations matters.

With respect to traditional labor matters, Mr. Greenberg represents clients in collective bargaining negotiations, labor disputes, grievances and arbitrations, proceedings before the National Labor Relations Board, and in state and federal court. Mr. Greenberg also advises clients on the legal aspects of remaining union-free....

Eileen Keefe Labor Lawyer Jackson Lewis Philadelphia Law Firm

Eileen K. Keefe is a Principal in the Philadelphia, Pennsylvania, office of Jackson Lewis P.C. Her practice focuses on representing employers in workplace law matters, including preventive advice and counseling.

Timothy McCarthy, Jackson Lewis, labor attorney, workplace law counsel, preventive advice lawyer, human resources representation

Timothy M. McCarthy is an Associate in the Philadelphia, Pennsylvania, office of Jackson Lewis P.C. His practice focuses on representing employers in workplace law matters, including preventive advice and counseling.

While attending law school, Mr. McCarthy was an executive editor of the Rutgers Law Journal and participated in the Hunter Moot Court Competition. Mr. McCarthy was named a Michael Young Scholar for his participation in the Marshall-Brennan Constitutional Literacy Project, and served as a judicial intern in the U....