Philadelphia bans most credit checks for employment; Imposes new obligations

A recent blog from Jackson Lewis highlights key changes to Philadelphia’s Unlawful Credit Screening Practices in Employment ordinance and the city’s Fair Criminal Record Screenings Standards ordinance (FCRSS), commonly referred to as the “Ban the Box” regulation. Changes took effect on 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).

As noted in the blog,

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.”