Key Takeaways
- The Protect Our Workers, Enforce Rights Act (POWER Act) went into effect on May 27.
- The POWER Act provides strong retaliation protections for employees who exercise their rights.
- Violations of the POWER Act can result in steep penalties, liquidated damages and public listing in a "Bad Actors" database with potential loss of licenses and city contracts.
On May 27, Philadelphia enacted the POWER Act, which introduces sweeping changes to the city's labor laws. Several provisions stand out for their immediate impact on Philadelphia employers.
Amendments to Philadelphia's Paid Sick Leave Law
The POWER Act amends Philadelphia's paid sick leave law in two important ways.
Tipped Employees
Before the POWER Act, sick time for tipped employees was required to be paid at the employee's normal hourly rate or at the minimum wage rate. The POWER Act now provides a specific formula for tipped employees' paid sick time. Rather than being determined by the employee's base wage, the rate is calculated by averaging the hourly wages for three occupational classifications – bartenders, waitstaff and dining room attendants – as published by the Pennsylvania Department of Labor and Industry for Philadelphia County.
CBA-Covered Employees
While Philadelphia's paid sick leave law did not apply to employees covered by a bona fide collective bargaining agreement (CBA), the POWER Act amends that law and excludes only non-probationary employees covered by a CBA. Consequently, Philadelphia employers must provide paid sick leave to CBA-covered employees while they are on probationary status.
Retaliation Protections
The POWER Act has now codified strong anti-retaliation protections across all Philadelphia worker protection ordinances. Under the Act, it is unlawful for "an employer or any other person to interfere with, restrain, deny the exercise of, or the attempt to exercise, any right" under the POWER Act or to otherwise retaliate against an employee for exercising any right protected by the Act. A rebuttable presumption of retaliation arises if an adverse action occurs within 90 days of any protected activity, which includes filing a complaint, informing others about an employer's alleged violation of the Act, cooperating with an investigation, or opposing any policy, practice or act considered unlawful under the Act.
Notice Requirements
Employers are required to provide written notice of employee rights under the Act. This includes information about paid sick leave, wage theft protections and anti-retaliation provisions. Notices must be provided in English and in any language spoken by at least 5 percent of the employer's workforce. Employers may comply by distributing written notices or posting multilingual posters in conspicuous workplace locations. Failure to comply with the POWER Act's notice requirements can result in civil penalties of up to $2,000 per violation.
Recordkeeping
The POWER Act imposes strict recordkeeping requirements. Employers must maintain contemporaneous, accurate records for at least three years, including hours worked, sick leave accrued and used, wages paid, and any disciplinary actions. These records must be made available to the Philadelphia Office of Worker Protections (OWP) upon request. Failure to maintain or produce records creates a presumption of noncompliance, shifting the burden of proof to the employer in any enforcement action.
Remedies and Enforcement
The POWER Act authorizes the OWP to investigate complaints, issue determinations and impose penalties. Remedies for violations of the Act may include reinstatement, back pay, liquidated damages equal to the amount of monetary damages, and civil penalties of up to $2,000 per violation. Employees also have a private right of action and may recover attorney's fees and costs. Notably, employers found to be in repeated violation of the POWER Act may be listed in a public "Bad Actors" database and face license revocation or disqualification from city contracts.
With the POWER Act's new protections for employees and significant penalties for noncompliance, employers should proactively review employment policies, update notice and recordkeeping practices, and ensure that managers and human resources personnel are aware of the new anti-retaliation standards. Staying ahead of these changes is essential to avoid potentially costly enforcement actions and reputational harm.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
