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State Regulator Announces Increased California Fair Chance Act Enforcement

“Fair Chance” -type laws are becoming more common across the country. These types of laws often restrict the types of criminal information employers can consider during the hiring process, or when certain criminal information can be considered. With the increasing adoption of “Fair Chance”-style laws, it’s sometimes unclear how, or if, agencies will enforce these types of laws. But one agency in California is stepping up their enforcement.

Proactive Measures to Enforce California’s Fair Chance Act

On October 20, 2021, the California Department of Fair Employment and Housing (DFEH) announced a new effort to identify and correct violations of the California Fair Chance Act (FCA).

The DFEH plans to use technology to conduct mass searches of online job advertisements for statements that violated the FCA. The department states that, “Blanket statements in job advertisements indicating that an employer will not consider anyone with a criminal history, such as “No Felons” or “Must Have Clean Record,” violate the Fair Chance Act’s requirement that employers consider an applicant’s criminal history on an individual basis, as well as any mitigating information provided by the applicant.”

In one day alone, they found over 500 problematic job postings. Those included “unlawful statements that the employer will not consider any job applicant with a criminal record.”  The DFEH is documenting the violations. Employers involved with the listings will also receive notice to remove unlawful statements.

DFEH’s steps show that state regulators are willing to enforce these types of laws.

But the state isn’t just about punishing violators. In an effort to help educate employers on the FCA, they created a Fair Chance Toolkit for guidance.

Understanding the Law in California to Avoid Violations

Without a clear understanding of the employment laws, you could be putting yourself at risk of a potential violation. For employers that hire in California, that means staying compliant with the FCA (Cal. Gov. Code § 12952). This law generally makes it an unlawful employment practice for companies that employ five or more people, with some exceptions, to:

  • Ask questions about or consider an applicant’s conviction history before a conditional offer. This also entails including questions on an employment application that seek the disclosure of an applicant’s conviction history.
  • Consider, distribute, or disseminate any of the following while conducting a conviction history background check in connection with an application for employment:
    • Arrests not followed by conviction, except when allowed by state law
    • Referral to or participation in a pretrial or posttrial diversion program
    • Convictions that have been sealed, dismissed, expunged or statutorily eradicated
    • Any conviction for which the convicted person has received a full pardon or has been issued a certificate of rehabilitation

In addition to these restrictions, certain employers in California have more to consider if they intend to deny an applicant employment based solely, or in part based on the applicant’s conviction history. This includes:

1. Conducting an individualized assessment of whether the conviction history has a direct and adverse relationship with the specific duties of the job that justifies denying employment to the applicant. The assessment must consider:

  • The nature and gravity of the offense or conduct
  • The time that has passed since the offense or conduct and completion of the sentence
  • The nature of the job

2. Employers that make a preliminary decision to take adverse action after the assessment must send the applicant a notice of the preliminary decision in writing. The notice must contain:

  • What conviction(s) are the basis for the preliminary decision
  • A copy of the conviction history report
  • An explanation of the applicant’s right to respond before the employer’s preliminary decision becomes final. This explanation must detail the deadline for the applicant to respond and inform the applicant that the response can include submission of evidence challenging the accuracy of the conviction history, evidence of rehabilitation or mitigating circumstances, or both

3. Employers must allow the applicant at least five days to respond before making their final decision. If during this initial waiting period the applicant notifies the employer, in writing, that they are disputing the accuracy of the conviction history, and that the applicant is trying to obtain evidence supporting their dispute, the employer must give the applicant five additional days to respond to the notice. The employer must consider information provided by the applicant before making a final decision.

4. If, after considering evidence from the applicant, the employer makes a final decision to deny an applicant based solely or in part on their conviction history, the employer must notify the applicant in writing:

    • Their final denial, which may include justification of their decision
    • Any existing procedure the employer has for the applicant to challenge the decision or request reconsideration
    • The right to file a complaint to DFEH

Employers may want to review their current job postings with their legal team to make sure they remain in compliance with the changing laws.

A Potential Case of Negligence in Florida Emphasizes Screening for Risky Hires

It’s a nightmare scenario when there is a threat to an individual. Or worse, if someone takes another’s life. While tragedies related to an employee is rare, it’s a situation HR teams may choose to prepare for. Many employers even pinpoint safety as a top reason for doing background checks.

A recent complaint filed in Florida relates to a terrible situation like this. An employee of a housing complex allegedly killed a woman, who was a fellow employee and tenant. And while the details are startling, this pending case is a reminder to employers. Companies run a risk of negligence if they don’t hire and employ responsibly. They should act with the safety of their staff, customers, and the public in mind.

Alleged Events that Ended in Tragedy

The estate of the alleged victim, Miya Marcano, filed a lawsuit in Orange County, Florida on October 18, 2021 against Arden Villas Apartments, LLC (“Arden Villas Apartment”) and the D.P Preiss Company, Inc. (“Preiss”), among others. The complaint states that Marcano was hired by Preiss in June, 2021 to work in the front office of the Arden Villas Apartments, where she was also a tenant.

According to the complaint, during her employment, Marcano met Armando Caballero, who also was employed by Arden Villas Apartments and/or their agents or employees, including Preiss. At some point, she voiced her discomfort with Caballero to her parents and colleagues. But, according to the complaint, it was common for management at the complex to ignore complaints from staff and tenants.

In September 2021, Caballero allegedly kidnapped Marcano from her own apartment. The complaint states that Caballero used a key fob, or other access control device, given to him by the defendants to get into Marcano’s residence. She was later found dead.

The complaint states that “At no time was [Marcano] made aware by the management of Arden Villas that Caballero had a criminal background, a history of harassing women, nor was she aware that Caballero would have unsupervised and/or free access to her apartment.”

Accusations of Negligence

Among other claims, the complaints alleges that the defendants should have been aware of the risk Caballero posed. Defendants knew, or should have known, “that he should have not been hired, not been retained, and/or not been given a key fob (or other access device) that provided unfettered access to apartments…”

Additionally, the complaint alleges that because some employees had access control devices that allowed them to enter apartments, “Defendant had a duty to ensure that all persons that sought to work for defendant and/or at Arden Villas, were properly vetted, and that only appropriate persons were hired”.

Filing documents allege that Arden Villas and others breached their duty to exercise reasonable care and safety for the protection of residents, including Marcano. They also claim that the defendants acted in a negligent manner in various respects, including, but not limited to:

  • Failing to adequately vet prospective employees, including Caballero
  • Failing to contact the prior employers of prospective employees, including Caballero
  • Failing to conduct criminal background searches of prospective employees, including Caballero
  • Failing to implement or execute an adequate screening process for potential employees, thereby allowing persons, that otherwise would be deemed dangerous, to work at Arden Villas

This case is pending and the allegations remain only allegations at this stage in litigation. However, this case highlights the potential risks to employers, their staff and customers, and more. Hiring candidates without proper vetting can result in a dangerous situation. Employers may want to work with their legal counsel to determine if their current background checks thoroughly protect their organization.

Hiring in New Jersey? Have Your Summary of Rights Ready

Last year we talked about New Jersey’s state-specific background check disclosure requirements. But this isn’t the only thing employers should know about New Jersey-specific requirements. Like Washington state, New Jersey also has a state-specific Summary of Rights.

According to New Jersey law, if using a background report for employment purposes, before taking adverse action based in whole or in part on information in the report, employers must provide a copy of the report to the candidate. In addition, the employer must also provide the candidate with “a description in writing of the rights of the consumer under [the New Jersey Fair Credit Reporting Act (NJFCRA.)] and the federal ‘Fair Credit Reporting Act’…”

Consumer Rights & Protections in New Jersey

What are the rights of consumers under the NJFCRA?  The NJFCRA is similar to the federal Fair Credit Reporting Act and contains a number of consumer rights, including, but not limited to:

  • Required consent – The candidate must provide written authorization to obtain a background report about them for employment purposes.
  • Required disclosure – Before procuring a background report for employment purposes, employers must provide a clear and conspicuous written disclosure to the candidate. The document must solely disclose that the employer may obtain a background report for employment purposes.
  • Specific disclosuresSpecific disclosures are required if obtaining information in the background report through personal interviews with neighbors, friends, associates, or acquaintances of the candidate or others with knowledge of the candidate. (An “investigative consumer report,” as defined by New Jersey law).
  • Pre-adverse action requirements – If using the background check for employment purposes, employers must provide specific notices to candidates before taking adverse action.
  • Right to information – Candidates have the right to request and receive all information in their file from a consumer reporting agency.
  • Dispute process – Candidates have the right to dispute information contained in their file directly with a consumer reporting agency.
  • Information removal – Consumer reporting agencies are required to delete or modify inaccurate, incomplete, or unverifiable information.
  • Remedies – Candidates have the right to seek damages from violators of the NJFCRA.

Employers should work with their legal counsel to determine if their New Jersey Summary of Rights complies with the New Jersey Fair Credit Reporting Act. Verified Credentials’ clients can access sample documents in the Resource Library, including a sample New Jersey Summary of Rights,  to help as they create their candidate-facing documents.

New Guidance on Cannabis Drug Tests in New York State

Legal recreational marijuana use continues to shake up drug testing policies in the workplace. The state of New York recently joined the growing list of states that have legalized the recreational use of marijuana with the passage of the Marijuana Regulation and Taxation Act (MRTA).  The act, among other things, included amendments to the New York Labor Law.

Changes to the New York Labor Law

The amendments to the New York Labor Law Section 201-D now makes it unlawful, unless otherwise provided by law, for an employer to refuse to hire, employ or license, discharge from employment, or otherwise discriminate against an individual in compensation, promotion or terms, conditions or privileges of employment because of:

  • An individual’s legal use of consumable products or legal recreational activities, including cannabis in accordance with state law, outside of the employee’s work hours, off the employer’s property, and without the use of the employer’s equipment or property.

There are some exceptions.  According to New York Labor Law Section 201-D(4-a), an employer can take action specifically related to the use of cannabis if:

  • The employer’s actions were required by state or federal statute, regulation, ordinance, or other state or federal governmental mandate.
  • The employer would be in violation of federal law.
  • The employer would lose a federal contract or federal funding.
  • The employee displays specific articulable symptoms of impairment while working that decrease the employee’s performance of their tasks or duties or interfere with the employer’s obligation to provide for a safe and healthy workplace as required by state or federal occupational safety and health law.

Additionally, the law states that employers are not in violation of the law if the employer takes action based on the belief that:

  • The employer’s actions were required by statute, regulation, ordinance, or other government mandate.
  • The employer’s actions were permissible pursuant to an established substance abuse or alcohol program or workplace policy, professional contract, or collective bargaining agreement.
  • The individual’s actions were deemed by an employer or previous employer to be illegal or to constitute habitually poor performance, incompetency, or misconduct.

New Guidance on Cannabis Testing

In October 2021, the New York Department of Labor (NY DOL) issued guidance to “address some of the most common situations or questions in the workplace related to adult-use cannabis and the Marijuana Regulation and Taxation Act.”

The NY DOL guidance includes valuable information for employers regarding the amendments to New York Labor Law Section 201-D.  This includes guidance on drug testing employees.  According to the NY DOL guidance, an employer cannot test for cannabis, unless they are covered by one of the limited exceptions from New York Labor Law Section 201-D(4-a), listed above, or other applicable laws.  The guidance goes on to clarify that employers can drug test employees for cannabis if federal or state law requires drug testing or makes it a mandatory requirement.  However, “an employer cannot test an employee for cannabis merely because it is allowed or not prohibited under federal law.”

The guidance clarifies that both the MRTA and New York Labor Law Section 201-D apply to all public (state and local government only, the federal government, as an employer is exempted) and private employers in New York state, regardless of size, industry or occupation. They apply to all employees employed within the State of New York.  They do not apply to employees that work remotely in a different state, individuals that are not employees (e.g., students who are not employees, independent contractors, and volunteers), and employees under the age of 21, as cannabis use by individuals under the age of 21 is prohibited by New York state law.

You may want to review Section 201-D of New York Labor Law and the NY DOL guidance with your legal counsel to determine if you need to make adjustments to your drug testing policy. If you would like to add a drug testing package without cannabis, we can help. Please contact Verified Credentials support for assistance at 800.938.6090 or fill out this form.

Rideshare Companies in the Hot Seat for Screening Practices

Transportation service giants Uber and Lyft have faced a fair share of attention related to their drivers. Buckley v. Uber claim both rideshare companies failed to comply with federal background check laws.  A driver that worked with both companies recently filed a complaint in the Eastern District of New York on August 27, 2021.

The complaint alleges Uber and Lyft, along with their screening provider, Checkr, failed to comply with certain requirements of the Fair Credit Reporting Act (FCRA). More specifically, it alleges that Uber and Lyft failed to follow the FCRA’s “pre-adverse action” requirements.

What Are the Pre-Adverse Action Requirements?

If using a background report for employment purposes, before taking any adverse action based in whole or in part on information in the background report, employers are required to provide the candidate with:

1. A notice that includes a copy of the background report

2. A copy of the FCRA Summary of Rights

Providing these documents gives the candidate a chance to review what was found in their background report. Then, if they believe there was an error in the background report, the candidate has the ability to dispute the information.

Accusations Against the Rideshare Companies

According to the complaint, driver Donald Buckley had been an Uber driver beginning in 2018.  In April of 2021, a background report was ordered by Uber regarding Buckley. Later that month, Buckley “received notice from Uber that there was an issue with his background check. [Buckley] was unable to continue working for Uber with an incomplete background check…”

Regarding his employment with Lyft, the complaint states that Buckley was a Lyft driver beginning in 2019.  In June2021,  Buckley “received an email communication from Lyft stating that they were unable to complete his annual background check and that additional information was needed. Plaintiff was unable to continue working for Lyft with an incomplete background check.”

The complaint alleges that Uber and Lyft, prior to taking adverse action against him, failed to provide Buckley with either:

  • A copy of his background report
  • A written description of his rights under the FCRA

The complaint also contains various additional allegations against Uber and Lyft’s background screening provider, Checkr.

Buckley is seeking damages from all three of the defendants. Of course, the allegations against Uber, Lyft, and Checkr remain allegations at this stage in litigation.  Verified Credentials will attempt to provide updates on this case as they become available.

Planning a Roadmap to Adverse Action

The case against Uber and Lyft is a good reminder to employers about their obligations under the FCRA. Employers that use background reports for employment purposes may want to develop a clear plan if they are thinking of taking adverse action based in whole or in part on information from a background report. Learn more about Verified Credentials’ tool to help employers fulfil FCRA pre-adverse action and adverse action requirements. Work with your legal team to create a plan for your situation.

 

 

 

An Update on an FCRA Disclosure Case

The Fair Credit Reporting Act’s (FCRA) disclosure requirements haven’t always been clear to employers. A recent update to a long-running case, Walker v. Fred Meyer, Inc., adds additional clarification. to what employers may need to do to comply.

Historical Areas of Confusion

Among other things, the FCRA requires employers to notify candidates of the potential use of a background check for employment purposes. The FCRA requires an employer to:

  • Before a background report is procured, provide the applicant/employee with a clear and conspicuous written disclosure, in a document consisting solely of the disclosure, that the employer may obtain a background report on the applicant/employee for employment purposes

On the surface this disclosure requirement may seem straightforward. But employers have been accused of FCRA violations because they misinterpreted what this means. And regulators haven’t offered much guidance.

Luckily, courts have helped establish some points employers may want to consider. Let’s review a recent development in Walker, a case that has previously provided one court’s interpretation of FCRA disclosure requirements.

Walker v. Fred Meyer, Inc.

As previously discussed, the Ninth Circuit Court of Appeals reviewed defendant Fred Meyer’s disclosure document. The Ninth Circuit held, among other things, that some portions of Fred Meyer’s disclosure violated the FCRA’s “standalone disclosure requirement,” while other sections did not.  The Ninth Circuit then sent the case back to the District Court to determine if the remaining sections that did not violate the standalone disclosure requirement were “clear and conspicuous.”

