Philadelphia, PA Fair Practices Ordinance: Restricts use of credit history for employment

  The Mayor of Philadelphia signed a bill restricting the use of an applicant or employee’s credit history for employment purposes. Philadelphia joins the growing list of jurisdictions that have enacted similar laws: California, Chicago, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, New York City, Oregon, Vermont, and Washington.  This legislation goes into effect on July 7, 2016.

According to the Ordinance:

Key Provisions

It shall be an unlawful discriminatory practice for an employer – both public and private – to procure, to seek a person’s cooperation or consent to procure, or to use credit information regarding an employee or applicant in connection with hiring, discharge, tenure, promotion, discipline, or consideration of any other term, condition or privilege of employment with respect to such employee or applicant. 

Exemptions:

1.  any law enforcement agency or financial institution;
2. the City of Philadelphia with respect to efforts to obtain information regarding taxes or other debts owed to the City;
3. if such information must be obtained pursuant to state or federal law;
4. if the job requires an employee to be bonded under City, state, or federal law;
5. if the job is supervisory or managerial in nature and involves setting the direction or policies of a business or a division, unit or similar part of a business;
6. if the job involves significant financial responsibility to the employer, including the authority to make payments, transfer money, collect debts, or enter into contracts, but not including handling transactions in a retail setting;
7. if the job requires access to financial information pertaining to customers, other employees, or the employer, other than information customarily provided in a retail transaction; and
8. if the job requires access to confidential or proprietary information that derives substantial value from secrecy.  

If an employer relies, in whole or in part, on credit information to consider adverse employment action with respect to any person, and exemption (4), (5), (6), (7) or (8) applies, the employer:

1.  shall disclose the fact of such reliance to the person in writing and identify and provide the particular information upon which the employer relied; and
2. give the employee or applicant an opportunity to explain the circumstances surrounding the information at issue before taking any such adverse action.

 Remedies

The ordinance provides aggrieved persons with the right to file a complaint with the Philadelphia Commission on Human Relations or, after timely exhausting administrative remedies, to pursue a private right of action to recover the full panoply of damages available under the Fair Practices Ordinance, which includes compensatory damages, attorney’s fees and punitive damages.

Next Steps

Employers in Philadelphia that use credit reports or other credit information for employment purposes should consult with their employment attorney to ensure compliance. Multi-state employers should review their practices to ensure that they comply with both this ordinance and the laws of the other jurisdictions that now regulate employers’ use of credit information.    

 

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