Philadelphia Expands Criminal History And Credit Screening Ordinances, Further Restricting Employment Decisions – Employment and HR – United States -…

To print this article, all you need is to be registered or login on Mondaq.com.

Effective April 1, 2021, Philadelphia's Fair Criminal RecordScreening Standards Ordinance (FCRSS) will protect not only jobapplicants but also current employees, independent contractors andgig workers.

The FCRSS prohibits employers from inquiring into acandidate's criminal history until after a conditionalemployment decision has been made. Under the amended FCRSS,employers cannot automatically exclude applicants orcurrent employees, independent contractors and gig workers withcriminal conviction records from a job or class of jobs. Instead,employers must make an individualized assessment of therelationship between the conviction and the particular position,based upon six factors listed in the ordinance. If an employerrejects an applicant or current employee based on his or hercriminal record, the employer is required to notify the candidatein writing and provide the basis for its decision as well as a copyof the criminal history report.

Previously, the FCRSS only applied to job applicants. Under theamendments, employers cannot consider an applicant orcurrent employee's criminal history during the "employmentprocess," which includes reemployment or continued employment,such as a promotion, raise or termination. After making theconditional employment decision (whether that be a job offer,promotion, raise or termination), employers can consider acandidate's criminal history in accordance with theindividualized assessment and notice requirements in theordinance.

The amendments provide that employers are permitted to inquireand require employees to respond to inquiries aboutpending criminal charges when certain conditions are metand to require employees to report pending criminalcharges provided that the employer does so pursuant to a writtenpolicy detailing what offenses are reportable. While the amendmentsdescribe the circumstances under which an employer may take adverseaction against an employee based on a pending criminal charge, inlight of the restrictions under Pennsylvania's Criminal HistoryRecord Information Act (CHRIA) relative to applicants, employersshould focus on the conduct giving rise to the arrest and not thearrest itself to minimize (not eliminate) risk.

The amendments also extend protections to independentcontractors, transportation network company drivers, ride-hailingapp drivers and other gig economy workers. Covered employers nowinclude third parties or entities that facilitate the relationshipof work between two other parties as full- or part-time employeesor as independent contractors.

Previously, the FCRSS provided punitive damages not to exceed$2,000 per violation. Under the amendments, a complainant canrecover liquidated damages equal to the payment of the maximumallowable salary for the job subject to the complaint for a periodof one month, not to exceed a total of $5,000.

Note that the requirements under the city's FCRSS are inaddition to the restrictions under CHRIA and the federal FairCredit Reporting Act (FCRA). For example, the FCRA requires (1)written authorization from the applicant or employee, (2) apre-adverse action notice and (3) a post-adverse action notice. TheFCRSS requires an additional step, namely the employer must providethe applicant or employee with a copy of the criminal historyreport and 10 business days to provide evidence of the inaccuracyof the information or provide an explanation.

Effective March 21, 2021, the amendments to Philadelphia'scredit screening ordinance, which prohibits employers from askingfor or using an applicant or employee's credit history inconnection with employment decisions, update the statute'sprocedural requirements and expanded restrictions to lawenforcement and financial institutions.

Under the amendments, employers are required to follow theprocesses in the federal FCRA and, before taking adverse action,provide the individual with a written copy of the informationrelied upon and the right to dispute such information.

Previously, the city's credit screening ordinance exemptedlaw enforcement agencies and financial institutions. Under theamendments, law enforcement agencies and financial institutions canconduct credit screenings only if another exception under theordinance applies. For example, employers may conduct creditscreenings "pursuant to state or federal law" or if"the job requires an employee to be bonded under City, state,or federal law."

Note that the requirements under the city's ordinance are inaddition to the requirements under the FCRA.

Philadelphia, like many other jurisdictions, continues torestrict the use of criminal history in employment decisions. Inlight of the amended FCRSS, Philadelphia employers should assesswhether and under what circumstances to inquire about an applicantor employee's criminal background. Employers also should reviewtheir hiring and employment practices to ensure compliancewith the FCRSS as well as Pennsylvania's CHRIA, including withrespect to gig workers and contractors. In doing so, employers helpensure that they are complying with existing FCRSS website postingrequirements.

Employers should also be mindful that the U.S. Equal EmploymentOpportunity Commission (EEOC) and other government agenciesencourage case-by-case evaluation of an applicant's criminalconviction history as a means of combatting unlawfuldiscrimination. For example, in its 2012 Enforcement Guidance on the consideration of criminal recordsin employment decisions, the EEOC stated that the disqualificationof applicants based on criminal records may have a disparate impacton certain racial and ethnic groups. The EEOC Enforcement Guidancerecommends that employers conduct individualized assessments using,as a starting point, the "green" factors, which are: (1)the nature and gravity of the offense or conduct; (2) the time thathas passed since the offense, conduct and/or completion of thesentence; and (3) the nature of the job. Under Philadelphia'sFCRSS, employers must consider additional factors, including anyevidence of rehabilitation. Further, employers operating outside ofPennsylvania must be mindful that states such as California, Illinois and New York impose additional requirements and/orrestrictions, such as with respect to notices to applicants andemployees, convictions that can and cannot be considered andfactors that must be applied when making employment decisions.

Additionally, all Philadelphia employers, including lawenforcement and financial institutions, should reevaluate theircredit screening processes in light of Philadelphia's creditscreening ordinance, in addition to compliance with the federalFCRA.

For More Information

If you have any questions about this Alert, pleasecontact Jonathan A. Segal,Jonathan D.Wetchler, Elisabeth Bassani,any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group orthe attorney in the firm with whom you are regularly incontact.

Disclaimer: This Alert has beenprepared and published for informational purposes only and is notoffered, nor should be construed, as legal advice. For moreinformation, please see the firm's full disclaimer.

Read more from the original source:

Philadelphia Expands Criminal History And Credit Screening Ordinances, Further Restricting Employment Decisions - Employment and HR - United States -...