The Latest – Partial Summary Judgement Granted

With the case returned to the lower court, Fred Meyer filed a motion for partial summary judgement seeking a declaration that:

1. Their disclosure was “clear and conspicuous”

2. The company didn’t act “willfully” with its violation of the standalone disclosure requirement

On August 13, 2021, a United States Magistrate Judge issued her findings and recommendation granting Fred Meyer’s motion for partial summary judgement. It was adopted by the District Court on September 24, 2021. Fred Meyer’s motion was granted.

In determining whether Fred Meyer’s disclosure was clear and conspicuous, the District Court relied on another recent Ninth Circuit disclosure case, Gilberg v. California Check Cashing Stores, LLC., stating, “The phrase ‘clear and conspicuous’ is not defined in the FCRA, but the Ninth Circuit has held [in Gilberg] that a disclosure is ‘clear’ when it is ‘reasonably understandable,’ and a disclosure is ‘conspicuous’ when it is ‘noticeable to the consumer.’”

The court found Fred Meyer’s disclosure language clear stating, “…as a whole does not suffer from grammatical errors or the kind of vague language the court found problematic in Gilberg.  Nor does the disclosure include any information regarding state laws that would ‘confuse a reasonable reader,’ like those in Gilberg.”

The court also determined that the disclosure is conspicuous stating, “First, the disclosure paragraphs are confined to a single page surrounded by ample whitespace and are preceded by a clear title [and]… The disclosure uses legible, clear font…Thus, there is no question that Fred Meyer’s disclosure is conspicuous as a matter of law.”

The Ninth Circuit found earlier that portions of Fred Meyer’s disclosure violated the standalone document requirement. In its recommendation to grant partial summary judgement for Fred Meyer, the District Court held that Fred Meyer’s violation was not a willful violation of the FCRA.

According to the court, “an FCRA violation is “willful” if it is made either knowingly or with “reckless disregard” for the requirements…” of the FCRA.  “An employer acts in ‘reckless disregard’ when “the action is not only a violation under a reasonable reading of the statute’s terms, but shows that the company ran a risk of violating the law substantially greater than the risk associated with a reading that was merely careless.”

Using this standard, the court determined that “…Fred Meyer’s disclosure was not based on an ‘objectively unreasonable’ interpretation of FCRA’s standalone requirement at the time Walker applied for a position.”  Even though Fred Meyer’s disclosure now violates the FCRA’s standalone disclosure requirement, it was not unreasonable for Fred Meyer to have provided Walker with the disclosure at the time it was provided.

The back-and-forth of these cases can be complex. But it offers valuable insights into the interpretation of FCRA requirements. Employers may want to review these decisions with their legal advisor to learn how they could impact them.

Rhode Island Works to Boost Pay Equality

The topic of salary equality has been prevalent in recent years. As part of this trend, Rhode Island recently passed amendments to its pay equity law.  This law applies to employers that employ any one person in the state of Rhode Island. The amended law aims to “…comprehensively address wage discrimination, based on religion, race, color, sex, sexual orientation, gender identity or expression, disability, age or country of origin by expanding employee protections and the scope of the remedies available to employees who have experienced wage discrimination.”

The governor signed the amended law on July 6, 2021. But employers will have plenty of time to review their policies and procedures. The law is not effective until January 1, 2023.

The amended law makes a number of detailed changes related to pay discrimination. In addition to addressing pay equity, the law also creates:

  1.  1. A wage history ban
  2.  2. A wage range disclosure requirement

Rhode Island’s Salary History Ban

Rhode Island’s salary history ban is similar to others across the country, including  in Nevada and Toledo, Ohio. Rhode Island’s law prohibits employers from:

  • Using wage history when deciding whether to consider an applicant for employment.
  • Requiring that an applicant’s prior wages meet a minimum or maximum criteria as a condition of being considered for employment.
  • Relying on an applicant’s wage history when determining the wages the applicant will be paid after being hired.
  • Seeking an applicant’s wage history.

After making an initial offer of employment with an offer of compensation, employers may use an applicant’s wage history to support a wage higher than the wage offered by the employer. However, an employer can only use wage history for this purpose if the wage history was voluntarily provided by the applicant, without prompting from the employer.  If an employer does use wage history for this purpose, the employer can seek to confirm the wage history.  Employers should take note that employers can only rely on wage history in the circumstances outlined above to the extent that it does not create an unlawful pay differential, as provided by Rhode Island law.

But what if an employer learns of a candidate’s salary history? First, there’s no penalty if the candidate is an employee of the company and the employer has knowledge of the candidate’s wage history with the employer. Employers can still obtain a background check that does not seek wage history.  But if the background check discloses the applicant’s wage history – they may want to proceed with caution. Even with the knowledge, employers can’t use it to make certain decisions. That includes determining wages, other compensation, or benefits for an applicant during the hiring process, including employment contract negotiations.

Additionally, employers are allowed to verify voluntarily provided information about an applicant’s unvested equity or deferred compensation that would be cancelled or forfeited by the applicant’s resignation from their current employment or any voluntary disclosure of non-wage related information.

Wage Range Disclosure Requirement

To add more transparency to the hiring process, Rhode Island’s amended law includes a wage range disclosure requirement. Upon request, employers must give applicants the wage range for the job. The law also states that employers should provide the wage range for the job the applicant is applying for before discussing compensation during the hiring process. In addition to applicants, employers must also give employees the wage range for their position at the time of hire, when moving into a new position, and anytime upon the employee’s request during the course of employment.

Employers may not refuse to interview, hire, promote, employ, or retaliate against an applicant or employee who either didn’t provide wage history or requested the wage range for a position.

Employers should work with their trusted legal counsel to determine if changes are needed to their current process.

Complaint Filed Against Walmart for Hiring Policies

The United States’ largest private employer faces a proposed nationwide class action lawsuit based on its screening policy. A complaint filed on July 16, 2021 alleges that Walmart “denies employment to many qualified applicants because of unrelated and/or stale criminal history” It also alleges the company “fails to account for evidence of rehabilitation or mitigating circumstances” related to criminal records.

One Experience Highlights the Experience of Many

The complaint against Walmart outlines the experience of named plaintiff Jacqueline Ramos. It alleges that Ramos is “a Black and Latinx woman who had a previous criminal conviction at the time she applied for employment at Walmart that was unrelated to the employment” she applied for.  The complaint claims that Ramos was qualified to work for Walmart, despite her conviction history, having completed a six-month internship with a Walmart subsidiary doing the same work she would have performed for Walmart.

Ramos states that she received an offer of employment from Walmart, but that “her job offer was… rescinded by Walmart because of her criminal history.”  According to the complaint, Ramos provided “strong evidence of her rehabilitation and mitigating circumstances”, but Walmart “failed to account for, or even consider” the evidence that was submitted.

Complaint Highlights Racial Disparities in the Justice System

The complaint makes the allegation that “[a]s a result of its overbroad policy, Walmart denied employment to Plaintiff and disproportionately denies employment to countless other Black and Latinx applicants.”

It states that “Walmart’s criminal history policy must be understood in the context of the reality that individuals who are Black or Latinx are significantly over arrested, convicted, and incarcerated in the United States.”

The filing alleges “Walmart’s criminal history screening policy and practice of denying opportunities to individuals with criminal convictions… constitutes unlawful discrimination on the basis of race, color, and/or national origin”, in violation of:

1. Title VII of the Civil Rights Act of 1964 (“Title VII”), as amended, 42 U.S.C. §§ 2000e et seq.

2. New Jersey Law Against Discrimination (“NJLAD”), N.J.S.A. 10:5-1 et seq.

It further alleges, in clarification of its discrimination claims, that Walmart’s criminal history policy has a disparate impact on Black and Latinx applicants and is not job-related or consistent with business necessity.

The class action complaint proposes two separate classes of individuals.  The first is a “Nationwide Class” of all “Black and Latinx individuals nationwide who, during the relevant statute of limitations period, were denied employment at Walmart based in whole or in part on their criminal history.”  The second is a “New Jersey Class” of all “Black and Latinx individuals in New Jersey who, during the relevant statute of limitations period, were denied employment at Walmart based in whole or in part on their criminal history.”

The allegations against Walmart remain allegations at this stage in litigation – no wrongdoing has been established at this point.  Verified Credentials will attempt to provide you with updates to this case as they become available.

Like the recent cases against Macy’s and New York Life Insurance Company, the claims against Walmart serve as a reminder that any employer that uses background checks for employment purposes should take care to ensure that their background screening policies comply with anti-discrimination laws.

If you have further questions about background screening compliance, you may wish to speak with trusted legal counsel.

I-9 Compliance Flexibility Extended Until the End of 2021

I-9 compliance has looked different for some employers since the beginning of the COVID-19 pandemic. The U.S. Department of Human Services (DHS) has offered continued I-9 flexibility to employers. On August 31, 2021, the U.S. Immigration and Customs Enforcement (ICE) announced that the flexibility will continue through the end of the year.

I-9 compliance flexibility will remain in place for employers with remote-only staff. According to ICE, employers may use flexible rules for employees hired on or after April 1, 2021. This policy applies to staff that works “exclusively in a remote setting due to COVID-19-related precautions.”

The extended policy expires on December 31, 2021.  DHS states that it will continue to monitor the ongoing national emergency and provide guidance as needed.  Employers are required to monitor DHS and ICE websites for additional updates on when extensions will be terminated, and normal operations will resume.

A Quick Review

While you may be familiar with this ongoing I-9 compliance flexibility, here’s a recap of the policy:

  • The flexibility refers to the physical inspection of an employee’s identity and employment authorization documents. Eligible employers can inspect their employee’s documents through methods like video, fax or email first. Employers must still obtain, inspect and retain copies of the documents within three business days. I-9 compliance flexibility is available for employers and workplaces that have employees working remotely and only for the employees working remotely. If employees are working on-site, no exceptions apply.
  • Once normal operations resume, employees onboarded using remote verification must report to the employer within three business days to verify the employee’s identity and employment eligibility documentation in-person. Employers that utilize the remote inspection option must provide written documentation of their remote onboarding and telework policies for each employee.
  • DHS has listed specific language for what should be included on the I-9 form when in-person physical inspection of documents has been delayed. Employers that take advantage of the I-9 compliance flexibility may want to review the DHS announcement carefully to ensure that their I-9 forms continue to meet DHS requirements.

For up-to-date details on I-9 compliance flexibility, check out I-9 Central.

Maine Beacons a Change in Hiring Practices

Like lighthouses dotting the coast of Maine, “Fair Chance” laws throughout the country provide a guiding light to prevent employers from running into rocky compliance issues. Maine is one of the latest states to pass this type of law. “An Act Relating to Fair Chance in Employment,” or Maine LD 1167, was signed by Governor Janet Mills on July 6, 2021. The law will be effective on October 18, 2021.

The state of Maine’s new law prohibits employers in the state (with some exceptions) from asking about criminal history record information in certain situations. Let’s better understand more about Maine’s new restrictions.

Application & Job Posting Restrictions

Like many other ban the box-style laws across the country, Maine’s law makes it illegal for employers to request criminal history record information on initial application forms. But the state’s restrictions go beyond the basics.

Maine’s law states that employers cannot make statements on initial application forms, advertisements, or specify, prior to determining a candidate is otherwise qualified for the job, that a person with a criminal history cannot apply or will not be considered for a job.

The state has outlined situations where employers may be exempt from these restrictions, including:

  • When a position is one where federal or state law, regulation or rule creates a mandatory or presumptive disqualification for one or more types of criminal offenses. In this case, questions and statements on the initial application form are limited to the specific criminal offense(s) that creates the disqualification.
  • When an employer is obligated under federal or state law, regulation or rule not to employ a person who has been convicted of one or more types of criminal offenses. In this case, questions and statements are limited to the specific criminal offense(s) that creates the obligation.

Interview Restrictions

In many cases, after the initial application, Maine employers have more freedom. An employer may ask a candidate about criminal history record information during an interview or once the candidate has been otherwise determined to be qualified for the job.

For employers that ask a candidate whether they have been convicted of a crime, Maine requires them to give candidates more room than just answering “yes” or “no” Employers must give candidates the chance to explain the information and circumstances regarding any convictions, including post-conviction rehabilitation.

As we approach fall, and the effective date of this new law, employers in Maine may want to review their applications, job postings, and more to make sure they align with the new requirements. Violations could start to add up for employers that don’t comply. Employers may be subject to penalties between $100 – $500 for each violation of the law.

If you have questions about how this law may impact your hiring process, you should work with your legal counsel.

Fair Chance Act Guidance Updated for New York City Employers

Amendments to the New York City Fair Chance Act (NYC FCA) took effect on July 29, 2021. According to the New York City Commission on Human Rights (NYCCHR) the changes generally “…[add] new protections for people whose criminal history includes unsealed violations and unsealed non-criminal offenses.  [The amendments] expand the protections of the Fair Chance Act to cover current employees and to reach pending cases.”  The NYC FCA applies to specified employers in New York City.

Before the amendments took effect, the NYCCHR issued updated Fair Chance Act guidance for employers. The guidance outlines how the NYCCHR has interpreted the NYC FCA and has tips on actions for employers to take to remain in compliance with the updated law. The revised guidance includes valuable insights for employers in the city. The NYCCHR’s lengthy guidance covers a lot of information, but there are a few key clarifications within the guidance to consider:

1. Examples of Non-Conviction Records that Employers Can’t Consider.

As we discussed, in general, the NYC FCA now prevents employers from inquiring about, denying employment or taking adverse action based on certain non-conviction records. In its guidance the NYCCHR lists some of these types of records that qualify as non-conviction records including an arrest without conviction, dismissed charges, and more. While detailed, the list is not exhaustive. There may also be exceptions for some employers.

The guidance also provides recommendations on how to permissibly ask about conviction history without violating the prohibition on inquiring about certain non-convictions, including providing a model conviction history question that employers can use.  The NYCCHR notes that employers cannot disqualify a candidate based on their refusal to answer an unlawful question about non-convictions.

2. Details on How to Conduct a Fair Chance Analysis.

In New York City, employers are required to do a Fair Chance Analysis if they are considering taking adverse action based on an applicant or employee’s conviction history.   The recent amendments to the law established NYC FCA specific “relevant fair chance factors,” in addition to state law fair chance factors.  The NYCCHR’s guidance details both city and state fair chance factors and provides clarification on when each set of factors should be used to conduct a Fair Chance Analysis.

3. Information on Additional Employee Protections.

After the recent amendments, the NYC FCA now also applies to current employees, in addition to new job applicants. The law protects employees from criminal history backlash unrelated to their role. The guidance provides additional detail on the protections now extended to current employees.  This includes, among other requirements, more information on both the new Fair Chance Analysis and Fair Chance Process for current employees.

4. Information on Additional New Candidate Protections.

The NYCCHR guidance makes one thing clear: “unless an exemption applies, criminal history may not be sought or considered by employers before a conditional offer of employment.” This extends to omitting any mention of a “criminal background check” when disclosing or getting authorization for an employment related background check prior to a conditional offer of employment. The NYCCHR encourages employers to use alternative terms rather than “background check”. It prefers use of “consumer report” or “investigative consumer report” instead.

These preferred terms are also reflected in select sample compliance documents from Verified Credentials. We offer sample documents incorporating this guidance for employers that hire candidates that live or work in New York City to review as they create their own. Clients can find these in our Resource Library.

5. On Considering a Two-Phase Background Check.

The new guidance details what employers should not do or consider before making a conditional job offer. And what they should do and can consider after. The guidance states that requesting and reviewing criminal history can only happen after favorably evaluating an applicant’s non-criminal information.

