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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.

 

DHS Extends I-9 Compliance Flexibility

Last month, we discussed the Department of Homeland Security (“DHS”) news release announcing a 30-day extension in I-9 compliance flexibility to July 19, 2020. For more information on the I-9 flexibility, check out our recent blog post highlighting some of the accommodations, available here.

DHS, through US Immigrations and Customs Enforcement (“ICE”), has announced that I-9 compliance flexibility is being extended again, with the expiration date for the accommodations now set to expire on August 19, 2020.

While ICE has granted an extension to the physical presence requirements associated with Form I-9, ICE also announced that “no additional extensions will be granted to employers who were served notices of inspection (“NOIs”) by ICE during the month of March 2020.”

Verified Credentials will continue to monitor DHS announcements regarding I-9 compliance flexibility. For the latest information, be sure to visit I-9 Central. As always, be sure to talk with your legal counsel before taking advantage of the I-9 compliance flexibility rules to make sure you stay compliant.

Salary History Restrictions Coming to Maryland

There has been an increase in jurisdictions adopting “salary history bans,” like the salary history bans we have discussed in New Jersey, New York, Philadelphia, Pennsylvania, and Cincinnati, Ohio.  With recent legislation, the state of Maryland can soon be added to the list of jurisdictions with restrictions on an employer’s ability to ask about an applicant’s salary history.

Effective October 1, 2020, Maryland’s salary history ban:

  • Requires an employer, at the applicant’s request, to “…provide to an applicant for employment the wage range for the position for the which the applicant applied.”
  • Prohibits an employer from “Retaliat[ing] against or refus[ing] to interview, hire, or employ an applicant for employment because the applicant: (1) Did not provide wage history; or (2) Requested the wage range… for the position for which the applicant applied.”
  • With some exceptions, prohibits an employer from: “(1) Relying on the wage history of an applicant for employment in screening or considering the applicant for employment or in determining the wages for the applicant; or (2) Seeking the wage history of an applicant for employment orally, in writing, or through an employee or agent from a current or former employer.”
  • Allows an applicant for employment to voluntarily share wage history with an employer.
  • Allows an employer to, after making “an initial offer of employment with an offer of compensation to an applicant for employment”: (1) “Rely on the wage history voluntarily provided by the applicant for employment to support a wage offer higher than the initial wage offered by the employer,” as long as the “higher wage does not create an unlawful pay differential based on protected characteristics” under Maryland law; and (2) “Seek to confirm the wage history voluntarily provided by the applicant for employment to support a wage offer higher than the initial wage offered.”


An employer that violates Maryland’s new salary history ban may receive a letter compelling compliance from the Maryland Commissioner of Labor and Industry for a first violation, a fine of $300 for each instance of non-compliance for a second violation, and a fine of $600 for each instance of non-compliance for subsequent violations.

Verified Credentials will continue to monitor and attempt to provide updates regarding Maryland’s salary history ban as they become available.  Remember, it’s never a bad idea to discuss these upcoming changes with your legal counsel to ensure your hiring complies with applicable law.

DHS Announces Extended I-9 Compliance Flexibility

The Department of Homeland Security (“DHS”) recently issued a news release announcing a 30-day extension in I-9 compliance flexibility, to July 19, 2020, due to continued precautions related to COVID-19.

DHS made the initial I-9 compliance flexibility announcement on March 20, 2020 (available here).  In its statement, DHS recognized the difficulty employers might have attempting to physically review their employee’s identity and employment authorization documents in the employee’s presence due to COVID-19 related remote-work and social distancing guidelines.  DHS stated that it would “exercise discretion to defer the physical presence requirements associated with [Form I-9].”

According to the initial announcement, employers engaging employees in remote-work have some temporary flexibility in I-9 compliance:

  • Employers can inspect their employee’s documents remotely (e.g., over video link, fax or email, etc.) and obtain, inspect, and retain copies of the documents within three business days.
  • Once the employer’s 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.

Even though DHS is granting some flexibility in I-9 compliance, there are some limitations to keep in mind:

  • Employers that avail themselves of the remote inspection option must provide written documentation of their remote onboarding and telework policy 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.
  • This option is only available for employers and workplaces that are operating remotely. If employees are physically present at a work location, no exceptions are allowed for in-person verification of identity and employment eligibility documentation.

With the latest extension announced by DHS, the expiration date for these accommodations is now July 19, 2020.  While this announcement may help employers practice social distancing, it’s always a good idea to talk with your legal counsel before taking advantage of the I-9 compliance flexibility rules to make sure you stay compliant.

Virginia “Bans the Box” (For Certain Offenses)

We have highlighted several new ban the box laws at the local, state, and federal level.  Another month brings a new ban the box law for you to consider.

On May 21, 2020, the Governor of Virginia signed a law that bans the box for certain marijuana-related offenses.

To read the new law, click here.

The new law amends Virginia’s simple marijuana possession statute (Va. Code § 18.2-250.1).  As amended, the simple possession of marijuana in Virginia, while still unlawful without a prescription, is no longer subject to a criminal penalty.  Instead, a person who violates Virginia’s simple marijuana possession law has engaged in a civil offense and is subject to a civil penalty and a fine of no more than $25.  Note that per Virginia law, marijuana possession with the intent to sell, give, or distribute is still a criminal offense. Still, there is a rebuttable presumption in the law that a person who possesses no more than one ounce of marijuana possesses it for personal use.

Because of the changes to Virginia’s simple marijuana possession law, reporting and asking for information regarding this type of offense has also been changed.  According to the new law:

  • “Records relating to the arrest, criminal charge, or conviction of a person for a violation of [Virginia’s simple marijuana possession law]… shall not be open for public inspection or otherwise disclosed,” with some exceptions.
  • “An employer or educational institution shall not, in any application, interview, or otherwise, require an applicant for employment or admission to disclose any information concerning any arrest, criminal charge, or conviction against him when the record relating to such arrest, criminal charge, or conviction against him when the record relating to such arrest, criminal charge, or conviction is not open for public inspection pursuant to [the new law].”
  • “An applicant need not, in answer to any question concerning any arrest, criminal charge, or conviction, include a reference to or information concerning any arrest, criminal charge or conviction when the record relating to such arrest, criminal charge, or conviction is not open for public inspection pursuant to [the new law].”

Take note, an employer or educational institution that willfully violates the law’s prohibition on asking applicants about certain marijuana-related offenses can be found guilty of a Class 1 misdemeanor for each violation.

The new law is set to take effect on July 1, 2020.  Because violations of this new ban the box law may result in criminal penalties for employers and educational institutions, it may be a good idea to discuss the law with your legal advisor to determine how, or if, this new law might impact you.

“Credit Checks” in California? There’s (Another) Disclosure for That!

Last month we discussed California’s Investigative Consumer Reporting Agencies Act (“ICRAA”) and the state-specific disclosures required by the ICRAA if you obtain “investigative consumer reports” as defined by California law on applicants or employees who live or work in California (available here).

However, the California-specific requirements don’t end with the ICRAA.

If you obtain background reports on your applicants or employees who have a mailing address in California bearing on their creditworthiness, credit standing, or credit capacity (known as “consumer credit reports” in California), you may have additional disclosure requirements as outlined in the California Consumer Credit Reporting Agencies Act (“CCRA”).

Before requesting your report, you must:

  • Provide written notice to the applicant or employee that a “consumer credit report” will be used for employment purposes.
  • Identify in the notice the specific basis for the use of the report.
    • Insider Tip: California law strictly limits the particular grounds for the use of a “consumer credit report,” only allowing an employer to use it for very specific positions, as detailed in California Labor Code § 1024.5. Even if you may have a “permissible purpose”, as those terms are defined by the Fair Credit Reporting Act (“FCRA”) or even the ICRAA, it may not be valid for a “consumer credit report” under the CCRA.  Double-check that you have a specific basis for using a consumer credit report under the CCRA before ordering background reports on your California applicants and employees that bear on their creditworthiness, credit standing, or credit capacity!
  • Identify in the notice the source of the report.
  • Provide your applicant or employee with a box in the notice that they can check off to receive a copy of the report.
    • Insider Tip: If your applicant or employee checks this box, be sure to let your background check partner know so they can provide your applicant or employee with a copy of their report. Note – Verified Credentials’ clients don’t need to notify us if their notice is in their Candidate Verification Center. We will automatically send the applicant or employee a copy of the report if the box is checked.

For a sample CCRA notice to review in creating your own, take a look at the “California Consumer Credit Report Disclosure” in Verified Credentials’ Resource Library.

Laws surrounding background reports can be complex, especially in California!  If you have applicants or employees that have mailing addresses in California, and you are thinking about obtaining background reports on them, you may want to check with your legal advisor to make sure that your disclosures comply with California law.

