Philadelphia Criminal Record and Credit Screening Amendments

February 25th, 2021 | Angela Preston, Senior Vice President and Counsel, Corporate Ethics and Compliance with Ryan Hannan, Compliance Associate

On January 20, 2021, Philadelphia Mayor Jim Kenney signed Bill No. 200479 (the “Amendments”) into law, thereby amending the Fair Criminal Record Screening Standards (the “Standards”) codified in Chapter 9-3500 of the Philadelphia Code.

The Standards initially took effect in 2011, placing Philadelphia among the first cities to ban the box for private employers, and prohibited those employing ten or more persons within the City from making inquiries into applicants’ criminal histories during the application process, and inquiries or adverse actions related to applicants’ non-pending arrests and non-convictions. In December 2015, amendments were enacted to expand the Standards to apply to employers who employed any persons within the City, limited consideration of applicants’ criminal histories to a seven year lookback period, required individualized assessments prior to revoking conditional offers, and required employers to allow applicants ten business days to respond to findings on their criminal history report. Additional amendments in 2018 prohibited employers from inquiries or adverse actions in relation to juvenile records.

The 2021 Amendments, which take effect on April 1, 2021, further expand upon the Standards in several ways. Notably, their scope is broadened to afford their protections to current employees, as well as independent contractors, rideshare drivers, and gig workers. Additionally, the definition of “Private Employer” is updated 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,” thereby extending the Standards’ requirements and prohibitions to such entities. Furthermore, the Amendments include the following clarifications:

• Employers are permitted to inquire about employees’ pending criminal charges, but only if they have reasonably reliable information which indicates that a pending charge has been filed, and that it is related to the duties of their job. This must be done pursuant to a written policy outlining which offenses the employer will consider reportable, and adverse action may only be taken if the offense bears relationship to the employee’s duties, or would pose unacceptable risk, and is driven by business necessity
• Inquiries into criminal history which may be required by state or federal law must still be delayed until a conditional offer has been extended

In addition to these updates, on January 20, 20221, the City also enacted Bill No. 200413 to amend the Philadelphia Code’s restrictions on credit screening for employment purposes. These restrictions, passed in 2016, established that it is an unlawful discriminatory practice to procure or make employment decisions related to an applicant or employee’s credit history, with certain exceptions. The recent amendments strike the exemption that was included for law enforcement agencies and financial institutions. Therefore, in order for these employers to run credit on applicants or employees, one or more of the remaining criteria must be met. More information about these exemptions, and other details about Philadelphia’s credit history restrictions, can be found in our Compliance Update from July 2016.

Employers located in Philadelphia, or who employ workers within the city, should review the Amendments against their current screening and inquiry practices in consultation with their legal counsel. Additionally, employers who screen for pending charges should work with their counsel to develop policies outlining if and how such offenses should be considered. Sterling clients who would like to modify their services in light of the Amendments should contact their account representative to assist in aligning their programs with the requirements. Employers who rescreen existing employees, and those who hire contractors or gig workers in Philadelphia are especially encouraged to review their programs and reach out to their representatives for assistance in bringing all applicable workers into their scope.

Philadelphia employers should also review their credit screening practices in consultation with their legal counsel to determine if, and to what extent, they should be running credit checks. Financial institutions who hire in Philadelphia are especially encouraged to review their practices since they will no longer be broadly exempt and should evaluate based on specific duties and positions. Sterling clients who would like to modify their service offerings or set up non-credit packages to assist in their compliance with these updates, should contact their account representative.

The full text of Bill No. 200479 can be found here: here. The full text of Bill No. 200413 can be found here.

The Information contained herein is for informational purposes only. Sterling is not a law firm, and none of the information contained in this notice is intended as legal advice. Clients are encouraged to consult with their legal counsel about the impacts of any requirements. This and other important legislative updates can be found on the Sterling website:  www.sterlingcheck.com/resources/compliance-updates/

Sterling is not a law firm. This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.