In fact, the NYCCHR suggests that employers working with a screening company should receive background information in two stages. First, obtain non-criminal background information. If the applicant is still in the running after reviewing that information, and the employer extends a conditional offer of employment to the applicant, then the employer can look at criminal history background information.  Because driving records may contain both non-criminal and criminal information, the NYCCHR instructs employers to only consider and review driving records after a conditional offer has been extended.

Separate review of non-criminal and criminal information, according to the guidance, insulates the employer from potential discrimination liability.

The NYCCHR acknowledges that some employers may face challenges if they are unable to get two separate reports from their screening provider. In those cases, the employer must establish a system to separate information. That way decisionmakers don’t receive the criminal history information until after making a conditional offer. Employers who take this route bear the burden of proving  the criminal history information was inaccessible to decisionmakers only after the conditional offer was made.

While an uncommon practice, Verified Credentials has adapted the screening process into a two-part process for other employers. If you need to learn about this unique process, our team is happy to help!

If you have questions about how you should apply this guidance to your screening, contact your trusted legal team.

Louisiana’s Fair Chance Law Goes into Effect

Like New York City, the state of Louisiana now has its own “Fair Chance”-style law. Louisiana Act 406 places new restrictions on employers that consider a candidate’s criminal history when making hiring decisions. “Employers”, with some exceptions, are any employers, private or public, with 20 or more employees working in Louisiana. Passed through the Louisiana State Legislature in the 2021 regular session, the Act was signed into law by the Governor on June 16, 2021. It went into effect on August 1, 2021.

“Fair Chance”-style laws often restrict the types of criminal information employers can consider during the hiring process, or when certain criminal information can be considered. These types of laws may aim to ensure that candidates are hired based on their merit and qualifications, rather than their past criminal history.

Find out how Louisiana has adopted this type of law.

Restrictions Vary by Record Type

Employers hiring in Louisiana may want to pay attention to what types of criminal records they request or consider when making a hiring decision. Unless otherwise provided by law, Louisiana’s new law prohibits the request or consideration of arrest records or charges that have not led to a conviction, if such information is received in the course of a background check.

New Requirements for Considering Certain Criminal Records

When considering other types of criminal records, employers must “make an individual assessment of whether an applicant’s criminal history record has a direct and adverse relationship with the specific duties of the job.” The assessment should include consideration of the following:

  • The nature of the offense and how serious it was
  • How much time has passed since the offense, conduct, or conviction
  • The nature of the job

Additionally, employers may be required to provide their candidates with additional information. Under Louisiana’s new law, employers are required to provide the candidate with any background check information used during the hiring process upon the candidate’s written request.

Louisiana employers may want to review their hiring processes with their legal team to determine if they comply with the new state law.

The Litigation Saga of Waterloo, Iowa’s Ban the Box Law

Cities have been quick to enact laws around the use of criminal history for employment purposes in recent years. These types of laws are commonly known as “Ban the Box” Laws.  In some cases, there is push back from the business community as to these laws. That’s what happened in the city of Waterloo, Iowa. Let’s catch up on the chain of events that surrounds the city’s ban the box law.

Waterloo’s Ban the Box History

Waterloo became the first jurisdiction in Iowa to enact a law around the use of criminal records for employment purposes. The city’s law took effect in July 2020. As enacted, among other things, Waterloo’s law makes it an unlawful discriminatory practice:

  • For an employer to include a criminal record inquiry on any application in connection with the employment of any person.
  • For employers with fifteen (15) or more persons, with some exceptions, to make any inquiry regarding, or to require any person to disclose or reveal, any convictions, arrests, or pending criminal charges during the application process, including but not limited to any interview.
  • For employers with fifteen (15) or more persons, with some exceptions, to make an adverse hiring decision:
    • Based solely on the applicant’s record of arrests or pending criminal charges that have not yet resulted in a conviction;
    • Based on any criminal records which have been lawfully erased or expunged, which are the subject of an executive pardon, or which were otherwise legally nullified;
    • Based on an applicant’s criminal record without a legitimate business reason.

The law impacts many employers in the city. It does not apply to employers that employ less than four persons in the City of Waterloo, the United States government, the State of Iowa, or any state or federal political subdivisions (except, of course, the City of Waterloo). Employers who are required by federal or state law or regulation to make a criminal record inquiry on an employment application are also exempt under this law.

Waterloo Challenged by Business

Before the law went into effect, the Iowa Association of Business and Industry (IABI) filed a lawsuit related to Waterloo’s law. Alleging it violated state law, the IABI asked the district court to prohibit Waterloo from enforcing its law, as well as declare that the it violates both the Iowa Code and the Iowa Constitution.

The Black Hawk County, Iowa District Court disagreed. The District Court decision noted that “the ordinance is consistent with authority given to cities by… [the Iowa Civil Rights Act] to provide ‘broader or different categories of unfair or discriminatory practices.’”.

Following the court’s decision, the IABI immediately filed an appeal.

A Final Decision?

The IABI’s appeal made its way to the Iowa Supreme Court. The Supreme Court issued an opinion on June 18, 2021, reversing part of the lower court’s decision by invalidating parts of the Waterloo ban the box law while upholding parts of the law

The Supreme Court disagreed with the District Court’s reliance on the Iowa Civil Rights Act. The Supreme Court held that they “…are not persuaded that [the Iowa Civil Rights Act] can sustain the ordinance.”

The Court instead reviewed the Waterloo ordinance in relation to Iowa Code section 364.3(12)(a). This section of Iowa law states that “a city shall not adopt, enforce, or otherwise administer an ordinance, motion, resolution, or amendment providing for any terms or conditions of employment that exceed or conflict with the requirements of federal or state law relating to a minimum or living wage rate, any form of employment leave, hiring practices, employment benefits, scheduling practices, or other terms or conditions of employment.”

In its lawsuit, the IABI had argued that the Waterloo ordinance violates Iowa Code section 364.3(12)(a), as it governs hiring practices and terms and conditions of employment in a manner that exceeds or conflicts with federal or state law.

The Supreme Court first addressed the City of Waterloo’s argument that “the ordinance is not preempted anyway because it does not ‘exceed’ the requirements of state and federal law.  Waterloo’s ‘Ban the box’ law, according to the City, simply implements existing civil rights law.”  The Court held that because the Waterloo ordinance “forbids every employer’s use of a criminal history box on the job application form for every job, even if the employer might have valid business reasons for asking about criminal history” the “requirements [of the Waterloo ordinance] go beyond Title VII (federal law) and the ICRA (state law).”

The Supreme Court then held that Iowa Code section 364.3(12)(a) only “preempts ordinances that prescribe different terms or conditions of employment… to the extent [the Waterloo] ordinance merely delays an inquiry into criminal history, it is not prescribing different terms or conditions of employment.”

The Court ultimately held that the provisions of the Waterloo ban the box law that actually set terms and conditions of employment are prohibited under Iowa state law.  This ruling voids the sections of the ban the box law that do not allow certain employers to turn down persons with certain types of criminal records.  However, the sections of the Waterloo ban the box law that simply address the timing of the criminal record history inquiry do not provide for terms and conditions of employment and are not prohibited by Iowa state law.

After this ruling, the following sections of the Waterloo ban the box law are now invalid under Iowa state law:

  • For employers with fifteen (15) or more persons, with some exceptions, to make an adverse hiring decision:
    • Based solely on the applicant’s record of arrests or pending criminal charges that have not yet resulted in a conviction;
    • Based on any criminal records which have been lawfully erased or expunged, which are the subject of an executive pardon, or which were otherwise legally nullified;
    • Based on an applicant’s criminal record without a legitimate business reason.

The Supreme Court determined that the other requirements of the Waterloo ordinance are allowed under Iowa state law and remain valid.

Employers in Waterloo may have questions about the final court ruling. You may want to review the final decision with your legal advisor to learn how this may impact your background checks.

Seeing Dollar Signs (or Not) on Salary Verifications in Nevada

Las Vegas is famous for high-rollers and big spending. It might seem like the city, and the broader state of Nevada, are all about the money. But now, a new state law is putting the brakes on discussions or inquiries about pay history, including wages and salary, for employment purposes.

Nevada’s Restrictions & Transparency Requirements on Pay

Nevada’s law is similar to others in place across the country like in Toledo, Ohio and Maryland. SB 293 was signed into law by Governor Sisolak on June 2, 2021. As of the effective date of October 1, 2021, employers in the state and employment agencies recruiting for employers in the state cannot:

  • Seek the wage or salary history of an applicant;
  • Use the wage or salary history of an applicant to determine whether to offer them employment or determine their rate of pay;
  • Refuse to interview, hire, promote or employ an applicant, or discriminate or retaliate against them, if they do not provide wage or salary history

But employers don’t have to be left in the dark. They can still ask applicants for their wage or salary expectations for the job.

In addition to the restrictions, employers are required to provide certain wage and salary information. This includes disclosing the wage or salary range or rate to:

  • Applicants that interviewed for the job
  • Current employees that applied and interviewed for a transfer or promotion and requested the wage or salary range or rate for the transfer or promotion

Talking About Pay Could Cost Employers

Here’s where Nevada employers may want to start thinking about money again. Once in effect, a person can file a complaint with the Nevada Office of the Labor Commissioner against employers and employment agencies for violating the new law.  Employers and employment agencies that fail to follow the law could face monetary penalties from the state’s Labor Commissioner. Every violation can result in up to a $5,000 administrative penalty in addition to any other remedy or penalty. On top of that, if an administrative penalty is imposed by the Labor Commissioner, employers could be responsible for the costs related to the Labor Commissioner’s administrative proceeding. This might include investigative costs and attorney fees.

Potential consequences may not stop there. Individuals that file a complaint with the state may also take legal action. Upon request to the Labor Commissioner, the complainant can get a right-to-sue notice if at least 180 days have passed after the complaint was filed. They person may, within 90 days of receiving the right-to-sue notice, bring a civil action against the employer in district court.

Taking Account of Definitions

The key players at the table are Employers and Employment Agencies and what is considered the applicant’s Wage or Salary History. Here are definitions laid out by the law:

  • An “Employer” means a public or private employer in Nevada, including, without limitation: The State of Nevada, an agency of Nevada, a political subdivision of Nevada, among other entities.
  • “Employment agency” means any person regularly undertaking with or without compensation to procure employees for an employer or to procure for employees opportunities to work for an employer.
  • “Wage or salary history” means the wages or salary paid to an applicant for employment by the current or former employer of the    The   term   includes, without   limitation, any compensation and benefits received by the applicant from his or her current or former employer.

The law may not apply to all employers. Exceptions include:

  • Any employer with respect to employment outside of Nevada
  • Any religious corporation, association, or society with respect to the employment of individuals of a particular religion to perform work connected with the carrying on of its religious activities

Employers that hire in the state of Nevada may want to review the pending law with trusted legal counsel before its enactment this fall. But even those that don’t do business in the state may wish to proceed with caution. Laws limiting inquiries into a candidate’s prior pay continue to pop up around the country – indicating a growing trend that HR professionals may want to watch.

Kentucky in the Lead to Protect Employers with New Reentry Law

You might have noticed a significant push across the country to remove a criminal record as a barrier to employment. Varying new laws have been introduced to  attempt to help the third of American adults that have a criminal record get work. These include ban the box, clean slate, and fair chance laws, to name a few. These laws generally aim to end the discrimination of anyone with a criminal record during the hiring process.

The state of Kentucky is off to the races with a new take. And this one also offers unique benefits to employers.

Kentucky on Track to Certify Employability

House Bill 497 was an immediate winner with the Kentucky Legislature. The bill passed unanimously in March 2021. Governor Andy Beshear later signed it on April 5, 2021. The bill introduces, among other things, a “Certificate of Employability” (COE) program for eligible individuals released from incarceration.

The new law will take effect on June 29, 2021. So how does it work for candidates and employers in the state?

Program Criteria for Participants

The new COE won’t be available for every person leaving incarceration. Those that are eligible will receive a COE from the Kentucky Department of Corrections (DOC). But to receive this certificate, participants must meet all of these requirements:

  • They must achieve one or both of the following:
    • Earn an educational credit, a program completion credit, or a work-for-time credit while incarcerated; or
    • Prior to incarceration, have earned a high school diploma, high school equivalency diploma, a college degree, certification from a vocational or technical educational program that the program was completed, or a diploma or degree from a correspondence postsecondary education program approved by the DOC.
  • They may not receive any major disciplinary violations in the year leading to their release.
  • They must receive a score or level of competence as determined by the DOC on a job skills assessment test.

On top of the COE program, the DOC will help prepare job resumes for incarcerated persons as part of a life skills program. The DOC is required to help incarcerated persons obtain records or documents to assist in preparing resumes.

Impacts on Kentucky Employers

 If you employ people in Kentucky, you might be wondering how this could impact you. The law does not require employers in the state to hire candidates with a criminal history. But the law does potentially reduce the risk for employers that chose to hire a person with a COE.

Employers that hire a candidate with a COE will have certain legal protections:

  • In a proceeding alleging negligence or other fault, a COE may be introduced as evidence of a person’s due care in hiring, retaining, licensing, leasing to, admitting to a school or program, or otherwise transacting business with an individual with a COE if the person knew of the COE at the time of the alleged negligence.
  • In a proceeding against an employer for negligent hiring, a COE may be a defense to the claim if the employer knew of the COE at the time of the alleged negligence.
    • However, employers cannot use a COE as a defense in a negligent hiring proceeding if the employer knew or should have known that the employee should not be hired for the position due to the nature of his or her history, including criminal history.

Employers may want to review the law with their legal team to understand how it may impact their hiring.

Beyond Washington’s Disclosures: Summary of Rights Requirements

Last month we highlighted background report disclosure requirements in the state of Washington.

As we previously discussed, part of the disclosure requirements for “investigative consumer reports,” under Washington law, is providing candidates with additional information. Among other things, a Washington investigative consumer report disclosure must include a written statement informing the candidate of the candidate’s right to request both: (i) A complete and accurate description of the nature and scope of the investigation upon submitting a written request to the employer within a reasonable period of time after receipt of the disclosure; and (ii) A written summary of the candidate’s rights under Washington state law.

Digging Deeper: Washington’s Summary of Rights

This state-specific summary of rights details the rights consumers have based on the  Washington Fair Credit Reporting Act (Washington FCRA). Washington’s summary requirements include:

  • A brief description of the Washington FCRA and all rights and remedies of consumers under the Washington FCRA.
  • An explanation of how the consumer may exercise the rights and remedies.
  • A list of all state agencies, including the attorney general’s office, responsible for enforcing the Washington FCRA. This should include the address and phone number of each agency.

Consumer Rights in Washington

This additional document may not be a surprise. Washington is pretty committed to consumer protections and rights. What are consumer rights and protections are included in Washington law?  The Washington FCRA contains a number of rights for consumers, including, but not limited to:

Employers may want to consult their legal advisor to determine if their Washington Summary of Rights aligns with the Washington FCRA. To help your drafting or review process, Verified Credentials provides a sample Washington Summary of Rights in our client Resource Library.

Continued Form I-9 Compliance Flexibility

The way employers hire has adapted to a more remote workforce. Some government agencies have also introduced temporary policies to assist employers in both promoting remote readiness and meeting COVID-19 restrictions.

It’s been over a year since the Department of Homeland Security (DHS) introduced temporary flexible Form I-9 compliance. Temporary I-9 compliance flexibility has given employers more leeway for certain employees working in remote settings.

For more information on the I-9 flexibility, check out our blog post highlighting some of the accommodations, available here.

Since its initial announcement in March, 2020, the DHS has extended this temporary policy. And we’ve been updating you along the way. On May 26, 2021, DHS, through U.S. Immigration and Customs Enforcement (ICE), announced a new extension.  The policy now extends until August 31, 2021. The summer-long extension is the longest since the pandemic began.