Background Reports in California? There’s a Disclosure for That!

You’re probably aware of the federal Fair Credit Reporting Act (“FCRA”) disclosure and authorization requirements for employers that want to obtain background reports from consumer reporting agencies like Verified Credentials on employees and applicants. If you want a quick refresher on the federal requirements, click here.

But did you know that you may be required to provide additional disclosures if you obtain background reports on applicants or employees that live or work in certain states? It’s true, and it’s something to keep in mind when you develop your background screening practices and procedures.

Let’s touch on some California-specific requirements. If you obtain background reports from Verified Credentials on applicants or employees who live or work in California, you may be required to provide unique, California-specific disclosures under the California Investigative Consumer Reporting Agencies Act (“ICRAA”).

ICRAA governs obtaining and using “investigative consumer reports” on applicants or employees who live or work in California. Keep in mind that the ICRAA defines an investigative consumer report as “a consumer report in which information on a consumer’s character, general reputation, personal characteristics, or mode of living is obtained through any means.”

Insider Tip: Even though ICRAA and the FCRA each use the term “investigative consumer report,” the definitions are very different! You may be surprised to find that your background reports might be considered “investigative consumer reports” in California, even if they aren’t “investigative consumer reports” under the FCRA.

If your background reports fall under ICRAA’s definition of “investigative consumer reports,” ICRAA has specific requirements before you can obtain background reports on your California applicants and employees from Verified Credentials (with certain limited exceptions). You must:

  • Have a permissible purpose, as defined by California law.
  • Provide a clear and conspicuous disclosure in writing to the applicant or employee, at any time before the background report is obtained, in a document that consists solely of the disclosure, that: (1) States an “investigative consumer report” may be obtained; (2) Identifies the permissible purpose of the report; (3) States the report may include information on the applicant or employee’s character, general reputation, personal characteristics, and mode of living; (4) Identifies the name, address, and telephone number of Verified Credentials; (5) Notifies the applicant or employee in writing of the nature and scope of the investigation requested, including a summary of the provisions of California Civil Code Section 1786.22; (6) Notifies the applicant or employee of Verified Credentials’ website address, where the applicant or employee may find information about our privacy practices.
  • Obtain the applicant or employee’s written authorization to procure the report.

You may think you have a handle on FCRA disclosure and authorization requirements. Still, if your applicants or employees live or work in California, it might be time to re-evaluate your disclosure documents to comply with California law. Consulting with a trusted legal advisor is the best way to ensure that your background screening practices comply with ICRAA.

Insider Tip: Do you obtain background reports on your applicants or employees who have mailing addresses in California bearing on their creditworthiness, credit standing, or credit capacity”? These are considered “consumer credit reports” in California and are governed by the California Consumer Credit Reporting Agencies Act (“CCRA”), not the ICRAA. The CCRA requires additional, specific disclosures in addition to ICRAA requirements. Be sure to check back next month for more information on the CCRA disclosure requirements.

Suffolk County, New York Passes Ban the Box Law

We have previously discussed several new “ban the box” laws at the local, state, and even federal level. On March 17, 2020, Suffolk County, New York passed their version of a ban the box law.

This law applies to the County AND certain private businesses located in the County. The law defines an “Employer” as “the County or any person, partnership, corporation, labor organization, not-for-profit, or association having fifteen (15) or more employees.”

The new law creates a “Fair Employment Screening” requirement, which places restrictions on when an Employer, as defined by the law, is permitted to ask about an applicant’s criminal history. The new law states that:

Suffolk County and any Employer located within the County shall not ask questions regarding or pertaining to an applicant’s prior criminal conviction on any preliminary employment application. Consideration of the candidate’s prior criminal convictions shall take place only after an application is submitted, after an initial interview, or thereafter.

The Suffolk County ban the box law goes into further detail on the new ban the box restrictions, stating that:

  • It shall be an unlawful discriminatory practice for an Employer to make any inquiry regarding or to require any person to disclose or reveal any criminal conviction during the application process. The application process shall begin when the applicant inquires about the employment sought and shall end when an Employer has accepted an employment application.
  • It shall be an unlawful discriminatory practice for an Employer to make any inquiry regarding or to require any person to disclose or reveal any criminal conviction against such person before a first interview. If an Employer does not conduct an interview, that Employer must inform the applicant whether a criminal background check will be conducted before employment is to begin.

Additionally, the law says that if an Employer does conduct a criminal background check on an applicant after following the new ban the box restrictions, it “shall comply with Article 23-A of the New York State Corrections Law when considering an applicant’s prior criminal convictions in determining suitability for employment.” Article 23-A of the New York State Corrections Law describes, among other things, certain factors an employer should consider before making an employment decision based on a candidate’s previous criminal history. A copy of Article 23-A is available here.

There are some exceptions to the Suffolk County law:

  • Employers hiring for licensed trades or professions, including positions such as interns and apprentices for licensed positions, may ask applicants the same questions asked by trade or professional bodies, in accordance with New York state law.
  • Employers hiring for positions where certain convictions or violations are a bar to employment in those positions under New York state or Federal law can ask questions about those convictions or violations.
  • The law doesn’t apply if criminal conviction inquiries or adverse action are specifically authorized by any other applicable law.
  • The law doesn’t apply to any public or private school, or any public or private provider of direct services specific to the care or the supervision of children, young adults, senior citizens, or the physically or mentally disabled.
  • The law doesn’t apply to select police or fire departments.

There’s still some time to determine if, or how, these new restrictions may impact you. The new law is set to become effective on August 25, 2020.

The new Suffolk County ban the box law is just one of the latest in the expanding ban the box movement. With the rapidly changing legal landscape surrounding these laws, you may want to check with your legal counsel to determine if this Suffolk County law, or any other ban the box restrictions, apply to you.

The Ninth Circuit, Once Again, Addresses FCRA Disclosure and Authorization Requirements

The Ninth Circuit Court of Appeals has recently issued a few well-publicized decisions on Fair Credit Reporting Act (“FCRA”) disclosure and authorization requirements. We have previously discussed two marquee decisions, Gilberg v. California Check Cashing Stores, LLC and Walker v. Fred Meyer, Inc., both of which provide employers with valuable insight into what may or may not be allowed in their background report disclosure and authorization forms.

As most employers know, the FCRA has specific disclosure and authorization requirements before an employer can obtain a background report from a consumer reporting agency, like Verified Credentials, for employment purposes. You can check out a quick refresher on these requirements here.

To add to the ever-expanding list of court decisions interpreting the FCRA’s disclosure and authorization requirements, the Ninth Circuit has recently issued its opinion in Luna v. Hansen and Adkins Auto Transport, Inc.

According to the decision, the employee that brought a suit against his employer alleged that the employer violated the FCRA’s disclosure and authorization requirements “by providing a FCRA disclosure simultaneously with other employment materials, and by failing to place a FCRA authorization on a standalone document.”

The Ninth Circuit disagreed with these arguments and upheld a previous summary judgment decision in favor of the employer, stating that the employee’s arguments are “thwarted by the statute itself.”

In addressing the employee’s arguments, the Ninth Circuit provides some useful interpretations of the FCRA’s disclosure and authorization requirements:

  • “But nothing [in a previous Ninth Circuit opinion on disclosure and authorization requirements] can be read to prohibit an employer from providing a standalone FCRA disclosure contemporaneously with other employment documents.” The employee’s argument that the employer violated the standalone disclosure provision of the FCRA by “presenting the disclosure together with other application materials… stretches the statute’s requirements beyond the limits of law and common sense.”
  • The employer’s disclosure, which contained a brief notice and “employer logos and signature lines” was both “clear and conspicuous” which the Ninth Circuit has interpreted to mean “’a reasonably understandable form’ that is ‘readily noticeable to the consumer.’”
  • The employee’s argument that “co-presentation of the disclosure and authorization renders the disclosure neither clear nor conspicuous” was struck down by the court, which stated that “…applicants, such as big-rig truckers, can be expected to notice a standalone document featuring a bolded, underlined, capital-lettered heading.”
  • The court rejected the argument that the employer violated the FCRA by “failing to put the authorization in a clear and conspicuous, standalone document.” The court states, “FCRA dictates only that a consumer authorization be ‘in writing,’ without specifying its format.” The court also notes that “Crucially, the authorization subsection of the FCRA lacks the disclosure subsection’s standalone document requirement.”

The Luna decision provides employers with some helpful insights into FCRA disclosure and authorization requirements. Keep in mind that this decision only impacts jurisdictions within the Ninth Circuit. However, even though the direct impact may be limited to the Ninth Circuit, the court’s interpretations should still give employers enough to consider when crafting their disclosure and authorization forms.

Please consult with your legal counsel to follow and apply the latest court interpretations of the FCRA. They can help you make sure that your employment practices fit in with the latest FCRA-related court decisions and opinions.

