The New Year has come and gone and with it came hopes of new beginnings, resolutions and endearing expectations for all. For employees, that meant professional improvement and career path refinement, while for employers, it means year-end report audits, tax filings, first quarter forecasts, and just as important, new considerations and restrictions regarding compliance. This is especially true in the wake of the new presidential administration that promised to bring significant changes with swift and forceful reform. This shift in policy and culture will be sure to have an impact on individuals and employers alike. But for now as we can only anticipate those new policy reforms, employers needs to start acting now on these three new policies that are already, or soon will be, in effect for 2017.
Restrictions To Wage History Inquiries in Philadelphia
The first policy that should be on your radar as an employer in Philadelphia, is compliance with the new restrictions that limit your ability to inquire about an applicant’s wage history. The Wage History Ordinance was signed into law by Mayor Jim Kenney in late January. Aimed at helping to curb the pay gap for women and minorities, the new law makes it unlawful “for an employer, employment agency, or employee or agent thereof” to “inquire about a prospective employee’s wage history, require disclosure of wage history, or condition employment or consideration for an interview or employment on disclosure of wage history.” Specifically, “‘to inquire’ shall mean to ask a job applicant in writing or otherwise, and ‘wages’ shall mean all earnings of an employee, regardless of whether determined on time, task, piece, commission or other method of calculation and including fringe benefits, wage supplements, or other compensation whether payable by the employer from employer funds or from amounts withheld from the employee’s pay by the employer.”
The Wage History Ordinance was strongly opposed by the Greater Philadelphia Chamber of Commerce and many businesses as hurtful to employers, discouraging of other businesses from entering the city, and not likely to actually rectify the pay gap. Current efforts by the Pennsylvania Senate may also pre-empt the city on this issue, as it has already passed legislation that bars pay discrimination based on gender. The legislation is now set to be considered by the Pennsylvania House. Passage of this state law my lead to a court battle over whether state pre-emption is proper. Unless and until that changes, employers will still need to comply with the new city ordinance as it is set to go into effect in early May 2017.
Compliance with the New Form I-9
Second, if you haven’t already, employers should be using the new Form I-9. The new form went into effect on Jan. 22, 2017. The new form is also “smarter” as it can be completed online, and includes drop down menus and other digital features. However, employers need to be wary before adopting it whole-heartedly. While the form is considered “smart,” by the paper and pen crowd, the new I-9 “is not an electronic I-9 as defined in the regulations,” according to John Fay, vice president and general counsel of LawLogix, a division of Hyland Software, a company that specializes in cloud-based I-9. “Employers filling out the new form I-9 using Adobe Reader will still need to print the form, obtain handwritten signatures, store in a safe place, monitor reverifications and updates with a calendaring system, and retype information into E-Verify as required,” Fay said. However, for those employers who do wish to electronically save the I-9, they may destroy the hardcopy original as long as they take care when electronically storing the forms, to ensure the form’s security. According to Fay, employers should always ensure that they have “controls to detect and prevent the unauthorized or accidental creation, alteration or deletion of stored Forms I-9, including the electronic signature, if used; an inspection and quality assurance program that regularly evaluates the system; and controls to ensure an audit trail so that any alteration or change to the form since its creation is electronically stored and can be accessed by inspectors.”
There are also minor changes to the new form, geared toward reducing technical errors that can cause employers to face civil (and in some instances criminal) penalties. The new form will be valid until August 2019. Employer requirements on keeping the form for employees remain the same, either three years after the date of hire or one year after the termination date, whichever is later.
Use of Payroll Debit Cards
Amid litigation over an employer’s use of payroll debit cards and whether it complied with the state’s Wage Payment Collection Law (WPCL), in early November 2016, Gov. Tom Wolf signed a new law that permits the use of payroll debit cards and amends the Pennsylvania Banking Code. The new law, Act 161, expressly states that the use of payroll debit cards is permissible provided the employer, and the bank issuing the payroll debit card, comply with certain regulations.
Act 161 provides, in part, that the payroll card account shall be established at a financial institution whose funds are insured by either the FDIC or the National Credit Union Administration. Also, no employer may make the payment of any earned compensation through a payroll debit card a condition of employment or a condition to receive any benefits or other remuneration. Further, prior to obtaining an employee’s authorization, the employer provides an employee with clear and conspicuous notice of all of the employee’s wage payment options, the terms and conditions of the payroll card including any fees and any fees of any third party and the options for which an employee can access his wages without fees. The new law takes effect May 2017.
As we anxiously await more changes from the new presidential administration that are sure to affect both individuals and employers both locally and nationally, employers need to make sure they are compliant with state laws already in place while we anticipate the federal changes in the coming months. •