According to ICE, “The current extension includes guidance for employees hired on or after June. 1, 2021, and who work exclusively in a remote setting due to COVID-19-related precautions.” These employees are exempt from the physical inspection requirements associated with Form I-9 until they transition to non-remote work, on a regular, consistent, or predictable basis, or the extension of these flexibilities is terminated, whichever is earlier.

Verified Credentials continues to monitor DHS announcements regarding temporary Form I-9 compliance flexibility. For the latest from the DHS on Form I-9 and E-Verify policies, please check out I-9 Central.  Be sure to talk with your legal counsel before taking advantage of the I-9 compliance flexibility rules to make sure you stay compliant.

Washington’s Vast Approach to Background Check Disclosures

Those that have visited the Pacific Northwest know the beauty of the area. The region is known for lush forests, majestic mountains, and stunning waters. Washington alone is home to Olympic National Park, Mount Rainier, and the Columbia River Gorge. One could easily get lost in the wilderness of Washington.

But getting lost in Washington could mean more than just the physical area, especially for employers. The state ranks among the top in labor protection laws – meaning there is a lot for employers in the state to navigate. That includes laws around background checks.

Washington Fair Credit Reporting Act

Like California, New York, and others, Washington has state-specific laws regulating background reports. Chapter 19.182 of the Revised Code of Washington was enacted in 1993. Known as the (Washington) Fair Credit Reporting Act, the Washington state law covers state-specific requirements for background reports.

  1. Consumer Reports

Washington state law defines a “consumer report” (“background report”) as any information, with some exceptions, by a consumer reporting agency bearing on a candidate’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living used for:

  • Employment purposes
  • Establishing eligibility for credit or insurance to be used primarily for personal, family, or household purposes
  • Other reasons authorized by state law

 Washington Consumer Report Disclosure Requirements:

Employers in Washington must pay attention to state-specific disclosure requirements before obtaining a background report for employment purposes.

If obtaining a background report for employment purposes for someone that isn’t a current employee:

  • The employer must provide a clear and conspicuous disclosure, in writing, to the candidate that they may obtain a consumer report for purposes of considering the candidate for employment. Before getting the report, they must provide the disclosure to the candidate. Employers can include the disclosure in a written statement contained in employment application materials; or
  • The candidate must authorize the procurement of the report.

If getting a background report for employment purposes for a current employee, the employer must provide a written notice to the employee stating that purpose. This can happen at any time after the person became an employee.

  • According to Washington state law, “A written statement that consumer reports may be used for employment purposes that is contained in employee guidelines or manuals available to employees or included in written materials provided to employees constitutes written notice…”

Employers should note additional requirements if the background reports they obtain for employment purposes contain information on a candidate’s creditworthiness, credit standing, or credit capacity.  Employers cannot get a background report on a candidate with this credit information unless the information:

  • Is substantially job-related, and the employer discloses their reasons for the use of credit information to the candidate in writing; or
  • Is required by law
  1. Investigative Consumer Reports

Some employers may want more personal information about their candidates. This might include details about what the candidate is like as an employee, how they perform in certain work situations, or their strengths and weaknesses. For this information, employers may choose to take a more exploratory approach and obtain information about their candidates through personal interviews.

If your background report contains information obtained through personal interviews, you may be obtaining an “investigative consumer report.”  Washington state law defines an investigative consumer report as, with some exceptions, a background report that contains information on a candidate’s character, general reputation, personal characteristics, or mode of living obtained through personal interviews with neighbors, friends, associates, or acquaintances of the candidate.

Washington Investigative Consumer Report Disclosure Requirements:

Washington law requires employers to provide candidates with a unique written disclosure for investigative consumer reports. An employer cannot obtain an investigative consumer report unless either:

  • They disclose clearly and accurately to the candidate that they may use an investigative consumer report, including information as to the candidate’s character, general reputation, personal characteristics, and mode of living, and the disclosure:
    • Is made in writing and either mailed or delivered to the candidate within three days after requesting the investigative consumer report; and
    • Includes a written statement informing the candidate of the candidate’s right to request both: (i) A complete and accurate description of the nature and scope of the investigation upon submitting a written request to the employer within a reasonable period after receipt of the disclosure; and (ii) A written summary of the candidate’s rights under Washington state law.
  • They will use the report for employment purposes for which the candidate has not specifically applied.

Wondering where to start? We offer sample compliance documents to help. You can review our sample Washington disclosures when creating your own. Simply log into your Verified Credentials Employee® account and go to the Resource Library. Download the “Washington Consumer Report Disclosure” and “Washington Investigative Consumer Report Disclosure” samples to get started.

The state of Washington established these requirements to protect candidates. Employers may want to explore the vast set of rules they face further. Those that hire in the state should work with their legal counsel to learn how these requirements apply to their screening program.

Philadelphia Inches Closer to Certain Drug Testing Limits

There has been a rise in legalizing medicinal and recreational cannabis across the United States. Some areas have expunged records related to marijuana. Others have decriminalized the use of marijuana. It seems attitudes about the drug have changed in the country. Maybe you’ve thought about how this impacts how you approach screening marijuana use for employment purposes.

We’ve been keeping tabs on the topic. Last year we talked about how Virginia passed a law that bans asking about certain marijuana-related offenses. This month we are looking at changes coming to Philadelphia.

Philadelphia’s New Law

Recent legislation in Philadelphia will make it an unlawful employment practice for an employer, labor organization, or employment agency to require a prospective employee to submit to testing for the presence of marijuana as a condition of employment.

There are certain exceptions. This restriction will not apply to candidates applying for jobs in certain professions, including:

  • Law enforcement positions
  • Roles requiring a commercial driver’s license
  • Any position requiring the supervision or care of children, medical patients, disabled, or other vulnerable people
  • Any job where the employee could significantly impact the health and safety of others determined by the city and identified in future regulations.

This restriction will also not apply to drug testing required by:

  • Federal or state law, regulation, or order that requires drug testing of applicants for safety or security purposes
  • Contracts between the federal government and employers or grants awarded by the federal government that require drug testing of applicants as a condition of receiving the contract or grant
  • Valid collective bargaining agreements that specifically address the pre-employment drug testing of applicants

What’s the Timeline?

Philadelphia’s City Council passed the proposed law on April 22, 2021. Mayor Jim Kenney signed the law on April 28, 2021. The law will become effective on January 1, 2022.

Verified Credentials will continue to monitor this legislation. If you think this law might impact your drug testing program, consider speaking with your legal advisor.

Another Disclosure Violation Case

We’ve highlighted many cases of companies accused of violating the Fair Credit Reporting Act (FCRA). So many of these situations fall back on disclosure forms.  We have previously discussed cases involving FCRA disclosures, such as Gilberg v. California Check Cashing Stores, LLC. Each case gives us a better understanding of how the courts interpret the FCRA. Employers may want to take note of these decisions to get a clearer picture of their requirements.

Another company is facing potential financial loss after the US District Court for the Northern District of California found, in Arnold v. DMG Mori USA, Inc., it violated the FCRA. In a recent decision granting summary judgment to the plaintiffs in this class-action lawsuit, the court found that DMG Mori USA, Inc. (DMG), a cutting machine tools maker, didn’t follow the FCRA disclosure requirements.

DMG’s Misstep

Plaintiffs in this class action case included certain U.S.-based DMG applicants. DMG obtained background reports on them for employment purposes from April 19, 2016, and after. During the application process, DMG gave them disclosure forms that outlined their rights under the FCRA. The problem? DMG’s disclosure also included their rights under state laws in:

  • California
  • Maine
  • Minnesota
  • New York
  • Oklahoma
  • Oregon
  • Washington

Plaintiffs claimed this directly violated the FCRA’s requirement for a standalone disclosure, i.e., a clear and conspicuous disclosure that a consumer report may be obtained for employment purposes, in a document that consists only of the disclosure.

The court agreed, stating “the undisputed facts amply establish that DMG violated the FCRA.  DMG provided plaintiffs with a standardized disclosure and authorization form, which plaintiffs signed.  In addition to the disclosures required by the FCRA, the form contained statements about the laws of several states.  The Ninth Circuit interprets the FCRA ‘as mandating that a disclosure form contain nothing more than the disclosure itself, without any extraneous information.”

As further background on its decision, the court pointed to precedent set by the Gilberg decision. It stated that “forms such as those used by DMG that contain ‘extraneous information relating to various state disclosure requirements in that disclosure’ violate” the FCRA.

DMG Fails a Redo

Court documents show that after the Gilberg case, DMG removed language about state laws from its disclosure. But there were still issues with the updated document. DMG’s disclosure included extra language about the applicants’ rights. It stated they have “the right, upon written request made within a reasonable time, to request whether a consumer report has been run about you and to request a copy of your report.”

While it appears DMG intended to help applicants with this, the court again pointed to previous cases. In the past, the Ninth Circuit decided that similar language violates the FCRA’s standalone disclosure requirement.

On top of the court’s findings on the violations, it found DMG acted willfully. This means that the company knowingly violated the FCRA. DMG showed “reckless disregard” for the law when it violated one of its clear requirements – the standalone disclosure requirement.

Penalties Coming

The court issued a summary judgment in favor of the plaintiffs on March 31, 2021. Damages in this case are pending a settlement conference. However, the court noted that potential damages under the FCRA range from $100 to $1,000 for each class member.

This case is a good reminder to employers to consult legal teams when developing and updating background check disclosures. Even if you feel like you know the ins-and-outs of what’s required, there is still room for misunderstanding.

 

Illinois Human Rights Act Updates Are Now Law

With the change of seasons we are seeing changes to some laws. In February we talked about Illinois Senate Bill 1480 and about potential changes coming to the Illinois Human Rights Act. The changes are now official. The bill was signed into law by Governor J.B. Pritzker on March 23, 2021 and became effective that day.

What’s Changed Now that the Bill is Signed?

The Illinois legislature passed Senate Bill 1480 on January 13, 2021. The bill amends the Illinois Human Rights Act. Among other things, SB1480, unless otherwise authorized by law, makes it a “civil rights violation for any employer, employment agency or labor organization to use a conviction record… as a basis to refuse to hire, to segregate, or to act with respect to recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or terms, privileges or conditions of employment (whether “disqualification” or “adverse action”)…”, with some exceptions.  A “conviction record” includes information that a person has been convicted of a felony, misdemeanor or other criminal offense, placed on probation, fined, imprisoned, or paroled.

How Does this Impact Employers in Illinois?

This law may have an impact on how criminal conviction records can be used for employment decisions in Illinois.  For more information on the new restrictions, you may want to review our recent discussion on Senate Bill 1480.

You may also want to talk to your legal advisor to understand how this law and others could apply to you.

Costly Settlement for Alleged FCRA Violation

The Fair Credit Reporting Act (FCRA) outlines the fundamental federal requirements for employment background checks done by consumer reporting agencies. No company wants to face the consequences of a violation. But the truth is, sometimes it happens. In those cases, employers may face litigation.

Continued Confusion Over FCRA Disclosures

The requirements of the FCRA can be difficult to navigate.  One of the most confusing, and litigated, requirements for employers under the FCRA are the disclosure and authorization requirements, as we have previously discussed.  We have seen litigation surrounding FCRA-required disclosures in  Gilberg v. California Check Cashing Stores, LLC and Walker v. Fred Meyer, Inc. In February, another company settled after an accusation of similar violations.

The Complaint Against Quantum Global Technologies, LLC

Quantum Global Technologies, a cleaning contractor based in Pennsylvania, found themselves in a tough spot. A former employee filed a class action complaint alleging the company violated the FCRA based on a disclosure form that Quantum used that reportedly included an extraneous liability waiver.

The complaint accused Quantum of requiring all prospective employees to sign a standard form authorizing a third-party background check. Because Quantum’s form included a liability waiver, in addition to a disclosure concerning a consumer report, the class action complaint alleges that Quantum violated the FCRA’s stand-alone disclosure requirement and, as a result, Quantum never received proper authorizations for any reports it obtained using its standard form.  The named plaintiff also claimed that he was confused by Quantum’s standard disclosure and authorization form and did not understand that Quantum would be requesting a consumer report as defined by the FCRA.

Quantum Accepts Penalties

In this case, Quantum and its former employee ended up settling. On February 16, 2021 the settlement was approved by a federal judge. Quantum will pay $174,980 as a class settlement for the alleged violations.

The amount that Quantum has agreed to pay is extensive, but case settlements can certainly exceed this amount. To avoid potential issues, employers should work with their legal advisor to ensure their disclosures meet federal, state, and local requirements.

Vermont Blocks Wide Use of Credit Checks in Employment Decisions

Some states and cities have introduced and passed bills to place restrictions on using credit checks for employment purposes. Generally, these laws restrict when or how employers use credit history for most employment decisions. These laws could have an impact on the way you conduct background screening. They could also require a cautious approach as to when credit information may be considered.

We’ve covered laws that restrict the use of credit history for employment purposes in Rhode Island, Philadelphia, and New York City. So how does Vermont restrict the use of credit information in the hiring process? Let’s look at what Vermont’s credit report law has to say.

Vermont Taps Multiple Definitions of Credit Information

Vermont defines credit information as more than just reports from credit bureaus. In fact, the state restricts use on two types of data.

1. Credit report

Vermont state law defines a credit report as: “Any written, oral, or other communication of any information by a credit reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living, including an investigative credit report.”

But Vermont also specifies what a credit report is not. A credit report is not:

  • A report containing information solely as to transactions or experiences between the consumer and the person making the report.
  • An authorization or approval of a specific extension of credit directly or indirectly by the issuer of a credit card or similar device.

2. Credit history

Vermont defines credit history as details that go beyond a credit report. Credit history includes information collected from a third party, whether or not in a credit report, that reflects on an individual’s prior or current:

  • Certain borrowing or repaying behavior.
  • Financial condition or ability to meet financial obligations. This includes information on debts owed, payment history, savings or checking account balances, or savings or checking account numbers.

When Vermont Bans Credit History Checks

With some exceptions, employers in Vermont can’t:

  • Use a candidate’s credit history or credit report to make employment decisions. This includes failing to hire or recruit, discharge, or otherwise discriminate against an individual with respect to employment, compensation, or a term, condition or privilege of employment because of the individual’s credit report or credit history.
  • Inquire about a candidate’s credit report or credit history.

There are some exceptions to this. Employers are exempt from the credit report and credit history restrictions if:

  • Credit report or credit history information is required by state or federal law or regulation
  • The position involves access to confidential financial information
  • The employer is a financial institution or credit union, as those terms are defined by state law
  • The role is for a law enforcement, emergency medical personnel, or firefighting position, as those terms are defined by state law
  • The position requires financial fiduciary responsibility to the employer or client of the employer
  • The employer can show credit information is a valid and reliable predictor of employee performance in the specific position of employment
  • The position involves access to an employer’s payroll information

So you meet one of the criteria? Great! Keep in mind that even with an applicable reason, employers can’t use credit history or credit reports as the sole factor for decisions regarding employment, compensation, or a term, condition or privilege of employment.

Vermont’s Unique Credit-Related Disclosure

Employers that may get credit reports or credit history may still want to proceed cautiously. The state places additional restrictions on employers when obtaining credit reports or credit history. In Vermont, employers seeking credit reports or credit history must get written consent from the candidate each time. Employers must also disclose, in writing, the reason the employer is accessing the information. In addition to the written disclosure, the employer must:

  • If adverse action is taken based upon credit history or a credit report, provide the reason(s) in writing for taking the adverse action
  • Allow the candidate to contest the accuracy of information
  • Ensure the costs of the credit check aren’t passed on to the candidate
  • Keep all credit information confidential
  • Return the credit history or credit report to the candidate, or destroy the credit information in a secure manner, if the candidate is not selected or no longer employed

Verified Credentials provides clients with state-specific sample disclosure documents in their Resource Library. The library includes a sample Vermont Credit Report Disclosure.  If you’d like to see a sample to reference as you create your own document, log into your Resource Library.