The Ninth Circuit Takes on Background Report Disclosures (Again)… and Pre-Adverse Action Requirements Too

We have previously written about Gilberg v. California Check Cashing Stores, LLC, a recent decision by the Ninth Circuit Court of Appeals that dove into the disclosure requirements for employers that use background screening companies to get background reports (also known as consumer reports) on employees and applicants.

By now, you probably are aware of the Fair Credit Reporting Act’s (FCRA) disclosure requirements that were addressed in the Gilberg case. As a reminder, before obtaining a background report from a background screening company on an applicant or employee, an employer must:

  • 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

These disclosure requirements have been the source of confusion, debate, and multiple court interpretations.  The Ninth Circuit is adding to the debate yet again with its latest interpretation of these requirements in the recently decided Walker v. Fred Meyer, Inc. case.  To read the court’s decision, click here.

The Walker court found that some provisions of the defendant employer’s disclosure document did violate the standalone disclosure requirement of the FCRA, while other provisions did not.  Importantly, the court established a new standard for interpreting whether language in a disclosure document is extraneous.  According to the court’s decision, “…beyond a plain statement ‘that a consumer report may be obtained for employment purposes,’ some concise explanation of what the phrase means may be included as part of the disclosure…”

According to the court, this new “concise explanation” standard may allow additional information to be provided in the disclosure document, potentially including:

  • A brief description of what a consumer report entails;
  • How the consumer report will be obtained; and
  • For which type of employment purposes it may be used.

While this decision does make an allowance for some concise, explanatory language to be included in FCRA-required disclosure document, the court also noted that the sky isn’t the limit. Employers should be aware that too much information in a disclosure document is still a violation of the FCRA’s standalone disclosure requirement.

The court held that language in a disclosure document “…included in good faith in order to provide additional useful information about an applicant’s rights to obtain and inspect information about … [the background screening company’s] investigation of, and file about, the applicant” constitutes a violation of the FCRA, as “[t]his language, however, may ‘pull the applicant’s attention away from his privacy rights protected by the FCRA by calling his attention to the rights’ that he has to inspect … [his] files.”

In addition to the in-depth discussion of an employer’s FCRA disclosure requirements, the court also briefly touched on an employer’s pre-adverse action requirements under the FCRA.  For details on pre-adverse and adverse action requirements, you may want to visit our previous discussion on this topic here.  The Walker court held that the FCRA’s pre-adverse action requirements do not require that an applicant/employee be provided an opportunity to discuss their consumer report directly with the employer before adverse action is taken.

The Walker decision impacts the jurisdictions within the Ninth Circuit.  However, it may not be a stretch to imagine that other courts could adopt the Ninth Circuit’s standards for FCRA disclosure and pre-adverse action compliance.  This case should give employers more to think about when they’re putting together their disclosure forms, as well as pre-adverse action notices.  Of course, it’s always a good idea to discuss your employment practices with your legal counsel to make sure all your documents and employment practices fit with the latest court interpretations of applicable laws.

FTC Takes Action Against Using Consumer Reports for an Impermissible Purpose

We have previously touched on the Fair Credit Reporting Act (FCRA) requirement to have a permissible purpose to obtain a background report (called a “consumer report” under the FCRA).  As we talked about, there are a number of permissible purposes defined in the FCRA including, employment purposes or for certain credit transactions.

We also discussed the Federal Trade Commission’s (FTC) advice for a company that was thinking about using a consumer report for more than one permissible purpose.  But what about using a consumer report for an impermissible purpose?

Just as in our previous article, the FTC has some advice for this scenario, too: Don’t do it.

The FTC announced a settlement with a California-based mortgage broker to settle allegations that the mortgage broker violated the FCRA by using consumer report information for an impermissible purpose, among other claims.

In its complaint, the FTC alleged that the mortgage broker took private information from consumer reports and posted it on the publicly-available review site Yelp. The FTC claimed this was done as a response when a consumer left a negative review of the company on the site.

According to the FTC’s complaint, “…the FCRA enumerates the permissible purposes for which a consumer report may be used.  Section 604(f) of the FCRA, as amended by the FACT Act, makes it unlawful to use a consumer report for any purpose other than those enumerated.”  The complaint goes on to allege that “None of the Yelp responses [by the mortgage broker] containing [consumer] report information was communicated in connection with any pending credit decision related to the reviewing consumer, or for any other permissible purpose…”

As Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, stated in the press release announcing the settlement, “Companies that use [consumer] reports and scores have a legal obligation to keep that information confidential.  They should not disclose that information to third parties without a legitimate reason to do so, and they certainly should not post that information on the internet to embarrass or punish consumers, as happened here.”

Using consumer report information for a permissible purpose is important, and the FTC is taking enforcement action when a company uses a consumer report for impermissible purposes.  The mortgage broker in this case wound up having to pay $120,000 to settle the FTC complaint, in addition to having other prohibitions imposed on it.

Ensure that you’re using consumer reports for a permissible purpose.  Are you unsure if you’re using them for an impermissible purpose?  It may be a good idea to discuss your use of consumer reports with your legal advisors to make sure you’re staying in compliance with the FCRA and other applicable laws.

Litigation Update: Waterloo, Iowa Ban the Box Ordinance

In previous articles, we have discussed both the Ban the Box ordinance passed by the City of Waterloo, Iowa and the lawsuit relating to the ordinance filed against the city by the Iowa Association of Business and Industry (IABI)). There have been new developments in the IABI’s legal challenge to the city’s Ban the Box ordinance.

In a recent Black Hawk County, Iowa, District Court decision (available here), Senior Judge Bauercamper ruled against the IABI in its lawsuit.  granted the City of Waterloo’s motion for summary judgment, agreeing with the city that there are no facts to support the case against brought by the IABI.

According to the Court’s decision, the IABI claimed that Iowa state law limiting the powers of cities “specifically preempt[s] the authority of the City of Waterloo to adopt any regulations regarding the information about a prospective employee’s criminal history that the employer can request, collect, and use in making a decision whether to hire a job applicant” and that, therefore, the City of Waterloo’s ordinance is invalid.  The court noted that the City of Waterloo disagreed with the IABI, claiming that Iowa’s Civil Rights Act gave it the authority to enact the ordinance.

The court sided with the City of Waterloo, concluding that the Ban the Box ordinance is permissible under the Iowa Civil Rights Act. It stated, “The ordinance is consistent with the authority given to cities by … [the Iowa Civil Rights Act] to provide ‘broader or different categories of unfair or discriminatory practices.’”  The court noted that, “Criminal history considerations have been shown to have a disparate impact on minority groups, especially African Americans, as disclosed by the studies presented to the Waterloo City Counsel when …  [the Ban the Box ordinance] was proposed.  These findings support the conclusion that the ordinance does not conflict with state employment law as expressed in the Iowa Civil Rights Act.”

After the ruling, the IABI stated that, “A district court judge… ruled for the City of Waterloo on its local criminal history ordinance that violates the state’s preemption statute.  IABI was profoundly disappointed in the ruling and has already filed our intent to appeal.”  To read the press release from the IABI, click here.

The litigation is currently ongoing.  According to Iowa Courts online records, an appeal has been filed with the Iowa Court of Appeals, assigned Appellate Court Docket Number 20-0575.

The Ban the Box ordinance is scheduled to become effective on July 1, 2020.

Verified Credentials will continue to monitor the ongoing litigation surrounding the City of Waterloo, Iowa Ban the Box ordinance and will provide updates as they become available.

Thinking About Adverse Action? Make a Plan!

If you use a third-party agency to provide you with background reports (which are also referred to as “consumer reports”), you may want to familiarize yourself with the Fair Credit Reporting Act (“FCRA”), a federal law that places certain obligations on users of consumer reports.

If you decide to take adverse action against an individual based, in whole or in part, on any information from a consumer report, you should be aware of additional obligations that you may have under the FCRA. Fortunately, the Federal Trade Commission (“FTC”), a federal agency tasked with enforcing the FCRA, has provided a brief overview of some of the obligations a user of consumer reports may have on their website.

According to the FTC, a user of consumer reports is required to provide notice of the adverse action to the consumer at the time the adverse action is taken. The notice can be provided orally, electronically, or in writing and “tells people about their rights to see information being reported about them and to correct inaccurate information.” The adverse action notice must include:

    • the name, address, and phone number of the consumer reporting company that supplied the report;
    • a statement that the company that supplied the report did not make the decision to take the unfavorable action and can’t give specific reasons for it; and
    • a notice of the person’s right to dispute the accuracy or completeness of any information the consumer reporting company furnished, and to get an additional free report from the company if the person asks for it within 60 days.

    This adverse action notice is required for any adverse action you may take, regardless of the reason why you obtained the consumer report.

