KEY TAKEAWAYS:

• Philadelphia is moving to active POWER Act enforcement: Proposed regulations make clear the city’s intent to investigate proactively, apply worker‑friendly presumptions, and impose enhanced penalties

• Enforcement carries serious financial and reputational risk: Violations may result in steep penalties, liquidated damages, public “Bad Actors” listing, and potential loss of licenses or city contracts

• Compliance preparation is now essential: Robust policies, documentation, supervisor training, and careful handling of complaints are critical risk‑management tools

The POWER Act is no longer a “watch and wait” law. With proposed regulations issued on April 15, 2026, investigations, penalties, and retaliation findings will become routine parts of enforcement at the end of the 30-day review period.

What Is the POWER Act?

The Protect Our Workers, Enforce Rights Act, signed into law on May 27, 2025, set a new standard for worker protections for more than 750,000 workers in Philadelphia and was the first legislation of its kind in the nation. Applicable to all employers operating within the city’s boundaries, the POWER Act expanded worker protections concerning wages, paid sick leave, and retaliation for workplace complaints. The POWER Act also expanded the Philadelphia Department of Labor’s enforcement powers by establishing stronger legal safeguards for workers and steeper financial penalties for employers who break the law.

What Happened in April 2026?

On April 15, the Philadelphia Department of Labor’s Office of Worker Protections (OWP) published three sets of proposed enforcement regulations in connection with investigations and enforcement of the POWER Act. While the POWER Act became law in May 2025, these April 2026 regulations operationalize the statute and signal a more aggressive, audit‑driven enforcement posture across all industries.

These regulations do not create new laws. Instead, they interpret the POWER Act, set enforcement procedures, clarify employer obligations, and formalize how investigations, penalties, and retaliation claims are handled. Following the publication of the regulations, a 30-day review period begins, wherein the public may request a public hearing on any of the proposed regulations. The regulations will take effect at the end of the 30-day period unless there is a hearing request. If there is a hearing, the regulations take effect 10 days after a hearing report is filed.

Key POWER Act Regulations and Requirements:

• Strengthens the OWP’s ability to conduct more thorough and proactive workplace investigations and hold employers accountable, including the authority to initiate investigations independently (without any formal complaint), unilaterally broaden the scope of investigations, and subpoena records and testimony. If the OWP determines that an employer has violated the POWER Act, the agency can seek civil penalties of $2,000 per violation as well as the recovery of liquidated damages payable directly to workers, and other consequences for repeated violations.

• Strictly prohibits retaliation against workers who exercise their rights, such as filing complaints, taking sick leave, or participating in investigations. Of significance, the POWER Act creates a rebuttable presumption of retaliation when an employer takes adverse action against a worker within 90 days of protected activity. The burden is on the employer to show a non-retaliatory, legitimate business reason for the employment action with clear and convincing evidence, which is a significantly higher legal burden than most other jurisdictions.
• Creates a private right of action against an employer who violates the POWER Act without having to exhaust administrative remedies. Before filing suit, however, the employee must give the employer written notice of the alleged infraction to allow for the opportunity to cure within 15 days. This requirement is waived when there is retaliation. The statute of limitations for a claim under the POWER Act is three years from the date the employee knew or should have known of the alleged violation, which is significantly longer than claims under most federal statutes.
• Requires employers to keep complete, contemporaneous records of hours worked by employees and hours of sick leave accrual and usage for at least three years (in addition to any federal recordkeeping requirements). Missing or inconsistent records create a presumption of violation by the employer.
• Mandates that employers provide notice to employees of their rights under the POWER Act through handbooks distributed to employees or in some other format.
• Strengthens protections for immigrant workers by authorizing the OWP to certify applications and submit statements of interest on behalf of those workers 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.
• Raises the hourly rate for paid sick leave for tipped workers under the Philadelphia paid sick leave ordinance so that workers do not face a financial penalty for using their paid sick time.
• Permits the OWP to suspend or revoke business licenses and city procurement contracts of employers with repeated violations and mandates the creation of a publicly accessible “Bad Actors Database,” consisting of employers with three or more infractions.

What This Means for Philadelphia Employers

The April 2026 POWER Act regulations mark a shift from complaint‑based enforcement to active labor policing. Compliance missteps in Philadelphia are now more likely to be detected, penalized, and made public. These regulations signal that Philadelphia intends to be one of the most enforcement‑forward labor jurisdictions in the country.

To be best positioned to avoid costly disputes and foster a compliant workplace, Philadelphia employers should consider:

• Review: Policies and procedures to update written policies and recordkeeping systems for those records required to be maintained under the new regulations – particularly for timekeeping, tipped pay, and sick leave accrual.
• Train: Supervisors, managers, and HR staff on expanded employee rights, retaliation risk, and documentation standards.
• Prepare: By publishing the regulations on April 15, Philadelphia is signaling to employers that the city will aggressively enforce the POWER Act. Employers should be prepared for audits, investigations, and possible penalties.

If you have questions about how this impacts your business, please contact:

• Christine D. Steere
• Scott R. Green
• Christopher P. Maugans
• Caroline J. Berdzik
• Stephen C. Mazzara
• Or another member of the Employment and Labor team