If you hire in the state of Vermont, you may want to work with your trusted legal counsel to understand how this law applies to you. Beyond Vermont, laws may vary from state to state, and city to city. Employers nationwide should be mindful of the varying requirements and bans related to credit checks.

Fair Chance Violation Complaint Delivered to FedEx in New York City

The consequences of violating employment laws can be significant. Employers can face litigation, leading to big penalties. Macy’s recently experienced this in New York City. Now, FedEx Ground Package System, Inc. (“FedEx”) is accused, in a class action lawsuit, of violating New York City’s Human Rights Law (NYCHRL).

New York City’s Unique Package of Laws

As we previously discussed, the NYCHRL includes the New York City Fair Chance Act (FCA). The FCA places restrictions on how employers can use certain criminal history information and creates obligations and responsibilities for employers in NYC.  We also recently covered changes to the FCA that take effect at the end of July 2021.

Not On Time: FedEx Accused of Screening a Candidate Too Early

A class action complaint was filed on March 12, 2021 claiming FedEx violated the NYCHR, specifically the FCA (Franklin v. FedEx Ground Package System, Inc.).

The complaint states that the Plaintiff completed an online application with FedEx for a position in New York City.  The application process included the Plaintiff giving his consent to a criminal background check and providing FedEx with information it would need to conduct one.  In early December 2020, Plaintiff received a letter confirming that FedEx had been authorized to obtain a criminal background report and provided Plaintiff with a copy of the report.  The letter instructed the Plaintiff to report any inaccuracies to the consumer reporting agency and warned the Plaintiff: “If accurate, the information contained in the Report in whole or in part will significantly affect our decision regarding your potential for employment with FedEx Ground.  We are reviewing your application in light of the attached Report.”

The complaint claims that FedEx violated the FCA when it obtained criminal background reports before extending conditional offers of employment to both the Plaintiff and other applicants.  According to the complaint, FedEx told Plaintiff that it would be reviewing his application in light of the report, “but this is precisely what the [FCA] prohibits it from doing (before a conditional offer of employment is extended)”.  The complaint also alleges that FedEx violated the [FCA] when it stated that the content of the report would significantly influence its decision on whether or not to hire Plaintiff, “because the FCA is clear that a criminal background may influence a hiring decision only in a limited number of situations…”

The lawsuit alleges FedEx violated NYCHRL when the company:

  • Declared it would conduct background checks before making conditional offers of employment.
  • Conducted background checks before making conditional offers of employment.
  • Denied employment based on criminal conviction histories.

The case is still ongoing and the claims against FedEx remain allegations. We will continue to monitor the case and provide updates when available.

Like the Macy’s case, the accusations against FedEx show that even large corporations should stay up-to-date on consumer reporting laws. Employers should work with their trusted legal counsel to make sure they are following the laws that apply to them.

Philadelphia Boosts Protections for Credit History Used in Employment Decisions

A consumer’s credit history is highly protected. What shows up affects consumers seeking jobs, housing, vehicles and more. Some laws promote accuracy, fairness, and the privacy of information with credit bureaus. Several federal, state and local laws limit how credit reports are used for employment decisions too.

Unlawful credit checks may cause potential harm and undue limitations to job seekers. One of the most populous U.S. cities, Philadelphia, recently updated laws regarding credit history use for employment purposes.

On January 20, 2021, Philadelphia Mayor Jim Kenney signed three bills into law. One amends the Philadelphia Fair Criminal Record Screening Standards law (FCRSS) and the others update the city’s law regarding credit history use in employment. The city aims to protect those seeking to secure employment. Let’s review what has changed for credit history use in employment.

Credit History Restrictions for Job Seekers

Philadelphia’s existing law places restrictions on the use of credit information for employment purposes.  Section 9-1130 of the Philadelphia Code contains such current credit history restrictions. With limited exceptions, the law makes it an unlawful discriminatory practice for an employer within the city to get or use credit information regarding a candidate in connection with:

  • Hiring
  • Discharge
  • Tenure
  • Promotion
  • Discipline
  • Consideration of any other term, condition, or privilege of employment

Addressing Cracks in Credit History Restrictions

The law defined in Section 9-1130 has been amended by two recent bills. Let’s take a look at those changes:

  1. Taking Account of Previous Exemptions

Credit history restrictions now apply to law enforcement agencies and financial institutions. Under Bill 200413, they are no longer exempt from the credit history ban, unless another exemption for them under the law exists.

  1. Reiterating Federal Adverse Action Requirements

Under the Fair Credit Reporting Act, taking adverse action based on a candidate’s credit history contained in a consumer report requires notices be given to the candidate before the adverse action is taken.  Philadelphia is taking an extra step to make sure those steps are followed. Bill 200614 amends the City’s law to double down on the FCRA. An employer that intends to take adverse action based in whole or in part on credit information is required to, before taking adverse action against a candidate and pursuant to 15 U.S.C. § 1681b(b)(3):

  • Provide them a written copy of the information used for the employment decision
  • Give them an opportunity to obtain and dispute the information

The amendments went into effect on March 21, 2021.

Not sure how to use credit history for employment decisions in Philadelphia? Just like criminal history, this consumer information may be subject to anti-discrimination laws. Better definitions of how and when credit reports may be used for hiring decisions in Philadelphia help guide employers. Need more information on how the amendments to Philadelphia’s law might impact you? Please talk with a trusted legal advisor.

 

Small but Mighty: Rhode Island’s Credit Check Laws

Rhode Island may be the smallest state, but some of its state laws align with some of the nation’s biggest. States like California restrict the use of certain credit information for employment purposes. Some large cities have their own restrictions, like New York City. And as small as it is, the Ocean State has its own laws in place, too. If you do business there, you may have restrictions on using certain “credit report” information when hiring.

How Rhode Island Defines Credit Report

What makes a credit report a credit report varies from state-to-state. Rhode Island defines a “credit report” as any information from a credit bureau about a consumer’s creditworthiness, standing, or capacity used as a factor to determine eligibility for:

  • Credit or insurance purposes;
  • Employment purposes; or
  • Other purposes authorized under the Fair Credit Reporting Act.

Rhode Island’s Disclosure Requirements

So, does Rhode Island have specific employer disclosure requirements regarding applicants who live or work in Rhode Island, before a credit report may be obtained regarding them, as well? If you guessed yes, you got it.

According to state law, anyone who requests a credit report, as defined by Rhode Island law, related to an application for employment must first inform the applicant that such credit report may be requested.

Rhode Island’s requirements go further by addressing adverse action related to such credit reports. If an employer takes adverse action against an applicant based on information in the credit report, it must advise the individual it’s taking adverse action against of this and provide them with the credit bureau’s name and address.

Verified Credentials provides clients with state-specific sample disclosure documents in their Resource Library. The library includes a sample Rhode Island Credit Report Disclosure.  If you’d like to see a sample to reference as you create your own document, log into your Resource Library.

As always, you should discuss your state-specific disclosures with trusted legal counsel to make sure you stay in compliance with applicable laws.

Amendments Update Philly’s Ban the Box Law

The City of Brotherly Love is home to many historic sites. From the Liberty Bell to those famous stairs from the movie Rocky, the city sure is a staple in the history books. In 2011, Philadelphia made history with progressive hiring laws. That year they joined the list of cities with laws around criminal history inquiries during the hiring process.

The Fair Criminal Record Screening Standards (FCRSS) is Philadelphia’s version of a ban the box law. It places restrictions on the use of criminal history for certain employment purposes. The city passed amendments to the law in 2016, expanding its language.

Even with love for history, the city is open to changes and updates to their laws. This year brings more updates for the FCRSS. On January 20, 2021, Philadelphia Mayor, Jim Kenney, signed three bills into law.  Two of the bills update the city’s law regarding credit history use in employment. The other, Bill 200479, amends the local ban the box law further. The amended law will go into effect on April 1, 2021. Let’s break down key areas the amendments address.

Updated Definitions Expand Impact

In the past, the FCRSS had not defined what it meant to be an employee and had a narrow definition of what it meant to be a private employer. New definitions and expanded definitions for these will increase the number of employers that must follow the FCRSS and the “employees” that are protected by it.

 An “employee” is now defined as any person employed or permitted to work for a private employer within the city. The definition includes independent contractors, transportation network company drivers, rideshare drivers, and other gig economy workers.

A “private employer” was defined as any person, company, corporation, labor group, or association that employs any person within the city.  It included job placement and referral agencies, other employment agencies.  It has now been expanded to include any third-party person or entity that facilitates the relationship of work for pay, as full-time or part-time employees or independent contractors.

New Protections for Current Employees

FCRSS protections had applied only to new job applicants, leaving current employees with no coverage. The new amendments expand the requirements of the FCRSS to current employees, as well.

Pending Criminal Charges

The amendments indicate when inquiries into pending criminal charges can be made and allow adverse action to be taken based on pending criminal charges in certain circumstances.  A pending criminal charge is an existing accusation that a person has committed a crime which has not yet resulted in a final disposition.

If an employer has reasonably reliable information that a pending charge has been lodged against an employee, and can show the pending charge relates to the job duties, they can ask the employee about it. In these situations, the employer can require that the employee respond.  Employers may also require employees to report a pending criminal charge, provided that the employer does so pursuant to a written policy detailing what offenses are reportable.

The employer cannot take adverse action against the employee based on a pending criminal charge unless the offense bears such a relationship to the job duties that the employer can reasonably conclude that continued employment presents an unacceptable risk to the business and people and that exclusion of the employee is compelled by business necessity.

Criminal Inquiries Required by Law

The FCRSS previously prohibited inquiries into any criminal conviction before a conditional offer was made.  The amendments prohibit inquiries into any criminal conviction during the employment process, which is defined as the assessment of an applicant’s suitability for employment, as well as consideration of any aspects of continued employment, such as promotions, raises, or termination decision-making, unless required by federal or state law.  If such and inquiry is required by federal or state law, it can only be made after a conditional offer of employment.

Changes to Possible Penalties

Violations of the FCRSS can result in different penalties, including a lawsuit from the candidate.  Remedies in a lawsuit could include attorneys’ fees, damages for loss of employment, and more.

The FCRSS previously allowed a successful complainant to collect punitive damages.  The amendments to the FCRSS remove punitive damages as a remedy, but now allow liquidated damages, equal to the payment of the maximum allowable salary for the job for a period of one month, with a cap of $5,000.

Even if the FCRSS didn’t apply to you before, the amendments might impact you. Talk with a trusted legal advisor to learn if you’re affected.

 

Changes Ahead for the NYC Fair Chance Act

Last month we discussed New York City’s Fair Chance Act (FCA). It places restrictions on how NYC employers can use certain criminal history information. The FCA addresses employment ads, asking job applicants about criminal history, and adverse action restrictions.

On January 10, 2021, NYC enacted several amendments to the FCA. The updates expand the scope of NYC’s ban the box law and will go into effect this summer.

Establishing Fair Chance Factors

The amendments establish NYC FCA-specific “relevant fair chance factors” that an employer is required to consider in certain circumstances.

For arrests or criminal accusations pending at the time of application for employment, and arrests or convictions that occurred during employment, these factors include:

  • The city’s policy to overcome stigma toward and unnecessary exclusion of persons with criminal justice involvement.
  • The specific duties and responsibilities related to the job.
  • If the criminal history impacts the applicant or employee’s fitness or ability to perform any of the job duties or responsibilities.
  • Whether the applicant or employee was 25 years of age or younger at the time of a criminal offense.
  • The seriousness of the offense.
  • The legitimate interest of the employer in protecting property and the safety and welfare of others.
  • Any additional information about the applicant or employee’s rehabilitation or good conduct, including a history of good performance and conduct on the job or in the community.

For arrests and convictions that occurred before employment, other than arrests or criminal accusations pending at the time of the employment application, employers should consider state law factors.

Considering Different Records

The new amendments to the FCA aim to reduce uncertainty about what records employers may consider. This more granular breakout of criminal history helps employers know what can and cannot be considered.

For employment purposes, employers cannot make any inquiry about, deny employment to an applicant, or take adverse action against any employee based on an arrest of or criminal accusation against the applicant or employee when the inquiry, employment denial or adverse action is in violation of state law.

In addition to this restriction, employers, with certain exceptions, cannot inquire about, deny employment or take adverse action based on:

  • Convictions of violations as defined by state law
  • Convictions of non-criminal offenses, as defined by a law of another state
  • Arrests or criminal accusations that resulted in a violation or non-criminal offense conviction as outlined above

Changes Limiting Adverse Action

The updates to NYC’s FCA expand restrictions on when employers can take adverse action against applicants and employees.

With some exceptions, the amendments make it illegal for an employer to take adverse action by reason of either an applicant or employee’s pending arrests or criminal accusations or criminal convictions an employee obtains during employment, or by finding a lack of “good moral character” due to an applicant’s or employee’s pending arrests or criminal accusations or convictions an employee obtains during employment, unless, after considering the relevant fair chance factors:

  • It’s determined that there is a direct relationship between the alleged wrongdoing or conviction and the employment sought or held.
  • It’s determined the applicant or employee would create an unreasonable risk to property or the safety or welfare of others.

An employer can take adverse action if the applicant or employee intentionally misrepresented their arrest or conviction history, provided that the adverse action is not based on information that the employee is not required to divulge based on city or state law. As to such adverse action, the employer must provide the applicant or employee with copies of documents the employer used to determine that there was an intentional misrepresentation and allow a reasonable time to respond.

Fair Chance Process Expansion

The new amendments also expand the “Fair Chance Process.” This formal process outlines the steps an employer must take before taking adverse action. Previously, the process only applied to new job applicants. Employers must now engage in the Fair Chance Process when taking adverse action against both new applicants and current employees.

During the Fair Chance Process, employers, with certain exceptions, must now request information relating to the relevant fair chance factors from the applicant or employee.

On top of those changes, employers must now allow job applicants a minimum of five business days to respond before they take adverse action.  As before, the employer must hold the position open for the applicant during the response period.

The amendments to the current Act take effect on July 29, 2021.  Employers may wish to discuss the NYC Fair Chance Act amendments with their legal counsel to make sure they stay in compliance with the law.

Understanding New York City’s Fair Chance Act

Several “Fair Chance” or “ban the box” initiatives nationwide have been introduced or updated over the past year. Take, for example, the new Federal Fair Chance Act and changes to California’s Fair Chance Act. Adhering to local, state, and federal Fair Chance and ban the box laws can at times feel like swimming through glue. You want to prevent fragmented stop-go hiring decisions. So, getting a clear grasp of these guardrails for fair and equitable hiring decisions can help.

Like others throughout the US, New York City has its own version of a Fair Chance Act (FCA).  In a city of skyscrapers, NYC’s FCA is just as multistoried at New York City itself.  Let’s make sense of the many levels of the current FCA law.

Since 2015, the NYC FCA has placed restrictions on how employers can use certain criminal history information. Read the full text of the current NYC FCA here (see subsections 10, 11, and 11-a of section 8-107).

The NYC FCA creates obligations and responsibilities for employers in New York City.  Keep reading to learn about more about the requirements of the FCA.

NYC FCA Bans Some Language in Employment Ads

On job posting for open positions, you may need to watch what you say.   What are employers banned from saying? The FCA states that employers can’t, with certain exceptions:

  • Declare, print or circulate any solicitation, advertisement or publication or cause such, which expresses any limitation or specification in employment based on a person’s arrest or criminal conviction.
  • Represent that any employment or position, that is otherwise available to a person, is unavailable due to a person’s arrest or criminal conviction.