    But, if you use consumer reports for employment purposes, you may have additional obligations before you can take adverse action (or even send out the adverse action notice)!

    Users of consumer reports for employment purposes are required to provide their employees and applicants with a pre-adverse action notice before taking adverse action. According to the FTC, before you reject a job application, reassign or terminate an employee, deny a promotion, or take any other adverse employment action based on information in a consumer report, you must give the applicant or employee:

      • a notice that includes a copy of the consumer report you relied on to make your decision; and
      • a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act.”

      The FTC states that “giving the person the notice in advance gives the person the opportunity to review the report and tell you if it is correct.”

      Additionally, employers cannot take adverse action immediately after providing a pre-adverse action notice. Instead, employers must wait a “reasonable amount of time” before taking adverse action against an employee or applicant after providing a pre-adverse action notice.

      What constitutes a reasonable amount of time? The FCRA doesn’t provide an exact timeline. According to an FTC advisory opinion, the wording of the FCRA mandates that some period of time elapse between the pre-adverse action disclosure and the employment action that triggers the adverse action notice. The FTC’s best advice is that “employers may wish to consult with their [legal] counsel so that they develop procedures that are appropriate, keeping in mind the clear purpose of the provision to allow consumers to discuss reports with employers or otherwise respond before adverse action is taken.”

      To recap, if you’re an employer that is contemplating taking adverse action against an employee or applicant based, in whole or in part, on information from a consumer report, do the following steps: (1) Provide a pre-adverse action notice to the employee or applicant; (2) Wait a reasonable amount of time; and (3) Provide an adverse action notice to the employee or applicant, if applicable.

      Of course, this is just a broad overview of the FCRA’s adverse action process. The FCRA, and state and local laws, may place additional obligations on users of background reports. Be sure to talk with your legal counsel to make sure that your adverse action plan is compliant with all applicable laws.

Columbia, SC Amends their Ban the Box Law

We had previously discussed a Ban the Box law in Columbia, South Carolina, that went into effect in August 2019.

As mentioned in our previous industry note, the Columbia law placed various restrictions and obligations on employers. Significantly, the original law defined an employer as “…the City, private employers, and government contractors; and any person regularly employing five or more persons; any person acting as an agent of an employer, directly or indirectly; or any person undertaking for compensation to procure employees or opportunities for employment.”

For some, this definition of an employer appeared to conflict with the purpose of the Columbia Ban the Box law, which stated that: “[t]he purpose of this article is to ensure that the hiring practices of the City of Columbia do not, and urge private employers and government contractors doing business with the City of Columbia, to not unfairly deny people with arrest and conviction records employment…”

This seeming discrepancy created some confusion among employers, specifically whether the Ban the Box restrictions and obligations were meant to impact private employers or only the City government.

In response to the confusion, the City recently amended the definition of an employer in their Ban the Box law.

The change to the law, which was approved unanimously after a second reading on December 3, 2019, now states:

Employer means the City of Columbia as a municipal corporation.”

The new definition no longer contains references to private employers, government contractors, persons employing five or more persons, agents of employers, or persons undertaking for compensation to procure employees or opportunities for employment. The history of the amendment, including a link to a downloadable copy of the change, can be found on the City’s website.

This definition changes who the Columbia, SC Ban the Box law restrictions and obligations impact. You may want to chat with your legal advisor about this change to determine how it might impact you.

U.S. House of Representatives Passes FCRA-Amending Bill: The Comprehensive CREDIT Act of 2020

On January 29, 2020, the United States House of Representatives passed the “Comprehensive Credit Reporting Enhancement, Disclosure, Innovation, and Transparency (CREDIT) Act of 2020” (the “Act”).

The Act contains a number of provisions that could amend the Fair Credit Reporting Act (“FCRA”) in drastic ways.

Importantly, for employers, one of the Act’s sections places restrictions on when, or if, an employer can perform a credit check on their applicants and employees for employment purposes. The Act’s provisions state:

(A) IN GENERAL. —A person may use a consumer report for employment purposes with respect to any consumer in which any information contained in the report bears on the consumer’s creditworthiness, credit standing, or credit capacity only if—

(i) (I) the person is required to obtain the report by a Federal, State, or local law or regulation;
(II) the information contained in the report is being used with respect to a national security investigation (as defined in paragraph (4)(D)); or
(III) the report is necessary for a background check or related investigation of financial information that is required by a Federal, State, or local law or regulation;

(ii) none of the cost associated with obtaining the consumer report will be passed on to the consumer to whom the report relates; and

(iii) the information contained in the consumer report will not be disclosed to any other person other than—
(I) in an aggregate format that protects a consumer’s personally identifiable information; or
(II) as may be necessary to comply with any applicable Federal, State, or local equal employment opportunity law or regulation.

The Act would also require employers to provide additional, specific disclosures if a credit report is used by a person for employment purposes:

(B) DISCLOSURES. —A person who procures, or causes to be procured, a consumer report described in subparagraph (A) for employment purposes shall, in the disclosure made pursuant to paragraph (2), include—

(i) an explanation that a consumer report is being obtained for employment purposes; (ii) the reasons for obtaining such a report; and (iii) the citation to the applicable Federal, State, or local law or regulation described in subparagraph (A)(i)(I).

Furthermore, the Act creates particular requirements if adverse action is taken based on the information in a credit report:

(C) ADVERSE ACTIONS.—In using a consumer report described in subparagraph (A) for employment purposes and before taking an adverse action based in whole or in part on the report, the person intending to take such adverse action shall, in addition to the information described in paragraph (3), provide to the consumer to whom the report relates—

(i) the name, address, and telephone number of the consumer reporting agency that furnished the report (including, for a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis, a toll-free telephone number established by such agency); (ii) the date on which the report was furnished; and (iii) the specific factors from the report upon which the adverse action (as defined in section 603(k)(1)(B)(ii)) was based.

The full text of the Act and its current status can be found on Congress’ website. These proposed amendments to the FCRA are only a portion of the Act. You may want to discuss the Act with your attorney to determine if, or how, any provisions might impact you if the Act does become law.

It is important to note that the Comprehensive CREDIT Act of 2020 has not yet become law. Verified Credentials will continue to monitor the Act and will provide updates as they become available.

Appeals Court Upholds Philadelphia Salary History Ban

Salary History Bans have been passed in multiple cities and states throughout the country. We have reported on recently enacted Salary History Bans in New York, New Jersey, and Cincinnati, Ohio. Philadelphia, Pennsylvania is the latest place to have Salary History Ban activity.

Initially signed into law on January 23, 2017, as a means to address pay disparities impacting women and minorities, Philadelphia’s Salary History Ban ordinance was subject to a lawsuit upon its passage. Enforcement of parts of the ordinance were reviewed by a United States District Court in 2018, with the District Court concluding that one provision (referred to as the “Inquiry Provision”) of the Salary History Ban ordinance violated the First Amendment of the United States Constitution (to read the full District Court opinion, click here).

In a decision published in February 2020, the Third Circuit Court of Appeals disagreed with the District Court. The Third Circuit stated that, “The City enacted the Inquiry Provision in an attempt to address this persistent problem [pay disparities impacting women and minorities] and the record is clearly sufficient to withstand this First Amendment challenge to it.” To read the full Third Circuit opinion, click here.

What could this mean for employers? Under the Philadelphia Salary History Ban ordinance, it is an unlawful employment practice, with some exceptions, for an employer, employment agency, or employee or agent thereof:

    • To inquire about a prospective employee’s wage history, require disclosure of wage history, or condition employment or consideration for an interview or employment on disclosure of wage history, or retaliate against a prospective employee for failing to comply with any wage history inquiry or for otherwise opposing any act made unlawful by this Chapter.
    • To rely on the wage history of a prospective employee from any current or former employer of the individual in determining the wages for such individual at any stage in the employment process, including the negotiation or drafting of any employment contract, unless such applicant knowingly and willingly disclosed his or her wage history to the employer, employment agency, employee or agent thereof.

    To read the Philadelphia Salary History Ban ordinance, click here.

    With the Third Circuit opinion upholding the legality of the Salary History Ban ordinance, it may be a good idea to check with your legal counsel to determine if this ordinance applies to you.

Grand Rapids, MI Enacts “Ban the Box”- Style Restrictions

We have previously reported on multiple recently enacted Ban the Box laws, both at the state and municipal levels. As you may know, Ban the Box laws often feature restrictions that prevent employers from asking about a job candidate’s criminal history early in the hiring process. The city of Grand Rapids, Michigan has recently joined the “movement,” with their own Ban the Box-style restrictions, which became effective on December 1, 2019. And the city did this despite a 2018 Michigan state law that restricts counties and cities in Michigan from passing Ban the Box ordinances.

