The Philadelphia City Council unanimously passed the Protect Our Workers, Enforce Rights Act (POWER Act) on May 8, 2025, setting a new standard for worker protections for more than 750,000 workers in Philadelphia. Applicable to all employers operating within the city’s geographic boundaries, the act introduces stringent measures to prevent retaliation against employees who assert their rights and empowers the Office of Worker Protections to enforce compliance with local worker protection laws by imposing steeper financial penalties on noncompliant employers.
The POWER Act (or Act) introduces several significant measures aimed at bolstering workers’ rights:
- Retaliation Protections: The Act makes it unlawful for employers to retaliate against employees who exercise their rights under the Act. This includes protections against adverse actions such as termination, demotion, or any form of discrimination. Notably, there is a rebuttable presumption of unlawful retaliation if the adverse action occurs within 90 days of the employee filing a complaint, cooperating with the Philadelphia Department of Labor’s Office of Worker Protections (OWP), opposing any policy or practice that is unlawful under the Act, or informing any person about their employer’s alleged violations of the Act.
- Compensation: The Act allows workers to receive direct financial compensation when their rights are infringed, a notable departure from previous practices where penalties were directed solely to the city.
- Strengthened Department of Labor: The Act empowers the OWP to conduct more thorough and proactive workplace investigations and to hold employers accountable for violations of local employment laws, such as the Paid Sick Leave ordinance and Domestic Workers’ Bill of Rights. The Act also permits the city to suspend or revoke business licenses and city procurement contracts of employers with repeated violations and mandates the creation of a “Bad Actors Database” to publicly list employers with three or more infractions.
- Immigrant Worker Protections: The Act authorizes the OWP to certify applications and submit statements of interest on behalf of immigrant workers, including those subject to unlawful retaliation, who may be eligible for a U Visa or T Visa under the Victims of Trafficking and Violence Protection Act or for the Deferred Action Program under 6 USC § 202(5) and 8 USC § 1103.
- Sick Pay: For tipped workers, the Act raises the hourly rate for paid sick leave under the existing Paid Sick Leave ordinance. The hourly rate for paid sick time is calculated by taking the numerical average of the hourly wage for “Bartenders,” “Waiters & Waitresses,” and “Dining Room & Cafeteria Attendants & Bartender Helpers” as defined under the Standard Occupational Classification Code and as published for Philadelphia County by the Pennsylvania DOL.
PENALTIES UNDER THE POWER ACT
If the OWP determines that an employer has violated the Act, the agency can seek civil penalties of $2,000 for each violation. The city will create a Worker Justice Fund for fines collected from violations to give back to workers who have suffered economically, physically, or emotionally because of retaliation. Additionally, employees are entitled to liquidated damages equal to the other monetary damages determined to be owed. Employers could also face suspension of business licenses and city procurement contracts for repeated violations.
IMPLICATIONS FOR EMPLOYERS
For employers, the POWER Act aims to introduce a new level of accountability and presents additional risk arising from potential noncompliance with Philadelphia’s existing employment and worker protection laws, such as the Paid Sick Leave ordinance and Domestic Workers’ Bill of Rights.
To mitigate such risks, employers in Philadelphia should
- become familiar with the POWER Act’s new requirements;
- audit existing employee policies to confirm compliance with Philadelphia’s local employment laws;
- maintain accurate records of hours worked, sick time taken, and payments made to employees; and
- consider the POWER Act’s rebuttable presumption of retaliation when considering potential adverse employment actions that would occur within 90 days of an impacted employee’s protected activity.
CONCLUSION
The POWER Act represents a significant development in Philadelphia’s local and employment laws, with far-reaching implications for employers in Philadelphia. By understanding the Act’s provisions and proactively addressing potential compliance challenges, employers can avoid penalties, protect their businesses, and support their workforce.