FCA Imposes Restrictions on Using, or Asking About, Certain Criminal History Information

With certain exceptions, the FCA makes it an unlawful discriminatory practice for employers to:

  • Deny employment to an applicant or take adverse action against an employee by reason of the individual’s conviction of one or more criminal offenses, or by finding a lack of “good moral character” due to criminal convictions, when the denial or adverse action would be in violation of state law.[1]
  • Deny employment to an applicant or take adverse action against an employee, or inquire of an applicant or employee about any criminal accusation or arrest when such denial, adverse action or inquiry would be in violation of state law.1
  • Make any inquiry or statement to an applicant related to a pending arrest or criminal conviction record until after extending a conditional offer of employment.
    • “Any statement” is a statement communicated to the applicant for the purpose of obtaining their criminal background information regarding an arrest record, a conviction record, or a criminal background check.
    • “Any inquiry” is any question directed to an applicant or any searches of publicly available records or consumer reports that are conducted for the purpose of obtaining an applicant’s criminal background information.

Special Pre-Adverse and Adverse Action Requirements for Certain Job Applicants in NYC

 If the restrictions outlined above are applicable, after extending a conditional offer of employment to an applicant, an employer can inquire about an applicant’s arrest or conviction record.  If such employer decides to take adverse action against the applicant based on their arrest or conviction record, they have to engage in NYC’s unique “Fair Chance Process.”  Here’s what needs to happen before taking adverse action. An employer must:

  • Provide a written copy of the arrest or conviction record inquiry in a manner determined by the NYC Commission on Human Rights (NYCCHR).
  • Perform an analysis of the applicant under Article 23-a of the New York Correction Law. They must provide a written copy of the analysis to the applicant in a manner determined by the NYCCHR.
    • They must include the documents that formed the basis for the adverse action and their reasons for taking such action.
  • After giving the applicant a copy of the inquiry and analysis, allow them at least three business days to respond. The covered employer must hold the position open for the applicant during this time.

The NYCCHR provides additional guidance on the FCA, available here.

The city recently enacted several amendments to the FCA that take effect on July 29, 2021.  Check back next month for the details on these amendments. Employers may wish to discuss the NYC Fair Chance Act with their legal counsel. Legal guidance may help you make sure you stay in compliance with the law.

[1] These requirements apply to all employers that may be required to comply with the NYC FCA.  All other provisions do not apply to employers that have fewer than four persons in their employ at all times during the period beginning twelve months before the start of an unlawful discriminatory practice and continuing through the end of the unlawful discriminatory practice.  

Oklahoma! Where the Disclosures Are Written Plain

Some states have their own background report disclosure laws.  Our virtual road trip throughout the United States has introduced us to many states that require specific disclosures, beyond FCRA disclosures, before screening applicants or employees when using a consumer reporting agency like Verified Credentials.  Our stops have outlined disclosure requirements in California, Minnesota, New York, and more.

This month’s stop is in the Sooner State.  A “consumer report” (background report) under Oklahoma law has the same meaning as under the FCRA.  If you obtain such a background report for employment purposes on someone that lives or works in Oklahoma, you may want to keep Oklahoma law in mind as follows:

An Oklahoma background report disclosure must:

  • Be in writing;
  • Be provided to the applicant or employee before the background report is obtained;
  • Inform the applicant or employee that a background report will be used for employment purposes; and
  • Include a box the applicant or employee can check to get a copy of the report.

Employers should take note if their applicant or employee “checks the box” to get a copy of their background report.  If the box is checked, the employer must ask its background screener to provide a copy of the background report to the applicant or employee when it asks its background screener for its copy of the background report.  The background report sent to the applicant or employee is always provided free of charge.

Do you want to see a sample Oklahoma disclosure as you draft your own?  We offer sample compliance documents to help you, including a sample Oklahoma disclosure.  Simply log into your Verified Credentials Employee® account and go to the Resource Library. Download the “Oklahoma Consumer Report Disclosure” sample to get started.

As always, be sure to check with your legal counsel to make sure you stay compliant with state-specific laws.

Illinois Proposes Changes to How Employers Use Certain Criminal History

By now, you are probably aware of the importance of checking up on state and local laws if you obtain background reports on your applicants and employees. We recently covered a court case in Wisconsin that highlights what could happen if an employer considers criminal history when making an employment decision without considering certain state and local laws. So, you probably want to learn about the latest pending revisions to those state and local laws that could have an impact on your background screening strategy. Employers may want to take note of pending legislation in Illinois.

Potential Changes to the Illinois Human Rights Act

On January 13, 2021 the Illinois legislature passed Senate Bill 1480 (SB1480).  This bill is not yet law. But if enacted, it will change how criminal conviction history can be used for employment decisions in Illinois.

The bill amends the Illinois Human Rights Act. Among other things, SB1480 would, unless otherwise authorized by law, make it a “civil rights violation for any employer, employment agency or labor organization to use a conviction record… as a basis to refuse to hire, to segregate, or to act with respect to recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or terms, privileges or conditions of employment (whether “disqualification” or “adverse action”)…”, with some exceptions.  A “conviction record” includes information that a person has been convicted of a felony, misdemeanor or other criminal offense, placed on probation, fined, imprisoned, or paroled.

When Conviction Records May Be Considered

You may still consider an applicant or employee’s conviction record for employment decisions, but only if:

  • The granting or continuation of the employment would involve an unreasonable risk to property or to the safety or welfare of specific individuals or the general public; or
  • There is a substantial relationship between one or more of the previous criminal offenses and the employment sought or held.
    • In order for a “substantial relationship” to exist, there must be a consideration of whether the employment position offers the opportunity for the same or a similar offense to occur and whether the circumstances leading to the conduct for which the person was convicted will recur in the employment position.

In determining whether one of the two exceptions apply, you must consider:

  • The length of time since the conviction;
  • The number of convictions that appear on the conviction record;
  • The nature and severity of the conviction and its relationship to the safety and security of others;
  • The facts or circumstances surrounding the conviction;
  • The age of the applicant or employee at the time of the conviction; and
  • Evidence of rehabilitation efforts.

Using a Conviction Record for Employment Decisions

If, after considering all mitigating factors, you make a preliminary decision to use an exception, you must provide the applicant or employee with a written notification of the preliminary decision.  The notification must contain:

  • Notice of the disqualifying conviction(s) that is/are the basis for the preliminary decision and the reasoning for the disqualification;
  • A copy of the conviction history report, if any; and
  • An explanation of their right to respond to the notice before the decision becomes final.
    • The explanation must inform them that their response may include submission of evidence challenging the accuracy of the conviction record or evidence of mitigation, such as rehabilitation.

Now you wait. After providing a written notice of the preliminary decision, you must wait at least five (5) business days for the applicant or employee to respond before making a final decision.

If you make a final decision to take adverse action based solely or in part on an applicant or employee’s conviction record, you must notify the applicant or employee in writing of the following:

  • Notice of the disqualifying conviction(s) that is/are the basis for the final decision and your reasoning for the disqualification;
  • Any existing procedure you have for the applicant or employee to challenge the decision or request reconsideration; and
  • The right of the applicant or employee to file a charge with the Illinois Department of Human Rights.

SB1480 is not yet law.  Verified Credentials will continue to monitor this legislation. Watch for updates as they become available.

This bill could have an impact on how criminal conviction records can be used for employment decisions in Illinois.  You may want to discuss this bill with your legal counsel to determine how it could impact you.

New York City Restricts Use of Candidate Credit History

Do your background reports contain credit information about your candidates?  Some states, and cities, restrict the use of certain credit information for employment purposes.

In New York City, the hub for the financial industry, you may expect the same. If you’re near Wall Street, you might think that looking at job candidates’ financial history would be a no-brainer. In many cases, NYC prohibits the use of consumer credit history for employment purposes.

NYC Restrictions

The Stop Credit Discrimination in Employment Act (SCDEA) is a part of the New York City Human Rights Law (NYCHRL). It places restrictions on the use of consumer credit history information.

In NYC, consumer credit history is “an individual’s credit worthiness, credit standing, credit capacity, or payment history, as indicated by:

  • A consumer credit report
  • Credit score
  • Information an employer gets directly from the individual regarding:
    • Details about credit accounts including the number of accounts, late or missed payments, charged-off debts, items in collections, credit limit, or prior credit inquiries; or
    • Bankruptcies, judgments, or liens

City law generally makes it an unlawful discriminatory practice to request or use an applicant or employee’s consumer credit history for employment purposes.  It is also illegal to discriminate against an applicant or employee regarding hiring, compensation, or the terms, conditions, or privileges of employment based on the applicant or employee’s consumer credit history.

Exceptions to the Law

There are limited exemptions to the SCDEA’s prohibition on the use of consumer credit history.  Consumer credit history can be used for employment purposes if:

  • The employer is required to use it by state or federal law or regulation, or by a self-regulatory organization as defined by federal law
  • The applicant or employee is applying for or is employed in:
    • A police or peace officer position, as defined by NYC law, or a position with law enforcement or investigative function with the NYC Department of Investigation (DOI);
    • A position that is subject to a DOI background investigation provided that the job is both appointed and requires a high degree of public trust;
    • A position that requires an employee to be bonded under city, state, or federal law;
    • A position that requires an employee to possess security clearance under federal or state law;
    • A non-clerical position having regular access to trade secrets, intelligence information, or national security information;
    • A position having signatory authority over third-party funds or assets valued at $10,000 or more;
    • A position that has a fiduciary responsibility to the employer with authority to enter financial agreements valued at $10,000 or more on behalf of the employer
    • A position with regular duties that allow the employee to modify digital security systems established to prevent the unauthorized use of the employer’s or client’s networks or databases.

Enforcement of Credit Discrimination

The NYC Commission on Human Rights (NYCCHR) is the city agency charged with enforcing the SCDEA. It issued legal guidance to assist employers with compliance.

According to the NYCCR, if an employer chooses to claim an exemption, it should:

  • Inform applicants or employees of the claimed exemption
  • Keep a record of its use of such exemptions for a period of five (5) years from the use date.
  • It should maintain an exemption log that includes:
    • The claimed exemption
    • Why the claimed exemption covers the position
    • The name and contact information of all applicants or employees considered for the exempted position
    • The job duties of the exempted position
    • The qualifications necessary to perform the exempted position
    • A copy of the credit history reported
    • How they obtained the credit history
    • How the credit history led to the employment action

Verified Credentials provides clients with a sample New York City Consumer Credit Report Disclosure. This can help you think about how to notify candidates if you decide to claim an exemption to the SCDEA and obtain a consumer credit history for employment purposes. Log into your Resource Library for the sample disclosure.

The NYCCHR states that it will impose civil penalties of up to $125,000 for SCDEA violations.  However, SCDEA violations resulting from willful, wanton, or malicious conduct could be penalized by up to $250,000.

Talk with your legal counsel to determine if the SCDEA applies to you and how to stay in compliance with NYC law.

Regulations from Federal Agencies and the FCRA

If you use background reports for employment purposes, you are probably well-versed in the federal Fair Credit Reporting Act (FCRA).

But did you know that the FCRA grants the Consumer Financial Protection Bureau (CFPB), a federal agency, rulemaking authority to help implement the FCRA? It’s written right into the law.

FCRA Section 623(e) states that “The Bureau may prescribe regulations as may be necessary or appropriate to administer and carry out the purposes and objectives of this title [the FCRA]…”

What are Regulations?

That’s a big question.  Some lawyers spend their entire careers interpreting regulations and studying the rulemaking authority of administrative agencies of the government.

The Congressional Research Service has a quick overview of federal regulations and their making.  Basically, “Congress often grants rulemaking authority to federal agencies to implement statutory programs.  The regulations issued pursuant to this authority carry the force and effect of law and can have substantial implications for policy implementation.”    Regulations made by federal agencies can often fill in gaps created by legislation. They may also provide technical details about how legislation should be implemented.

The FCRA is no exception. Let’s look at the regulations surrounding the FCRA.

Regulation V – FCRA Regulations

The CFPB maintains “Regulation V” (12 CFR Part 1022) to support the FCRA. Regulation V generally applies to anyone that uses consumer reports for employment purposes, among others. The CFPB provides an interactive, easy-to-navigate electronic format of the regulation that is available here. Regulation V covers important FCRA-related topics, such as:

  • Identity theft
  • Duties of furnishers of information
  • Duties of users of background reports
  • Duties of consumer reporting agencies
  • File disclosures to consumers
  • Affiliate marketing
  • Use of medical information

Multiple sections may apply to background report users.  If you use or obtain background reports, you may want to keep reading.

Take “Notice” of Appendix N

The CFPB provides multiple model forms in Regulation V. Under Appendix N, you will find a model “Notice to Users of Consumer Reports.” This notice gives a broad overview of the obligations a user of background reports may have under the FCRA. Essentially everything on your radar for your FCRA obligations is covered at a high-level right there, from adverse action to permissible purpose. This includes sections that cover:

  • Permissible purposes
  • User certifications to consumer reporting agencies
  • Consumer notices of adverse action
  • Obligations when disposing of records
  • Obligations when using background reports for employment purposes
  • And more!

It may be a good idea to read through this notice to understand your obligations. If you already have, it’s never a bad idea to brush up on it. Bookmark it for reference as you navigate the FCRA and when you use background checks. Catch up on other areas in Regulation V while you’re at it!

The FCRA regulations are intended to be helpful to you to determine your legal obligations. If you want more details on the FCRA or Regulation V, you should talk with your trusted legal counsel.

Employment Discrimination Based on Criminal History: A Cautionary Tale

The laws around employment background reports are vast. If you use background reports, you probably take care to follow all applicable federal, state, and local consumer reporting laws.

In addition to consumer reporting laws, you may want to consider anti-discrimination laws, too. Some states and cities have anti-discrimination laws that could prohibit conviction record discrimination.  Failing to consider state and local laws before making employment decisions based on criminal history could land an employer in hot water.

One Company’s Misstep

A Wisconsin employer is learning this lesson as outlined in the recent case of Cree, Inc. v. LIRC.

Cree, Inc., a company that manufactures and sells lighting products, offered a conditional offer of employment to an applicant contingent on a drug screen and background check.  The employer rescinded the offer of employment when the background report revealed that the applicant had “2012 convictions for strangulation/suffocation, fourth-degree sexual assault, battery, and criminal damage to property related to a domestic incident with a live-in girlfriend.”

The applicant had applied for an “Applications Specialist” position that would have the applicant working with more than “1100 employees, including about 500 women” in a facility that “includes a manufacturing space, storage areas with racks of parts, plus offices, conference rooms, cubicle farms, breakrooms, and the like.”  The applicant would have access to the entire facility, including areas without security cameras.  The position also included regular client interaction and unsupervised travel to both client locations and trade shows.

Tough Lesson in Court

The applicant “filed a discrimination complaint with the Wisconsin Department of Workforce Development alleging that [the employer] unlawfully discriminated against him when it rescinded a job offer for an Applications Specialist position based upon his conviction record.”  The Wisconsin Labor and Industry Review Commission (LIRC) found that the employer violated Wisconsin law and rescinded the “job offer based solely on his conviction record.”

A Wisconsin appellate court recently upheld the LIRC’s finding and held that the employer violated Wisconsin law.  The court states that “Wisconsin law prohibits an employer from refusing to hire a prospective employee on the basis of his or her conviction record…  The employer may, however, so discriminate if ‘the circumstances of [any felony, misdemeanor, or other offense] substantially relate to the circumstances of the particular job’ for which the employee is being considered.”

Disagreements on What “Substantially Relates”

Justifying its decision to rescind the offer of employment, the employer noted that the Applicant Specialist position would create “significant opportunity with which [applicant] could ‘commit additional crimes against persons and property.’”  The employer also stated that the applicant “would have… regularly interact[ed] with female coworkers whom he could later harm outside of work.”

The Cree court found that this argument was not enough to rescind the offer of employment to the applicant based on his conviction record.

The court noted that the applicant’s “criminal record does demonstrate a ‘tendenc[y] and inclination…’ to be physically abusive toward women in a live-in boyfriend/girlfriend relationship.”  However, the court held that “it would require a ‘high degree of speculation and conjecture’ to conclude that [applicant] would develop a live-in boyfriend/girlfriend relationship through the Applications Specialist job and… that mere contact with others at the facility and on the job is not substantially related to [applicant’s] domestic violence.”