According to state law:

“A local governmental body shall not adopt, enforce, or administer an ordinance, local policy, or local resolution regulating information an employer or potential employer must request, require, or exclude on an application for employment or during the interview process from an employee or a potential employee. This section does not prohibit an ordinance, local policy, or local resolution requiring a criminal background check for an employee or potential employee in connection with the receipt of a license or permit from a local governmental body.” (Full text available here).

How did Grand Rapids circumvent the Michigan state law? By placing their Ban the Box restrictions in a new “Human Rights Ordinance”. The ordinances states:

    • The opportunity to obtain employment and advancement opportunities without discrimination on the basis of actual or perceived membership in a protected class as identified in Section 9.955 of this Chapter is hereby recognized and declared to be a civil right. No person shall discriminate against a current or prospective employee with respect to hire, tenure, terms, conditions, or privileges of employment, or any matter directly or indirectly related to employment, unless such act is based on a bona fide occupational qualification.
    • Bona fide occupational qualifications include: (b) Conviction Record. History of criminal conviction may be considered in employment decisions, although arrest with no conviction may not be considered. An outright ban on prospective employees with a criminal background is prohibited. Employers must carefully consider, on a case-by-case basis, the nature and severity of the crime, the age of the individual at the time of the crime, whether there have been repeat offenses, whether the individual maintained a good employment history before or after the conviction, evidence of rehabilitation efforts, and whether the crime for which the individual was convicted may pose a demonstrable risk to the health, safety or welfare of other employees or persons or to property.

    In addition to employers, individuals screening potential tenants should be mindful of Grand Rapids’ Human Rights Ordinance, as well. The ordinance also states:

      • The opportunity to purchase, lease, rent, sell, use, convey, and finance housing without discrimination on the basis of actual or perceived membership in a protected class as identified in Section 9.955 of this Chapter is hereby recognized and declared to be a civil right.
      • In addition to the exemptions contained in Chapter 160 of the City Code, the following considerations may result in exceptions to discriminatory housing practices: (b) Conviction Record. History of criminal conviction may be considered in housing decisions, although arrest with no conviction may not be considered. An outright ban on prospective tenants with a criminal background is prohibited. Landlords must carefully consider, on a case-by-case basis, the nature and severity of the crime, the age of the individual at the time of the crime, whether there have been repeat offenses, whether the individual maintained a good tenant history before or after the conviction, evidence of rehabilitation efforts, and whether the crime for which the individual was convicted may pose a demonstrable risk to the health, safety or welfare of other residents or persons (which would include manufacturing or distributing illegal drugs) or to property.

      The full text of the Human Rights Ordinance can be found here (employment restrictions can be found in Section 9.959 and housing restrictions can be found in Section 9.958 of Chapter 176 of the Grand Rapids, Michigan Code of Ordinances).

      Because the Grand Rapids Ban the Box-style restrictions are tucked into an anti-discrimination law, instead of a traditional Ban the Box law, the restrictions on using criminal history information can be easy to overlook. You may want to carefully review this ordinance with your legal advisors to determine whether these restrictions apply to you.

New Version of Form I-9 Released

You probably know that all employers need to complete a Form I-9 for all newly hired employees to verify their identities and authorization to work in the United States. There have been multiple versions of the Form since it was introduced in 1987. You and other employers may have been on the watch for the latest Form since the agency tasked with maintaining the Form, the United States Citizenship and Immigration Services (USCIS), instructed employers to continue using a previous version of the form (Form I-9 07/17/17 N) past its stated expiration date of August 31, 2019.

The wait is over! The USCIS recently announced the next version of the Form is ready for employers to use. Download the latest version of the Form I-9 here ››

According to a statement from the USCIS, the agency published the Form I-9 Register Notice on January 31, 2020, announcing a new version of Form I-9. The Form I-9 Register Notice states there have been a few changes to the previous version, as well as changes to the instructions for the Form. For example, in the new form instructions, USCIS clarified who can act as an authorized representative on behalf of an employer and updated the USCIS website addresses, among other changes.

Along with the statement, the USCIS released some additional key information to help employers make sure they’re using the correct version of the Form:

      • The latest, and current, version is titled “Form I-9 10/21/2019” and expires on October 31, 2022.
      • Employers should begin using the latest version (Form I -9 10/21/2019) on January 31, 2020.
      • There is a grace period. Employers can continue to use the previous version of the Form (Form I-9 07/17/2017 N) until April 30, 2020.
      • After April 30, 2020, employers can only use the latest version (Form I -9 10/21/2019).

      The latest version of the Form, as well as instructions to use the latest version, have been posted on the USCIS website. For other information on the Form, as well as the latest announcements from the USCIS, Verified Credentials suggests that you visit USCIS’ official “I-9 Central” resource.

      Even though I-9 Central provides great updates for employers, making any changes to your employment forms and documents should always be done with the advice of your legal counsel to ensure that you stay compliant.

Waterloo, Iowa Facing Lawsuit Over “Ban the Box”

We previously discussed the Ban the Box ordinance recently passed in Waterloo, Iowa.

On January 2, 2020, the Iowa Association of Business and Industry (IABI) filed a lawsuit against the city of Waterloo, alleging that the Waterloo ordinance violates Iowa state law.

The IABI, in its petition, specifically states that the ordinance is a violation of Iowa Code section 364.3(12)(a).  According to the court documents filed by the IABI, Iowa Code section 364.3(12)(a) “provides that ‘a city shall not adopt’ any ordinance ‘providing any terms or conditions of employment that exceed or conflict with the requirements of federal or state law… relating to hiring practices… or other terms or conditions of employment.’”

The petition goes on to say that “the 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 IABI is requesting that the Court prohibit the city of Waterloo from enforcing the ordinance, as well as declare that the ordinance violates both the Iowa Code and the Iowa Constitution.

To read the full text of the petition filed in Black Hawk County, Iowa, click here.

According to a press release issued by the IABI, “the lawsuit follows a letter that the IABI submitted to the city during the discussion phase stating the violation of state law and requesting they reconsider the ordinance.”  The letter sent to the city council is available as an addendum in the petition linked above.

Litigation is still ongoing.  Verified Credentials will continue to monitor the Ban the Box ordinance in Waterloo, as well as the ensuing lawsuit, and will attempt to provide updates as they become available.

Federal “Fair Chance Act” Enacted

We have previously covered “Ban the Box” laws in multiple jurisdictions, including both statewide laws, such as the law in Colorado, and municipal ordinances, including Waterloo, Iowa, Columbia, South Carolina, and Saint Louis, Missouri.

The federal government has recently passed legislation implementing its own Ban the Box style law. The federal “Fair Chance Act” was signed into law on December 20, 2019 as part of the National Defense Authorization Act for Fiscal Year 2020.

The Fair Chance Act prohibits, with some exceptions, federal executive agencies from inquiring about an applicant’s criminal history record information prior to making a conditional offer of employment i.e. an employment offer conditioned on the results of a criminal history inquiry, stating that:

[A]n employee of an agency may not request, in oral or written form (including through the Declaration for Federal Employment (Office of Personnel Management Optional Form 306) or any similar successor form, the USAJOBS internet website, or any other electronic means) that an applicant for an appointment to a position in the civil service disclose criminal history record information regarding the applicant before the appointing authority extends a conditional offer to the applicant.

This prohibition extends to all legislative and judicial agencies as well as executive agencies.

The Fair Chance Act also extends the restrictions on criminal history record information inquiries to federal contractors, with some exceptions. According to the act,

[A]s a condition of receiving a Federal contract and receiving payments under such contract … the contractor may not verbally, or through written form, request the disclosure of criminal history record information regarding an applicant for a position related to work under such contract before the contractor extends a conditional offer to the applicant.

To read the full text of the Fair Chance Act, click here. The Fair Chance Act starts at Section 1121 on page 408.

The Fair Chance Act will become effective in December, 2021. When it becomes effective, the Fair Chance Act will only apply to federal agencies as outlined above and entities that have contracts with the federal government. You may want to review this proposed law with your legal counsel to determine if it applies to you.

Salary History Ban Coming to Cincinnati

Starting in 2020, Cincinnati, Ohio will join jurisdictions such as New York and New Jersey in adopting a “Salary History Ban”. Salary History Bans typically restrict when, or if, an employer can ask an applicant about the applicant’s compensation history.

Under the Cincinnati Salary History Ban, it is unlawful (with some exceptions) for employers to:

  • Inquire about the salary history of an applicant for employment; or
    Screen job applicants based on their current or prior wages, benefits, other compensation, or salary histories, including requiring that an applicant’s prior wages, benefits, other compensation or salary history satisfy minimum or maximum criteria; or
  • Rely on the salary history of an applicant in deciding whether to offer employment to an applicant, or in determining the salary, benefits, or other compensation for such applicant during the hiring process, including the negotiation of an employment contract; or
  • Refuse to hire or otherwise disfavor, injure, or retaliate against an applicant for not disclosing his or her salary history to an employer.


