Philadelphia Employers Face New Requirements Under the POWER Act
July 2, 2025
Publications
The City of Philadelphia recently enacted the Protect Our Workers, Enforce Rights Act (“POWER Act”), which imposes a variety of new requirements for most employers operating within the City limits. The POWER Act extends additional protections for workers in several areas, including paid sick leave, wage theft protections for misclassified independent contractors and immigrant workers, stronger anti-retaliation provisions, and more.
Expansion of Sick Leave: The POWER Act requires sick leave to be provided to probationary employees covered by a collective bargaining agreement, who were previously excluded from the City’s sick leave requirements. The Act also implements a new formula for calculating the hourly rate for paid sick leave for tipped workers based on the average wage for Bartenders, Waiters & Waitresses, and Dining Room & Cafeteria Attendants & Bartender Helpers, as determined for Philadelphia County by the Pennsylvania Department of Labor. The threshold of who is considered a “tipped” employee was also raised from $30 to $50 per month in tips.
Wage Theft Protections: The POWER Act empowers immigrant workers—regardless of immigration status—and independent contractors who believe they have been misclassified to file wage theft complaints.
Other Immigrant Worker Protections: Additionally, the Philadelphia Department of Labor’s Office of Worker Protections (“OWP”) is authorized to certify and submit statements of interest on behalf of immigrant workers who may be eligible for certain Visas under the Victims of Trafficking and Violence Protection Act or for the Deferred Action Program.
Increased Anti-Retaliation and Damages: The Act contains strong anti-retaliation provisions, including a rebuttable presumption of unlawful retaliation if an adverse employment action occurs within 90 days of the employee engaging in activity protected by the Act. Employers must provide clear and convincing evidence that they would have taken the adverse action regardless of the protected activity. The OWP has an increased ability to conduct investigations into potential violations of the POWER Act. Finally, the Act requires employers to provide notice to employees of their rights under the Act.
Employees with a cause of action under the POWER Act may pursue damages in court without first exhausting administrative remedies. Other penalties include fines of up to $2,000 per violation, plus suspension of business licenses and procurement contracts for repeated violations. Employers can also appear in a “Bad Actors Database” if they incur three or more infractions.
Takeaways: Employers operating in Philadelphia should take the time to become familiar with these new requirements, consider any necessary changes to policies or practices, notify employees of their rights under the Act, mitigate potential instances of retaliation, and stay tuned for additional guidance from the City.
Employers with questions about the POWER Act should contact the McNees Labor and Employment Group.
