Philadelphia Expands Ban the Box Coverage

The collective amendments, which became effective in part on March 21, 2021, and in total on April 1, 2021, have important implications for Philadelphia employers.

Philadelphia’s Ban the Box ordinance previously prohibited employers from asking certain job applicants about their criminal histories. The new changes expand Ban the Box coverage to also protect:

• Current employees.
• Independent contractors.
• Gig workers.

Certain procedural requirements and allowable damages are also modified. Given the scope of these amendments, Philadelphia employers should consider the need to adjust their policies and procedures accordingly.

Amendments to Ban the Box

Originally enacted in 2011, Ban the Box (Chapter 9-3500 et seq. of The Philadelphia Code) restricts an employer’s ability to inquire into a job applicant’s criminal history. The Ban the Box ordinance was created with the intent to assist the 1 in 3 Philadelphians with a criminal history secure employment.

Bill No. 200479 meaningfully expands Ban the Box coverage. Previously, the ordinance only covered applicants. Now, current employees, gig workers and independent contractors are also covered.

I. New Definitions Expand Ban the Box Coverage

The amendments expand several key definitions in § 9-3502. The definition of a covered “employee” is significantly broadened under a new provision, § 9-3502(4.1). This definition clearly broadens coverage to include independent contractors, rideshare drivers and workers in the gig economy:

Employee means any person employed or permitted to work at or for a Private Employer within the geographic boundaries of the City, including as an independent contractor, transportation network company driver, rideshare driver, or other gig economy worker.[1]

Further, the definition of a covered “private employer” under § 9-3502(9) is extended to include “any third-party person or entity that facilitates the relationship of work for pay between two other parties, as full-time or part-time employees or as independent contractors.”

§ 9-3502(9) now provides:

Private employer means any person, company, corporation, labor organization or association which employs any persons within the City of Philadelphia. It includes job placement and referral agencies [and], other employment agencies, and any third-party person or entity that facilitates the relationship of work for pay between two other parties, as full-time or part-time employees or as independent contractors.

This replaces the previous language:

“Private employer” means any person, company, corporation, labor organization or association which employs [ten or more] any persons within the City of Philadelphia. It includes job placement and referral agencies and other employment agencies.

Finally, changes to § 9-3504(1) confirm that current employees are now covered under the scope of Ban the Box protection:

The inclusion of such inquiry on an employment application shall be unlawful, whether or not certain Applicants or Employees are told they need not answer the question.

This replaces the previous language of § 9-3504 which only addressed “applicants” without mention of current employees:

The inclusion of such inquiry on an employment application shall be unlawful, whether or not certain applicants are told they need not answer the question.[2]

Taken as a whole, these and other definitional changes make many of the most meaningful changes to the law.

II. Private Right of Action and Other Considerations

Certain aspects of the ordinance’s private right of action under § 9-3508 are also changed. The pre-amendment provision for punitive damages is replaced with a liquidated damages section allowing that “liquidated damages, equal to the payment of the maximum allowable salary for the job subject to the complaint for a period of one month” are recoverable, up to $5,000.[3]

It remains unclear how the “maximum allowable salary” language will apply to gig workers and independent contractors. Further, given recent developments in Fair Credit Reporting Act (FCRA) litigation, which have allowed class actions for statutory damages, the new liquidated damages provisions may allow for class actions.

While the amendments generally expand the scope of the law, some noteworthy limitations are also included. For example, § 9-3503(2) provides in part:

Nothing herein shall prevent an Employer from making an inquiry, or requiring an Employee to respond to an inquiry, about a Pending Criminal Charge, when the employer possesses reasonably reliable information to indicate a Pending Criminal Charge has been lodged against the Employee that relates to the particular duties of their job…

Philadelphia employers should take care to review and consider how these amendments may impact their policies and procedures. Employers should also be mindful of how their rights and duties under Philadelphia’s Ban the Box ordinance complement state and federal laws, including but not limited to, Pennsylvania’s Criminal History Record Information Act (CHRIA) and Title VII of the Civil Rights Act of 1964.

Changes to Philadelphia’s Credit Screening Ordinance

Philadelphia’s Unlawful Credit Screening Practices in Employment ordinance largely prohibits credit screening by certain employers. The recent changes expand these limitations to financial institutions and law enforcement agencies. These entities were previously exempted.

The amendments also clarify that employers need only follow the FCRA’s pre-adverse action and adverse action requirements to remain in procedural compliance. Accordingly, certain requirements are eliminated, including but not limited to, providing additional written notice prior to making an adverse action based on credit information. These clarifications answer previously unresolved questions regarding whether compliance with the FCRA would also ensure conformity with the Philadelphia ordinance. The end result for employers is the city of Philadelphia’s requirements are now in line with the FCRA.

Conclusion

Philadelphia employers and business owners should be cognizant of the new requirements contained in the amended Ban the Box and Unlawful Credit Screening Practices in Employment ordinances. These changes may require modifications to employment and hiring practices. Policies and procedures should be reviewed and updated as needed to ensure compliance. For employers operating in the gig economy and/or those hiring private contractors, modifications to policies and procedures could be considerable. Because each business is unique, consultation with an attorney may be appropriate.

Co-authors Jonathan S. Krause and Matthew J. McDonald are partners in the litigation department at Klehr Harrison.

[1] This article emphasizes new language in bold. This emphasis does not appear in the original.

[2] Another new provision states, “Employment Process means the process by which an employer assesses the

suitability of an Applicant for prospective employment or consideration of any aspect of the

Employee’s re-employment or continued employment, including promotion, raise or termination.” § 9-3502 (5.1).

[3] § 9-3508(3) provides in relevant part, “(3) The court may grant any relief it deems appropriate, including the right of the complainant to recover for each violation:

***

(b) Liquidated damages, equal to the payment of the maximum allowable salary for the job subject to the complaint for a period of one month. Total liquidated damages shall not exceed five thousand dollars ($5,000).”