The ordinance also requires employers, upon a reasonable request, to provide the pay scale for a position to an applicant who has been given a conditional offer of employment.

Even though inquiries about salary history may be restricted, employers may still engage in discussion with the applicant about their expectations with respect to salary, benefits, and other compensation, including but not limited to unvested equity or deferred compensation that an applicant would forfeit or have cancelled by virtue of the applicant’s resignation from their current employer.

The full text of the Salary History Ban can be found in the Cincinnati Code of Ordinances.

This ordinance will be effective beginning in April, 2020. This gives you some time to examine this new law with your legal advisors and determine how it may impact you. Verified Credentials will continue to monitor and provide updates as they become available.

Waterloo, Iowa: The First Iowa Jurisdiction to “Ban the Box”

The “ban the box” movement – featuring laws that often prevent employers from asking about a candidate’s criminal history early in the hiring process – continues to diffuse rapidly at state and local governments. We have previously discussed recent ban the box laws passed in Colorado and Columbia, SC, as well as a proposed law in St. Louis, MO.

Continuing this prevalent trend, the city of Waterloo, Iowa has recently passed its ban the box ordinance.

Effective July 1, 2020, the law states the following:

      • In connection with the employment of any person, it shall be an unlawful discriminatory practice for an employer to include a criminal record inquiry on any application. It shall further be an unlawful discriminatory practice for an employer who employs fifteen or more persons, but not private schools providing a regular course of instruction for any part of kindergarten through high school education, to engage in the following activity:
        • 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. The application process shall begin when the applicant inquires about the employment being sought and shall end when an employer has extended a conditional offer of employment to the applicant. If the applicant voluntarily discloses any information regarding his or her criminal record at the interview, the employer may discuss the criminal record disclosed by the applicant.
        • 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.
          To make an adverse hiring decision 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.
        • To make an adverse hiring decision based on an applicant’s criminal record without a legitimate business reason.

Waterloo’s new ordinance applies to employers who regularly employ one or more persons within the City of Waterloo. It does not apply to 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 municipal ordinance.

To read the full text of the new ordinance, click here. In the Table of Contents, go to “ORDINANCES PENDING CODIFICATION” then “UNFAIR USE OF CRIMINAL RECORD.”

Waterloo’s new ban the box law marks the first time an Iowa jurisdiction has passed an ordinance of this kind and reflects how these new laws are quickly expanding to many different states, counties, and cities.

Verified Credentials will continue to monitor and will attempt to detail any updates to the ordinance that may occur before it becomes effective in July 2020. With the rapidly changing ban the box landscape, it may be a good idea to speak with your legal counsel to make sure your background screening policies comply with all applicable laws.

Salary History Ban Coming to New Jersey

“Salary history bans” are increasingly being adopted by states and local jurisdictions, like an upcoming salary history ban in New York. We’re seeing the trend of salary history bands moving to New York’s neighbor next, the Eastern Seaboard state of New Jersey.

While the content and restrictions imposed by salary history bans differ between each state, county, or city that imposes them, these types of laws often restrict an employer’s ability to consider or ask about an employee or applicant’s previous salary history for employment purposes.

New Jersey is the latest state set to impose salary history consideration restrictions on employers.

Effective January 1, 2020, New Jersey’s salary history ban makes it an unlawful employment practice (with certain exceptions) for an employer to:

    • Screen a job applicant based on the applicant’s salary history, including, but not limited to, the applicant’s prior wages, salaries or benefits; or
    • Require that the applicant’s salary history satisfies any minimum or maximum criteria.

    An employer may, however:

      • Consider salary history in determining salary, benefits, and other compensation for the applicant, and may verify the applicant’s salary history, if the applicant voluntarily, without employer prompting or coercion, provides the employer with salary history. The applicant’s refusal to volunteer compensation information shall not be considered in any employment decisions.
      • Request that an applicant provide the employer with a written authorization to confirm salary history, including, but not limited to, the applicant’s compensation and benefits, after an offer of employment that includes an explanation of the overall compensation package has been made to the applicant.

      Verified Credentials will continue to monitor and attempt to provide updates regarding New Jersey’s salary history ban as they become available.  Remember, it’s never a bad idea to discuss these upcoming changes with your legal counsel to ensure your hiring complies with applicable law.

Unbiased Employment: Background Checks and the EEOC

As an employer that conducts background checks, you’re probably familiar with the federal Fair Credit Reporting Act (“FCRA”) and know that there’s certain obligations you may have under it (as well as under its state and local counterparts).

But did you know that by improperly using background checks, even if you fully comply with the FCRA to obtain those checks, you could find yourself in hot water with the Equal Employment Opportunity Commission (EEOC), the agency responsible for enforcing federal anti-discrimination laws.

In a joint statement with the Federal Trade Commission (FTC), one of the federal agencies that enforces the federal Fair Credit Reporting Act (FCRA), they want to make sure employers don’t use background information to discriminate against employees and applicants.

To read the full statement, click here.

According to the statement, when using background information to make employment decisions, “you must comply with federal laws that protect applicants and employees from discrimination. That includes discrimination based on race, color, national origin, sex, or religion; disability; genetic information (including family medical history); and age (40 or older).” This is true regardless of how you may receive the information. Even if you don’t partner with a background screening company, you should still be cautious that you don’t use background information you discover in a discriminatory manner.

To help employers think critically about their responsibilities under federal anti-discrimination laws, the EEOC has issued the following recommended guidelines:

    • Apply the same standards to everyone, regardless of their race, national origin, color, sex, religion, disability, genetic information (including family medical history), or age (40 or older).
    • Take special care when basing employment decisions on background problems that may be more common among people of a certain race, color, national origin, sex, or religion; among people who have a disability; or among people age 40 or older.
    • Be prepared to make exceptions for problems revealed during a background check that were caused by a disability.
  • Remember to keep the EEOC’s anti-discrimination guidelines in mind when conducting background checks for employment purposes, as well as any applicable state and local anti-discrimination guidelines. These laws may prohibit discrimination against classes of people that the federal anti-discrimination laws do not. It is always a good idea to double-check your practices with a trusted legal advisor to ensure that you’re not violating any federal, state, or local anti-discrimination laws. As the EEOC says, “In all cases, make sure that you’re treating everyone equally.”

 

One Background Report: One Permissible Purpose

What’s your reason for completing background checks? Is it to help you make educated hiring decisions? Or possibly for other business purposes? This distinction is essential because the Fair Credit Reporting Act (FCRA) includes restrictions on why background checks are obtained and used.

A user of a background check report, known as a consumer report under the FCRA, can only request and obtain that report on someone if they have a permissible purpose to do so.

A permissible purpose could be:

    • For employment;
    • For a legitimate business need in connection with a business transaction started by the consumer or to review an account to make sure a consumer still meets the terms of the account;
    • For underwriting insurance;
    • For certain credit transactions;
    • In accordance with the written instructions of the consumer;
    • And more.
  • But what if you want to use a background check for more than one permissible purpose? What if, for example, you want to use it for a legitimate business need and then for an employment decision? The Federal Trade Commission (FTC) has come out with advice for any person that’s thinking about “double-dipping”: Don’t do it.

    Whenever you get a background check from a screening provider, you have to certify that you have a single permissible purpose of doing so and identify what that lawful reason is. This, in turn, helps protect the candidate. When a candidate gets their copy of their background check results from a screening provider, they can see precisely what organization obtained the report and why. Using a background report for one purpose helps you, too. The FTC states, “getting a new consumer report when you have a new purpose helps your business ensure that you obtain the most current information about the consumer.”

    Have questions about how this might apply to you? Review the list of FCRA’s permissible purpose options with your legal advisor to identify your permissible purpose.

Improper Use? Macy’s Faces Allegations of Discrimination in Background Check Policies

When completing background checks, ensuring compliance with federal, state, and local consumer reporting laws is only one consideration for an employer. Employers should also keep anti-discrimination laws in mind.

Macy’s, Inc. is currently facing allegations of discrimination against job applicants and employees with criminal records in a pending class-action lawsuit.

The complaint against Macy’s alleges the following:

    • Disparate impact discrimination in violation of both Title VII of the Civil Rights Act of 1964 and the New York City Human Rights Law – The suit claims that “Macy’s criminal history screening policies and practices, which use applicants’ and employees’ criminal histories to screen and exclude them from obtaining and/or continuing employment, have a disparate impact on Black and Latino applicants and employees and are neither job related nor consistent with business necessity.”
    • Discriminatory denial and termination of employment based on criminal history information – The complaint alleges that “Macy’s denied employment … based on … criminal history information,” and by not considering an individual’s criminal history concerning certain mitigating factors, Macy’s violated that law and the New York City Administrative Code.
    • Additional violations of the New York City Human Rights Law and Administrative Code by inquiring into applicants’ criminal histories before extending conditional offers of employment.
  • Of course, the allegations leveled against Macy’s remain only 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.

