Philadelphia Restricts Employer Use of Credit Information for Employment Purposes

By Michael Klazema on 7/8/2016

In accordance with § 9-1130, subsection (1), employers must not procure, seek a person’s cooperation or consent to procure, or use credit information about an employee or applicant in connection with hiring, discharge, tenure, promotion, discipline, or consideration of any other term, condition, or privilege of employment for that employee or applicant.

There are exceptions to this ordinance. Subsection (1) does not apply:

  1. To any law enforcement agency or financial institution;
  2. To the City of Philadelphia for efforts to obtain information about taxes or other debts owed to the City;
  3. If that information must be obtained under state or federal law;
  4. If the job requires an employee to be bonded under City, state, or federal law;
  5. If the job is supervisory or managerial in nature and involves setting the direction or policies of a business or a division, unit, or similar part of a business;
  6. If the job involves significant financial responsibility to the employer, including the authority to make payments, transfer money, collect debts, or enter into contracts, but not including handling transactions in a retail setting;
  7. If the job requires access to financial information about customers, other employees, or the employer, other than information customarily provided in a retail transactions; or
  8. If the job requires access to confidential or proprietary information that derives substantial value from secrecy.

Exempt employers who consider taking an adverse action against an applicant or employee in reliance on the individual’s credit information must do two things:

  • First, the employer must disclose the fact of that reliance to the person in writing and identify and provide the particular information upon which the employer relied. We believe that an employer can satisfy this requirement by providing a pre-adverse-action notice that includes a grading note identifying the credit history as problematic or under review.
  • Second, the employer must give the employee or applicant an opportunity to explain the circumstances surrounding the information before taking adverse action. We believe that an employer can satisfy this requirement by combining (1) a reasonable waiting period after giving the pre-adverse-action notice and before taking adverse action with (2) a process that the employer identifies in the cover letter for the pre-adverse-action notice and that gives the applicant an opportunity to contact the employer to explain the circumstances surrounding the criminal history

The ordinance takes effect on July 7, 2016 and is accessible here for review:

What This Means to You:

  • Employers in Philadelphia cannot use an applicant’s or employee’s credit information for most employment purposes (with some exceptions).
  • Exempted employers who consider taking an adverse action against an applicant or employee based on their credit information must notify the individual in writing of the reliance on their credit information along with the specific credit information to be used in their decision.
  • Also exempted employers must allow the employee or applicant an opportunity to explain the circumstances surrounding the information at issue before taking an adverse action.

Tag Cloud
Recent Posts

Latest News

  • December 04 Chicago Public Schools has dismissed hundreds of employees, coaches, vendors, and volunteers based on background check findings. The district recently vowed to re-check the majority of its 68,000 employees after a Chicago Tribune investigation revealed holes in its background check policies.
  • November 29 Striving to create a safer environment more conducive to productive training and leadership development, the Army has recently moved to adopt a uniform policy of background checks for certain roles. 
  • November 27 California’s biggest public school district is waiving the cost of volunteer background checks. The move is meant to encourage more family - and community members to get involved with the school district.
  • November 22 Contractors play an important role in the workforce, delivering services to both individuals and organizations. Vetting contractors for suitability continues to be a challenge, as two recent articles prove.
  • November 21 When it comes to background and pre-employment checks, it can be instructive to look at the characteristics of the ten most massive U.S. employers.
  • November 20 The #MeToo movement is bringing about legislative changes employers need to know about. We review some of the laws recently passed in California.
  • November 19

    Will a criminal conviction show up on your background check forever? In most states, there is a year limit for how long background check companies can report older criminal information.

  • November 15

    Replacing an inconsistent array of procedures, Ontario's government has passed into law a reform act intended to clarify how police departments should handle requests for information to be used in background checks. 

  • November 14 The federal government has vowed to cut its backlog of security clearance background checks in half by spring. Currently, the backlog is approximately 600,000 names strong.
  • November 12 To ensure the best hires, DFWSPF has implemented a stringent employee screening process—one that includes background searches through