The Cree court determined that the employer’s decision to rescind the offer of employment was “less focused on the circumstances of the particular job… and more focused on the general sense that [the applicant] is not fit to be unconfined from prison and participating in the community at all due to his prior crimes, even though he has long since finished serving the confinement portion of his sentence.”

Employers would be wise to take note of the Cree decision. Check state and local anti-discrimination laws before making an employment decision based on criminal history.

Not sure if any laws that would prevent you from using criminal history when hiring?  Talk to your legal counsel for the answers you need.

Disclosures Go Down the New Jersey Shore

Does your team live or work up and down the Jersey Shore? Then there are some state-specific disclosure requirements to keep in mind. That’s right, New Jersey law includes specific background report disclosure requirements. We have discussed other state-specific disclosure requirements for Minnesota, Montana, New York, and more. This month, we’re going to dive into the state-specific disclosure requirements in the Garden State.

Permission to Talk to References

Dominated by suburbs, highways, and malls, New Jersey boasts a big workforce of New York City and Philadelphia commuters. Here’s what you need to know if you plan to use Verified Credentials to verify information with references or employers of Jerseyites.

You’ll need to provide your candidates who live or work in New Jersey with a specific disclosure if you obtain an “investigative consumer report” on them, as defined by New Jersey law.

That’s when your background report has information obtained through personal interviews with neighbors, friends, associates, or acquaintances of the candidate or others with knowledge of the candidate.

The Platform for New Jersey Investigative Consumer Report Disclosures

Like beams and planks of a seaside boardwalk, state-specific disclosures must also build a platform on set requirements. What are the pieces that support New Jersey’s investigative consumer report disclosure? This background report disclosure must:

  • Be provided to the candidate before a background report is obtained.
  • Be in writing.
  • Clearly and accurately disclose that an investigative consumer report commonly includes information regarding the candidate’s character, general reputation, personal characteristics, and mode of living obtained through personal interviews of the candidate’s neighbors, friends, associates, acquaintances or others with knowledge of the candidate.
  • Include the precise nature and scope of the investigation requested and advise the candidate of the right to have a copy of the report upon request.

Verified Credentials offers a sample New Jersey investigative consumer report disclosure to help employers like you. You can see this by logging into your account and going to the Resource Library to get started.

Still not sure what state disclosures you need? Your legal counsel can help answer your questions about state-specific laws.

Anti-discrimination Suit Raised Against New York Insurance Company

If you’re an employer that uses background reports, compliance is a priority issue. Federal, state, and local consumer reporting laws are not the only laws to consider. From ban the box to anti-discrimination, there are many other types of laws for employers to keep in mind. All are important to consider before obtaining or using a background report.

A recent lawsuit filed against the New York Life Insurance Company serves as a good reminder. The complaint alleges violations of both the New York Human Rights Law (“NYHRL”) and New York City Human Rights Law (“NYCHRL”). Let’s review what the lawsuit says.

Allegations Against New York Life

The complaint against New York Life alleges the following:

  • That New York Life denied employment to qualified job applicants because of arrests that never resulted in a conviction.
  • By taking adverse action based on arrests that did not result in a conviction, New York Life violated both the NYHRL and the NYCHRL. The complaint makes the claim that “both New York State and City make it per se illegal for an employer to inquire about or deny employment because of arrests that were resolved in an individual’s favor.”
  • That New York Life’s practices have a negative societal effect. The complaint states that “discrimination on the basis of arrest record disproportionately impacts New Yorkers of color…”

Of course, these remain only allegations until the lawsuit is resolved. Verified Credentials will monitor this case as the litigation process goes on.

Keeping Anti-Discrimination Laws a Top Priority

Consumer reporting laws, like the FCRA, often steal the spotlight for background check compliance. Some lawsuits serve as a reminder of other compliance matters employers should care about.

In this case, the lawsuit filed against New York Life reminds employers about obligations beyond consumer reporting laws.

Monitoring and following anti-discrimination laws are just as important, as New York Life is finding out.

If you have any questions about background screening compliance, it is highly recommended that you speak with trusted legal counsel.

Ban the Box 2.0 in Montgomery County, Maryland

As the largest county in the state of Maryland, Montgomery County enacted its ban the box law years before the state did so. It took the state of Maryland until 2020 to pass a ban the box law. Not even a year later, Montgomery County took another step forward to update its initial law.

The First Rendition

Montgomery County’s early ban the box law was one of the first in the state of Maryland. Passed in 2014, the county’s first ban the box law:

  • Applied to non-governmental (except Montgomery County) employers in the county with 15 or more full-time employees, with certain exceptions.
  • Prohibited such employers from requiring a job applicant to disclose, on an employment application, the existence or details of their arrest or conviction record.
  • Prohibited such employers, before the completion of a job applicant’s first interview, from: 1) conducting a criminal background check on that applicant; 2) inquiring about that applicant’s arrest or conviction record or criminal history; or 3) requiring that applicant to disclose an arrest or conviction record or criminal history.
  • Required such employers to take certain actions before rescinding a conditional offer of employment made to an applicant based on an arrest or conviction record.

Montgomery County’s New Take

This year the county decided to expand its law. On November 20, 2020, the Montgomery County Council passed Bill 35-20. This bill amends the previous ban the box law.

So what updates were made? Key pieces include:

What employers the law applies to. Employers, as noted above, that employ 1 (one) or more employees are now included. And yes, private employers must comply.

When employers can inquire about criminal records etc. Such employers are now prohibited from doing the things outlined in bullet three above before the extension of a conditional offer of employment to the applicant.

Prohibited Inquiries. Such employers now cannot require an applicant to disclose, conduct a criminal record check to determine, otherwise inquire about or base a hiring or promotion decision on:

  • Arrests that did not result in convictions.
  • First convictions and related arrests for trespass or disturbance of the peace under Maryland law.
  • Misdemeanor convictions if three (3) years have passed since the date of conviction and the end date of incarceration for the conviction.
  • Certain confidential and expunged records per Maryland law.

The amendment further requires regulations to be issued necessary to inform applicants and applicable employers of their rights and responsibilities under Montgomery County’s ban the box law.

The amendment becomes effective on February 19, 2021.

Have questions about how the expansion of Montgomery County’s ban the box law impacts you? Speak with your legal counsel.

Innovating “Applicant”: Updates to California’s Ban the Box Law

The state of California is a leader in the tech world. Silicon Valley is the global hub for technology innovation and startups. Many of the largest tech-based corporations even call this state home. But when it comes to ban the box laws, California was less advanced. The California Fair Chance Act has only been around for a couple of years – 20 years after the first law of its kind in Hawaii.

How the State Joined the Movement

Beginning in 2018, California-based companies with five or more employees faced new restrictions. The state placed limits on how employers can use conviction history when evaluating applicants for employment during the hiring process.

The California Fair Chance Act says that employers cannot, among other things:

  • Ask applicants about criminal records on an employment application.
  • Ask or consider criminal history of any applicant until after making a conditional employment offer.
  • Consider an applicant’s sealed, dismissed, or expunged records.
  • Consider an applicant’s arrests without convictions or referrals to pre- or post-trial diversion programs.

Employers must evaluate an applicant’s records one by one if they look at criminal history during the hiring process. The assessment should consider the:

  • Nature and gravity of the offense
  • Time that has passed
  • Nature of the job

Reshaping Definitions

The Fair Chance Act specifically protects job applicants.  California was concerned that there could be potential loopholes with the law. For example, an employer could have an applicant start work before a post-offer criminal history review. At that time, they could have an “employee” status (even conditionally) with the employer. Then the job applicant could potentially lose their “applicant” status and protections provided by the Fair Chance Act.

Now the California Fair Employment and Housing Council has issued new regulations to address the potential loopholes.  As of October 1, 2020, these Fair Chance Act regulations expand the definition of “applicant.” An “applicant” now includes anyone with a conditional offer of employment, but starts working while the employer performs a post-conditional offer review of criminal history.

The state hopes this will prevent employers from avoiding Fair Chance Act requirements.

The state’s Fair Employment and Housing Council wants to help employers understand the Fair Chance Act. Take a look at the Frequently Asked Questions for additional direction.

Do you still have more questions?  Your legal counsel can help you understand how the California Fair Chance Act applies to you.

Keeping Things Unique in the State of New York

You may have heard this tongue twister before: “Unique New York.” That’s more than just a vocal warm-up for theater folks or a line from Will Ferrell’s character “Ron Burgundy” in Anchorman. It accurately describes the uniqueness of New York City. That one-of-a-kind city is only one part of what makes the state of New York special. It has big-city high rises and upstate cottages, and so much more.

Staying with its unique nature, the state of New York has its own background check disclosure requirements. We have previously talked about state-specific disclosure requirements in Massachusetts, Minnesota, Montana, California, and more. What sets New York apart?

The New York Specific Requirements

If you screen people who live or work in New York, you may want to pay attention to New York law.

Before getting a background report on them as part of an application for credit, employment, insurance, or property rental, you must provide them with a New York specific disclosure.  The disclosure must:

  • Be in writing.
  • State that a consumer (background) report may be requested in connection with the application.
  • Advise that, upon their request, they will be informed if a background report was requested. And, if so, that they can be provided with the name and address of the background report provider.

Extra Steps for Interview-Based Checks

New York has more requirements when you do certain verifications, like reference checks or some job history checks, on people who live or work in New York as part of an application for credit, employment, insurance or property rental. If your background reports contain information from personal interviews (known as an “investigative consumer report” under New York law), you have to provide another disclosure to them.  The investigative consumer report disclosure must:

  • Be in writing.
  • State that you may procure or cause to be prepared an investigative consumer report.
  • Advise that, upon their written request, they will be informed if an investigative consumer report was requested. And, if so, that they can be provided with the name and address of the background report provider.
  • Include a copy of Article 23-A of the New York Correction Law, if the investigative consumer report was obtained for employment purposes.

If you still have questions about whether your New York disclosures pass muster, you may want to talk with your legal counsel.

Unwrapping Ban the Box Updates in St. Louis

The city of St. Louis wrapped up its new Ban the Box law with a bow just in time for the new year. This means all employers in St. Louis have just over a month to renovate hiring processes before the law goes into effect.

Since our last update, the proposed Ban the Box law passed in St. Louis in January 2020.  Known as Ordinance 71074, the new law will create ban the box requirements for all employers in St. Louis starting next year. Let’s do a quick refresher of what will be required starting January 1, 2021.

The Ordinance Specifics

Starting January 1, 2021, the ordinance prohibits all employers in St. Louis with ten or more employees (with certain exceptions) from:

  • Making hiring or promotion decisions based on criminal history or a related sentence, with some exceptions. Employers can consider criminal history or a related sentence if they’re reasonably related to the job. They must show they used all information in making the decisions, including the frequency, recentness, and severity of the criminal history.
  • Inquiring about an applicant’s criminal history too early. Employers should make sure the applicant is qualified before asking about criminal history. In most cases, employers must wait until after an interview before making a criminal history inquiry.
  • Publishing job ads excluding applicants based on criminal history.
  • Using job applications or other hiring forms that include statements that applicants are excluded based on their criminal histories.
  • Asking about criminal history on the job application or other hiring forms.
  • Seeking public information about an applicant’s criminal history.

Violation Penalties

Employers should take note of the new law. Penalties increase with each violation:

  • A first violation could result in a warning or an order to comply.
  • A second violation could lead to an order to comply plus civil penalties.
  • A third violation could result in the loss of a business operating license.

As the countdown to the new year begins, you may need help unwrapping the new city-wide ordinance. Check in with your legal counsel about how the new ban the box law may impact you.

Aloha! to Ban the Box Updates in Hawaii

Grab your cup of Kona coffee, and let’s catch up on hiring on island time. Riding waves of new hires under Hawaii’s existing ban the box law doesn’t have to be a grind.  If you obtain background reports on individuals that live or work in Hawaii, keep on reading.

What Hawaii’s Ban the Box Law Says

Hawaii may be the childhood home to Dwayne “The Rock” Johnson. It’s also home to one of the oldest ban the box laws in the U.S.  Hawaii’s law before the amendments outlined below, with some exceptions, had restricted employers from:

  • Inquiring into and considering conviction records for prospective employees until after a conditional offer of employment.
  • Withdrawing a conditional offer of employment based on conviction records unless the conviction had a “rational relationship” to the position’s duties and responsibilities.
  • Considering conviction records outside of 10 years, excluding periods of incarceration.

To read the version of Hawaii’s law before the amendments outlined below, click here.

Riding a Wave of Tighter Restrictions

First enacted in 1998, Hawaii’s ban the box law paved the way for other laws like it. Now it catches the wave of tighter restrictions. Hawaii has recently amended its ban the box law.  The previous 10-year “look back” period – or how far back a background check may go – has been tightened up.  As of September 15, 2020, Hawaii employers can only consider, with some exceptions:

  • Seven (7) years of conviction history for felony convictions, excluding periods of incarceration.
  • Five (5) years of conviction history for misdemeanor convictions, excluding periods of incarceration.

To see the full text of Hawaii’s amendments to its ban the box law, click here.

Calm Waters: What Has Stayed the Same

The other points of Hawaii’s ban the box law remain.

  • You must still wait. Wait until you make a conditional job offer before looking into conviction history.
  • The conviction history must be relevant. If you consider a job applicant’s conviction history, keep a key point in mind. The conviction must have a “rational relationship” to the duties and responsibilities of the position.

You and your hiring team may need to be well-versed in ban the box laws. Hawaii’s ban the box law is not an island. It is among many state and local laws like it, each with its own complex provisions.  Please check with your legal counsel regarding fair and compliant hiring practices.

Heroes Act: Where the Pandemic and Background Checks Could Intersect

The coronavirus (COVID-19) pandemic has a far-reaching impact on us all. We’ve had to monitor access to courthouse records during state closures, certainly. Verified Credentials also helps employers navigate new hiring challenges. But in many ways, background reports have not had to tangle with the pandemic.  That may be changing soon.  With pending legislation in response to the national emergency, COVID-19 could impact your background reports.

On September 29, 2020, Congress introduced the “Heroes Act” (HR 8406) as a potential COVID-19 relief measure.

Potential Changes to the FCRA

The Heroes Act includes proposed amendments to the Fair Credit Reporting Act (“FCRA”).  If passed, the Heroes Act could place new limits on the ability to include some adverse information in background reports.

Except for felony criminal convictions, The Heroes Act would amend the FCRA to:

  • Prohibit furnishers of information from furnishing certain adverse information if the adverse information was the result of any action or inaction that occurred during COVID-19 (or future declared major disasters); and
  • Prohibit background reports from containing certain adverse information if the adverse information was the result of any action or inaction that occurred during COVID-19 (or future declared major disasters)

To read the full text of the Heroes Act, click here. The proposed FCRA amendments are listed in Section 401.

What Could Change in Background Reports?

If passed, the Heroes Act could have an impact on what appears in your background reports.  The amendments could prevent certain adverse information from showing up in your background reports, including:

  • Criminal information
  • Professional license sanctions
  • Other adverse information restricted by the Heroes Act

The Heroes Act – and its effect on your background reports – is a developing topic. The Heroes Act has not become law and is still in the early stages of the legislative process.  Verified Credentials will continue to monitor this proposed legislation.

Want to prepare for potential FCRA changes? You may want to consult with your legal counsel early to understand how the proposed Heroes Act may impact you.

Into the Wild of Montana’s Disclosure Requirements

The great outdoors called to many of us in recent months. It’s been a much-needed break from at-home offices and busy homes in lockdown. Residents of Montana may have had the best views, with desirable natural features. Let’s get in touch with the background check surroundings in the great state of Montana.