    The claims leveled at Macy’s in this lawsuit should serve as a reminder to employers that potential background screening suits are not limited to FCRA or other consumer reporting law violations. Any employer that uses background checks for employment purposes should take care to ensure that their background screening policies comply with anti-discrimination laws as well. If you have any questions about whether your background screening program complies with such laws, it is highly recommended that you speak with trusted legal counsel.

Ban the Box Debated in St. Louis, MO

The ban the box movement has been gaining steam, with many jurisdictions passing laws in recent years. We have previously touched on the ban the box laws in Colorado and Columbia, South Carolina, and now, St. Louis, Missouri, looks poised to join the growing movement.

St. Louis has previous experience with the ban the box bandwagon. A 2013 city policy change no longer automatically disqualified applicants who had felony convictions from city employment. Then in 2014, the City of St. Louis no longer required applicants seeking city employment to check a box on an employment application if they had a felony conviction. Even the State of Missouri banned the box in 2016 for applicants seeking certain state government positions.

While the City of St. Louis may have some experience with ban the box, there is a relevant note for employers: ban the box in the city (and state) currently only applies to certain government positions. Private employers are not impacted by existing ban the box laws.

But that may be coming to an end.

Recently, St. Louis Alderman John Collins-Muhammad proposed expanding the city’s ban the box law to cover all employers. The Alderman’s proposal wouldn’t “prohibit hiring managers from asking about criminal history in interviews or doing a background check.” Instead, the proposal, known as Board Bill 120, would prohibit all employers in the City of St. Louis from:

    • Basing a hiring or promotional decision on a job applicant’s criminal history, unless the employer can demonstrate its relevance to that decision.
    • Inquiring about a job applicant’s criminal history until after it has been determined that the applicant is otherwise qualified for the job and has been interviewed; however, such an inquiry may be made of all job applicants who are in the final selection pool from which the job will be filled.
  • However, this wouldn’t apply to jobs which an employer is required by law to exclude an applicant based on their criminal history.

    This proposed bill has not yet become law. Verified Credentials will continue to monitor and attempt to provide updates on the proposed legislation as they become available. Of course, with the rapidly changing ban the box landscape, it’s always beneficial to speak with a trusted legal advisor before conducting criminal history checks to make sure that you’re complying with all applicable laws.

$54 Million Negligent Hiring Lawsuit Verdict Upheld

Avoiding risky hires takes more than just completing a background check to store in a candidate’s personnel file. It’s also essential to have policies and procedures in place with the help of trusted legal counsel to avoid hiring or retaining candidates that could put your business at risk.

In a recent case, an Illinois state appellate court affirmed a $54 million jury verdict against a trucking company. The case involved the negligent hiring and retention of a truck driver that, while on the job, was involved in a serious car accident that left a plaintiff with severe and permanent injuries.

According to court, the trucker’s driver’s qualification file, which included a background check, revealed that:

    • The trucker had never completed a truck driving course, even though he had a commercial driver’s license.
    • Within three years of his employment application, the trucker had been involved in four accidents, had three moving violations, and had his license suspended twice.
    • Four out of seven previous employers over the last ten years had terminated employment with the trucker.
    • In the seven years before his application, the trucker had been convicted of nine traffic-related offenses and four counts of felony reckless aggravated assault.
  • A safety coordinator testified that, based on the company’s safety standards, the trucker’s felony conviction would have automatically disqualified him from employment with the trucking company. The coordinator’s initial decision to reject this trucker’s application was overruled by a superior who admitted that the trucker was “…a marginal candidate” but that the company was “…forced to accept ‘marginal drivers’ in order to make a profit.”

    Additionally, the trucker did not attend mandatory company safety training, had multiple moving violations, and had his license suspended within the first nine months of his employment. The company still retained the trucker, even though company policy would have revoked his driving privileges because the company “never ran his motor vehicle report or monitored his license…” after hiring.

    This case should serve as a cautionary tale for employers. What are your guidelines for the use of background check information? It would help if you gave serious consideration to working with a trusted legal advisor to develop firm guidelines regarding the hiring and retention of employees and applicants based on your background checks. Maintaining a successful background screening program, with strict and well-identified policies and procedures for recruitment and retention, could help protect your company from negligent hiring claims and may help prevent tragedies like the accident that occurred in this case.

Beyond “Ban the Box”: Salary History Ban Passed in New York State

At this point, you may be familiar with the recent trend of “ban the box” laws popping up throughout many states and cities. Typically enacted by state or local governments, these laws often prevent employers from asking about an applicant’s criminal history early in the hiring process.

Did you know that some jurisdictions are going beyond “ban the box” and restricting questions on salary history? We’re starting to see an increase in states and cities that are adopting new “salary history ban” laws. These types of requirements may restrict an employer’s ability to consider or ask about an employee or applicant’s previous salary history for employment purposes.

The State of New York is one of the latest jurisdictions to pass a “salary history ban” law. Signed by Governor Cuomo on July 10, 2019, the new law with restrictions on salary history questions goes into effect on January 6, 2020. With certain exceptions, the new law prohibits employers from:

    • Using wage or salary history of an applicant to determine whether to offer them employment or in determining their wages or salary.
    • Requiring wage or salary history from the applicant or employee as a condition of employment, promotion, interview, or job offer.
    • Requesting an applicant’s wage or salary history from a current or former employer, its agent, or its employee.
    • Refusing to interview, hire, promote or otherwise employ or retaliating against an applicant or current employee based on prior wage or salary history, because they did not provide wage or salary history in accordance with the law, or because they filed a complaint with the State’s department of labor alleging a violation of the law.
  • To read the full text of the law, click here.

    There is still time to determine how this law may impact you and your hiring process before it goes into effect in January 2020. Verified Credentials will continue to monitor and provide updates regarding the law. Remember that it’s never a bad idea to talk with your legal advisors to ensure that your hiring process meets all your obligations and requirements.

The Ninth Circuit’s Take on Background Check Disclosures

The legal landscape surrounding background checks seems to be constantly changing. With the multitude of Fair Credit Reporting Act (FCRA) lawsuits filed recently, courts have had the opportunity to interpret many provisions of the FCRA.

Continuing this trend, the Ninth Circuit Court of Appeals dove into FCRA interpretation with Gilberg v. California Check Cashing Stores, LLC. The court looked at what may be one of the most debated and confusing obligations of the FCRA: the disclosure requirements for employers that use a background screening company to get background information on employees and applicants. You may remember that before obtaining background information from a background screening company on an applicant or employee, an employer must:

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 Consumer Report on the applicant/employee for employment purposes; and
Get the applicant/employee’s written consent to receive such report

In this case, after analyzing an employer’s disclosure document, the Ninth Circuit determined that it was NOT: (1) clear; and (2) in a document that consisted solely of the disclosure. To read the court’s decision, click here.

Some potential takeaways from the court’s analysis:

    • A document that consists solely of the disclosure means precisely that – there can be no surplus language whatsoever in the document. Even language that informs an employee or applicant of their rights under state law is too much. If the document has any content beyond the FCRA mandated disclosure language, it may not comply with the FCRA.
    • To determine whether the disclosure was “clear,” the court stated that clear means “reasonably understandable.” In this case, using terms like “all-encompassing,” having poor grammar and punctuation, and including state law information in the disclosure created a document that is not “reasonably understandable” (and not clear).
    • Having capitalized, bold, and underlined headings, easy-to-read labels, and all information on the front page, was enough for the Ninth Circuit to say the disclosure was clear.
  • The court’s decision may give employers some food for thought on what can, and more importantly, what can’t be in their disclosure forms. Mainly, it may not be unreasonable to think that other courts could adopt the Ninth Circuit’s standards for FCRA compliance. Of course, it’s always a good idea to discuss your disclosures with trusted legal counsel to make sure that your documents fit in with current court interpretations of all applicable laws.

Consumer Reports & Investigative Consumer Reports: Separate Disclosures?

We’ve previously talked about one keystone obligation of employers under the Fair Credit Reporting Act (FCRA), background check disclosures and authorizations.

Before requesting a background check on an applicant, the employer has to share specific documents with the employee or applicant.

      • Those include a clear and conspicuous written disclosure, in a document consisting solely of the disclosure, that the employer may obtain a Consumer Report (aka background check) on the applicant or employee for employment purposes.
      • The employer must get written consent from the applicant or employee to receive such a report too.

      But did you know there different kinds of disclosures for different types of background checks? If not, let’s get you caught up on what you’ve been missing.