State and federal laws govern background checks. Yes, there are background report disclosure requirements in the federal Fair Credit Reporting Act (FCRA). But like California, Minnesota, and more, Montana has background report disclosure requirements too.

Let’s get to know the legal landscape surrounding Montana’s disclosure requirements. Find out what type of background report needs a Montana disclosure. If you’re getting background reports on someone who lives or works in Montana, you may want to keep Montana’s disclosure law in mind.

The Terrain of Montana’s Disclosure

From a bird’s-eye view, you need to know when Montana requires you to provide a state-specific disclosure. You need one for what’s known as an “investigative consumer report” under Montana law. That’s when your background report has information obtained through personal interviews with neighbors, friends, or associates of the candidate. This background report disclosure must:

  • Clearly and accurately disclose to the candidate that an investigative consumer report, including information about their character, general reputation, personal characteristics, and mode of living, whichever are applicable, may be made.
  • Be in writing.
  • Be mailed or delivered to the candidate within three (3) days after the background report was first requested.
  • Inform the candidate that they have the right to submit a written request to you, within a reasonable period after their receipt of the disclosure, for complete and accurate information about the nature, scope, and substance of the investigation requested.
  • TIP: If you receive a written request for more information from your candidate, time is of the essence. The written response to the request must be mailed or delivered to the candidate within five (5) days after either: (1) your receipt of the request; or (2) your request for the background report, whichever is later.

Solid Ground to Write Your Disclosures

You don’t need to start this journey alone. We offer sample compliance disclosures as your pathfinder. You can see a sample Montana investigative consumer report disclosure on demand. Log into your Verified Credentials Employee® account and go to the Resource Library.  Download the “Montana Investigative Consumer Report Disclosure” to get started.

Still not sure what state disclosures you need? Your legal counsel can help you get a lay of the land regarding state-specific laws.

North Carolina Firing Up Ban the Box

If you like your barbecue sauce true North Carolina style, you know it should drizzle, not stick, to what’s in the pit. A recipe isn’t always needed, but the signature style must be there. In a true North Carolina fashion, ban the box laws need to follow those same rules.

Ban the box has made its way to North Carolina. North Carolina’s new executive order restricts how state government employers can use criminal history. The state aims to have “fair chance policies” at state agencies.

Simple Step-by-step Preparation

Starting November 1, 2020, North Carolina state agencies, with some exceptions:

  • Can’t ask job applicants about their criminal histories during the initial stages of the hiring process.
  • Must remove criminal history questions from employment applications.
  • Can conduct a background check at a later stage in the hiring process. But not until an initial job interview has been conducted.
  • Are limited in what criminal records they can consider when hiring. Records they cannot use include:
    • Expunged or pardoned convictions
    • Charges and convictions unrelated to the job
    • Arrests with no conviction
    • Dismissed or “not guilty” charges
  • May not consider an applicant’s criminal history unless it’s job-related and consistent with business necessity, with some exceptions.
  • Must give the applicant a copy of their criminal record, if they get criminal history during the hiring process, and the FCRA’s Summary of Rights.
  • Must give an applicant with a criminal record a reasonable opportunity to explain that record and provide any proof of rehabilitation.

Secret Sauce of the State’s Fair Chance Order

The order only applies to state agencies and state government jobs under the governor’s purview. The order directs the state’s Department of Administration to determine if it should be extended to state contractors.

Private businesses are encouraged, but not required, to comply.

Just like you would consult the great pitmasters, you can get a professional take on the firmly drawn lines for this order. For more information, North Carolina has packed a punch to common questions. As you prepare to bring it all together, check out its frequently asked questions about the order.

Verified Credentials will continue to monitor ban the box in North Carolina.  You may want to consult with your legal counsel if you have questions how this order may impact you.

Macy’s Learns What’s in Store for Employers Who Engage in Discriminatory Employment Practices Using Background Report Information

Retail stores are no strangers to matters of civil rights. For decades, civil rights laws have helped keep retailers accountable for consumers’ civil rights complaints. Anti-discrimination protections extend not just to the shoppers, though. They reach essential workers keeping the doors open, too. How retailers hire cashiers, store clerks, backroom dock workers and more can be subject to those protections. Let’s revisit the discrimination complaint regarding Macy’s hiring practices as it draws to a close.

Inventory of Claims & (Proposed) Resolutions

Last year a class-action lawsuit was brought against Macy’s.  (To read our industry note about this, click here.)  The complaint alleged that the company improperly used background report information to discriminate against its applicants and employees. The complaint included alleged violations of Title VII of the Civil Rights Act of 1964 and the New York City Human Rights Law.

There has been a new development in the litigation.  Macy’s and the plaintiffs have reached a proposed settlement.  If approved, Macy’s must:

  • Change its applications. Its applications will not be able to mention the requirement for a background check for applicants in New York City.
  • Hire a consultant to review its background check procedures in New York City. The consultant will review them in light of New York laws and Title VII.  Macy’s will make changes to its background check procedures in New York City based on the consultant’s advice.  Macy’s must report changes made to those background check procedures to plaintiffs’ counsel.
  • Maintain any changes made to the background check procedures for a minimum of two years.
  • Pay a monetary settlement of $1.8 million.


Read the full proposed settlement here.

The proposed settlement has not been finalized.  It will take effect when approved by the court.

Keeping Stock of Regulations

This case is a reminder of how important legal compliance is when conducting background checks. It’s not just for big box stores. You should keep in mind background check laws at the federal, state, and local level.  Also keep anti-discrimination laws in mind when taking inventory of your background check programs.

It’s a lot of laws to remember.  What’s the best way to make sure your background screening program maintains compliance with all applicable laws? You should always consult with your legal counsel.

“Minnesota-Nice” Background Check Disclosures

Some states have their own background check disclosure laws. California, Massachusetts, and more may require disclosures, besides FCRA disclosures, before you screen (see our industry notes on these here and here). We’ve traveled coast-to-coast covering some disclosure laws. Now we’re back to the Midwest and our home state. “Ope,” you betcha, Minnesota is on that list.

Do you get a background report for employment purposes on someone that lives or works in Minnesota? If so, you may want to keep Minnesota law in mind.

What’s Required in the Land of 10,000 Lakes

Much like the Mighty Ducks getting in formation of the Flying V, the shape a Minnesota disclosure (as to a background check for employment purposes) should take is spelled out in state law. Like the Ducks, the Minnesota statute on such a disclosure first emerged in the early 90s. It must:

  • Be in writing;
  • Be provided to the applicant or employee before a background report is obtained;
  • Clearly state that a background report may be obtained or caused to be prepared;
    Inform the applicant or employee of the right to request from the screening provider additional information on the nature of the report on their written request;
  • Include a box the applicant or employee can check to get a copy of the report;
  • If information in the report, like references, is to be obtained through personal; interviews of the applicant or employee’s friends, neighbors or associates, advise of this; and
  • Be included in or accompany an employment application.

Get Your (Gray) Ducks in a Row

Wondering where to start? We offer sample compliance documents to help. You can review our sample Minnesota disclosures when creating your own. Simply log into your Verified Credentials Employee® account and go to the Resource Library. Download the “Minnesota Consumer Report Disclosure” and “Minnesota Investigative Consumer Report Disclosure” samples to get started.

Continue to review your disclosures with your legal counsel to make sure you’re compliant with state-specific laws. We hope these shortcuts to Minnesota resources help.

Full Disclosure: Getting to Know Massachusetts Background Report Compliance Notices

Background checks from a background screening company start after a few basic steps. Consent forms must be signed, and disclosures presented. Once complete, we can get to work on a background report – and your candidates get to work for you. It’s not just federal compliance that drives disclosure and authorization forms. Some states have unique disclosures too. In addition to states like California, Massachusetts has disclosures for select background reports. Let’s get to know what those are.

Finding out if you need a Massachusetts disclosure

A Massachusetts-specific disclosure is not required for every background report. The requirements apply to investigative consumer reports on job candidates and employees.

You may want to check your definitions to apply this disclosure. Massachusetts law defines an investigative consumer report to help you know when it’s needed. Generally, it’s how you’re looking for information on the candidate or employee. If it comes from “personal interviews with neighbors, friends, or associates,” it could be an investigative consumer report.

If a candidate or employee lives and works in Massachusetts, it may be time to present them with this disclosure. What should that disclosure include? Let’s see what the state law indicates.

Pre-background check disclosure requirements

Maybe you’re nodding along already. Who you’re hiring and what information you’re checking is ticking these requirements. To create your disclosure, you need to know what to include. Here are some requirements to address before ordering a background report. Job candidates and employees need to hear specific language (in writing!) from you, including:

  • Clearly and accurately disclose that “an investigative consumer report commonly includes information as to [their] character, general reputation, personal characteristics, and mode of living.”
  • Provide the “precise nature and scope of the investigation requested.”
  • Inform them of their “right to have a copy of the report upon request.”
  • Obtain written permission from them to obtain the investigative consumer report.

Still not sure where to start? We offer sample compliance documents to our clients to help. Verified Credentials clients can access a sample Massachusetts disclosure to review when creating your own. Simply log into your Verified Credentials Employee account and go to the Resource Library. Take a look at the “Massachusetts Investigative Consumer Report Disclosure.” Download the sample to get started.

Getting started with state-specific background check disclosures

A state-specific disclosure for Massachusetts may apply to you if:

  • You have job candidates or employees that live or work in Massachusetts
  • AND you order background check information obtained via personal interviews (e.g. reference checks and some employment history verifications)

You may want to review your disclosure documents to size up compliance with Massachusetts law. Sitting down with your legal counsel is the best way to double-check that your background screening practices are compliant.

Once you have your disclosure language tied up with your legal counsel, talk to us. We can help you get this in front of job candidates. It’s easy to update language in your candidate portal for background checks (Candidate Verification Center). The online delivery puts your disclosure up on your job candidate’s screen for easy compliance.

Holy Toledo! Salary History Ban Moves into Toledo, Ohio

Protecting job candidates means more laws take their corner on privacy rights. More locations are restricting information about employment experience, including salary history.

As of June 25, 2020, Toledo became the second city in Ohio to adopt a salary history ban.

They join Cincinnati that passed a ban [last year].  The new law means employers generally can’t ask job candidates about compensation during the hiring process.

If you are an employer located in Toledo, the new law may apply to you. It’s not just about where you are located. It’s about where your employees live and work. You may find this law may have implications for your business. For example, if you have over 15 paid employees in Toledo, you may need to pay attention to this new ban.

What the salary history ban says

Generally, the salary history ban restricts requests for compensation details from job candidates. The full text of the law offers complete details on rules and exceptions. Here are some highlights from Toledo’s salary history ban:

  • In general, employers cannot:
    • Ask a job candidate about their salary history.
    • Screen job candidate based on their current or prior wages, benefits, or other compensation.
    • Use a job candidate’s salary history to define job offers (salary, benefits, or other compensation) or negotiate job contracts.
    • Refuse to hire or discriminate against a job candidate for not disclosing their salary history.
  • Employers shall disclose the pay scale for a position to a job candidate, at the job candidate’s request, when they present a conditional job offer.
  • This law doesn’t mean employers can’t engage in discussions about job candidate’s pay expectations. After all, salary, benefits, and other compensation are normal parts of job offer negotiations. Employers just can’t ask about salary history.

What to do next

Laws like salary history bans are a serious matter. If you are not sure how or if this law applies to you, your legal counsel may provide the best advice. Not complying could be an unlawful discriminatory practice. There are risks of high costs if you fail to comply. Under the ban, job candidates have a private cause of action to seek compensation for violations.

Blocking in Memphis: Ban the Box Comes to Shelby County, Tennessee

Music landmarks and legends found a home in Memphis. It’s home to the biggest movements in blues, soul, and rock ‘n’ roll. Now the second biggest city in Tennessee is part of a big movement in background screening.

Shelby County, Tennessee, where Memphis is located, has joined the ban the box movement.

The new law blocks public-sector employers from reviewing job candidate’s criminal history before the job offer.

When does the law take affect?

On July 27, 2020, the Shelby County Board of Commissioners passed the ordinance. The ban-the-box restrictions apply to Shelby County government jobs. The ordinance takes effect on August 11, 2020.

What does the Shelby County law say?

Want to get the full details? View Ordinance Number 513 ››

The Shelby County ordinance provides guidance and restrictions on how and when to use criminal history, with some exceptions. Here is a roundup of some of the main points for Shelby County government employers:

Pre-background check:

  • Do not ask for criminal history before a contingent job offer is extended.
  • Give candidates documentation. Job candidates should see a conditional offer letter of employment, notice of rights under the ordinance, and a request for authorization to conduct a background check prior to initiating a background check.
  • Include specific information regarding background checks in job postings.

Post-background check:

  • Limit what criminal records you look at in a criminal background check. Arrests without conviction, expunged records, juvenile history, and more should not be considered.
  • Focus on criminal convictions that apply to the job duties only or automatically bar employment according to other laws.
  • Provide the applicant with a specific notice if the job candidate’s criminal history may hold back hiring.
  • Leave room for the whole story. If a job candidate made amends from past conviction, they may provide evidence to support their fitness to work. That open position should be held for them until a final hiring decision is made.

The ordinance specifically bans the box for government jobs with Shelby County. But not so fast. The ordinance signals to third parties associated with the county, too. In it, they suggest government offices may want to work with partners that have similar hiring practices in place. Any vendor, contractor, or supplier to Shelby County may want to review their hiring procedures. The county “prefers” working with partners that have similar “conviction history policies, practices, and standards” in place. This includes a recommendation that vendor job applications not contain a “box” about prior criminal convictions (unless otherwise required by law).

If you do business with Shelby County, it may be a good idea to discuss the new ordinance with your legal counsel to determine how the ordinance may impact you.

More California Background Report Disclosures: San Francisco

We’ve talked about how, in California, the Investigative Consumer Reporting Agencies Act (“ICRAA”) and the Consumer Credit Reporting Agencies Act (“CCRA”) require employers to make specific disclosures to their applicants and employees before obtaining background reports on them, beyond the disclosures required by the federal Fair Credit Reporting Act (“FCRA”).  The patchwork of California-specific required disclosures to applicants and employees surrounding background reports doesn’t stop at the state level.

San Francisco, California, has its own law, the Fair Chance Ordinance (“FCO”), that requires specific disclosures be made to applicants and employees before an employer covered by the law can obtain background reports on them that contain conviction history, as defined by the law. 

Employers covered by the law (“Employers”) are those located or doing business in San Francisco, and that employ five or more persons regardless of location, including their owner or owners and management and supervisorial employees.  Employers do not include California or federal government employers.  With certain exceptions, conviction history is information from any jurisdiction that a person has been convicted of a felony or misdemeanor for which the person has been imprisoned, fined, placed on probation or paroled.  Conviction history is also information from any jurisdiction regarding an arrest undergoing an active pending criminal investigation or trial that has not yet resolved.

Before obtaining background reports on their applicants and employees containing conviction history, the FCO requires employers to provide them with a specific disclosure provided by the San Francisco Office of Labor Standards Enforcement (“OLSE”), available here.  The San Francisco disclosure consists of a notice developed by OLSE that informs applicants and employees of their rights under the FCO.  Employers must provide the notice in English, Spanish, Chinese, Filipino, and any language spoken by more than 5% of the employer’s employees.

Employers are also required to post the San Francisco disclosure in a conspicuous place at every workplace, job site, or other location in San Francisco under the employer’s control frequently visited by their employees and applicants.

In addition to the San Francisco-specific disclosure, the FCO also details specific responsibilities for employers.  To read the full text of the FCO, click here.  For more information on the FCO, the OLSE provides helpful insight into the requirements for employers, available here.

Because of the complexity of laws surrounding background reports, especially on applicants and employees of San Francisco employers, it may be a good idea to speak with your legal advisor to ensure that you are in compliance with the FCO and other applicable laws.

 

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