      There are additional disclosure requirements under the FCRA for Investigative Consumer Reports, which are specific types of Consumer Reports. The FCRA says that an Investigative Consumer Report includes information on the employee or applicant obtained through personal interviews with their neighbors, friends, or associates – including previous employers.

      An employer cannot get an Investigative Consumer Report on an employee or applicant unless it also:

          • Clearly and accurately discloses to the employee or applicant in writing that it may obtain an Investigative Consumer Report, including information from the referenced personal interviews as to their character, general reputation, personal characteristics, and mode of living;
          • Provides the disclosure to the employee or applicant within three days of requesting the report; and
          • Includes a statement in the disclosure informing the employee or applicant of their right to request additional disclosures and a written summary of rights, as provided by the FCRA.

      An employer who wants to obtain an Investigative Consumer Report on an applicant or employee must provide them with both the Consumer Report and Investigative Consumer Report disclosures. Some employers have decided to combine both of these disclosures into one document to cover all the bases. That is not a good idea, according to a recent case decided in the District of Idaho (Mitchell v. Winco Foods, LLC).

      Remember that a Consumer Report disclosure must be in a document consisting solely of the disclosure? In the Mitchell v. Winco Foods, LLC case, the court found that adding Investigative Consumer Report disclosure information in a Consumer Report disclosure violates the FCRA’s Consumer Report standalone disclosure requirement. The court indicated that any employer who intends to obtain an Investigative Consumer Report on an employee or applicant for employment purposes should provide them with two disclosures – a Consumer Report Disclosure and an Investigative Consumer Report Disclosure.

      This is just one case. Still, if you are including reference checks and employment history verifications in your background checks for employees and applicants, you may consider keeping two separate disclosures just that, separate.

      Not sure where to start? Verified Credentials makes sample disclosures for both Consumer Reports and Investigative Consumer Reports available in our Resource Library. Log in to download the sample to discuss your disclosure requirements and plan with your legal counsel.

City Laws Matter Too: Columbia, SC Enacts “Ban the Box”

Keeping track of the laws impacting the hiring process can be a challenge for any employer. In addition to federal regulations, like the Fair Credit Reporting Act (FCRA), state and even local laws can often impose legal requirements on employers attempting to hire or perform background checks.

The ban the box movement is quickly building momentum, with several state and local jurisdictions enacting laws that often place restrictions on when, or if, an employer can inquire about their employees’ or applicants’ criminal histories. For example, the City of Columbia, South Carolina has enacted its version of a “ban the box” law that went into effect in August 2019.

Some highlights of the recently enacted ban the box law in Columbia are:

    • An employer can only conduct a background check on an applicant if it has made a “good faith determination” that background information is relevant to the position or if a background check is required by law.
    • If a job requires a background check, the job posting and description may need to contain specific language regarding conviction history.
      Job applications cannot ask about an applicant’s conviction history.
    • Some criminal records may not be used or accessed for an employment background check. Restricted records include arrests without conviction; sealed, dismissed or expunged convictions; misdemeanors where jail time cannot be imposed; and infraction records.
    • An employer may request an applicant’s criminal history only after the applicant has received a conditional job offer.
    • An employer must provide an applicant a “notice of rights” under the law, a conditional offer letter, and a request for authorization to conduct a background check, if so required, before a criminal history check.
    • If an employer is considering taking adverse action against an applicant based on conviction history, the employer must provide the applicant with a pre-adverse action notice with language prescribed by the law and the criminal history report. The employer must also conduct an individualized assessment of the applicant.
    • If an employer takes adverse action against an applicant based on conviction history, they must inform the applicant of the decision and eligibility for other positions.
  • To read the full ordinance, click here: Ordinance No.: 2019-022

    This latest law demonstrates that even local laws can have an impact on an employer’s hiring process. Verified Credentials will continue to monitor any significant changes in ban the box laws. If you have any questions about how Columbia’s ban the box law may impact your hiring processes, you may want to speak to your legal counsel.

Is Your FCRA Summary of Rights Document Up-to-Date?

As an employer that conducts background checks, you’re probably familiar with the federal Fair Credit Reporting Act (FCRA) and know that there are certain obligations you may have under it (as well as under its state and local counterparts).

You’re probably well aware that, when ordering an FCRA regulated background report (called a “consumer report” under the FCRA) for employment purposes, the FCRA indicates that you, the employer, need to provide your applicants and employees with certain notices and forms at specific times. For example, before you take adverse action (refusing to hire, terminating, etc.) against an applicant or employee due to information in a consumer report, the FCRA says you should provide them with:

    • A copy of their report; and
    • A written description of their rights under the FCRA
  • Trying to create this written description of rights may sound like an impossible task for anyone except an FCRA-attorney. Fortunately, the Consumer Financial Protection Bureau (CFPB), a federal consumer protection agency tasked with enforcing the FCRA, has done the heavy lifting for you and created a model description for employer use, titled “A Summary of Your Rights Under the Fair Credit Reporting Act.” Providing an applicant or employee with the model description at appropriate times can help ensure that you are taking steps to comply with the FCRA.

    Did you know, though, that the “Summary of Rights” was recently changed? In 2018, the FCRA was amended to include, among other things, provisions regarding the placement of national security-freezes on consumer reports. The amendment, effective as of September 21, 2018, requires that applicants and employees receive a notice regarding security freezes at any time they receive a “Summary of Rights.” In response to the amendment, the CFPB released an updated Summary of Rights for employers to use. Find the newest version on the CFPB’s website or by clicking here.

    So, you may want to make sure that your Summary of Rights document is up-to-date and contains the latest required information.

    Navigating the obligations that you have as an employer can be extremely difficult, not to mention trying to keep track of any changes in the law! In this post, Verified Credentials, as a trusted background screening provider, is trying to help you keep track of some changes in the legal landscape surrounding consumer reports. Of course, however, nothing should substitute talking with your legal counsel about your obligations under federal and state background screening laws to ensure you remain in compliance.

Delta Airlines Settles FCRA Disclosure & Authorization Class Action Lawsuit for $2.3 Million

Employers should be wary of the increasing number of Fair Credit Reporting Act (FCRA) lawsuits brought against them. The FCRA is full of potential obligations for employers that obtain FCRA regulated background reports (called “consumer reports” under the FCRA) on their applicants and employees. It can be challenging for employers to determine whether they are meeting all their obligations under the FCRA (as well as under comparable state and local laws).

In a recent case, Schofield v. Delta Air Lines, Inc., No. 3:18-cv-00382-EMC, USDC, ND Cal., Feb. 27, 2019, Delta Air Lines, Inc. (Delta) was accused of, among other things, obtaining consumer reports on applicants and employees without providing them with proper disclosures and without receiving appropriate authorizations in violation of the FCRA (as well as California state law). The lawsuit alleged that Delta’s disclosures were not clear and unambiguous, contained extraneous information, and were not in stand-alone documents.

Some quick facts about the lawsuit, and the settlement agreement:

    • The potential class included approximately 41,000 current and former Delta applicants and employees.
    • Delta agreed to settle the lawsuit for $2.3 million.
    • The total settlement could increase if the class grows any larger – if the class exceeds 46,000 current and former applicants and employees, Delta agreed to supplement the settlement fund by $50 per person for each person in excess of 46,000.
  • To read the full settlement agreement, click here.

    This case, with its large settlement amount, should serve as a cautionary tale for all employers: if you are going to obtain consumer reports for employment purposes, be sure that you:

      • Provide the applicant/employee with a clear and conspicuous disclosure in a document that consists solely of the disclosure that you may obtain a consumer report about them for employment purposes;
      • Get written authorization from the applicant/employee to obtain the consumer report; and
      • Comply with any other employer obligations under the FCRA and applicable state and local law.
    • Verified Credentials will continue to notify you of any significant changes in the laws, or major lawsuits, surrounding background checks as it becomes aware of them. However, as always, you should discuss your background screening program with your legal counsel to make sure that you remain on the right side of the developing area of background screening law.

“Ban the Box” Comes to Colorado

By now, you have likely heard of “Ban the Box” laws. Typically enacted by state or local governments, these laws often prevent employers from asking about an applicant’s criminal history early in the hiring process. The ban the box movement has been gaining steam, with many jurisdictions passing these types of laws in recent years.

Colorado is the latest state to join the movement, passing its own version of a ban the box law earlier this year. Titled the “Colorado Chance to Compete Act,” the law went into effect on September 1, 2019 (for employers with 11 or more employees; the law will be effective for all employers September 1, 2021).

The Colorado Chance to Compete Act prohibits employers* from:

    • Advertising that a person with a criminal history may not apply for a position;
    • Placing a statement in an employment application that a person with a criminal history may not apply for a job; or
    • Inquiring about or requiring disclosure of an applicant’s criminal history on an initial application.
  • To read the law, click here: House Bill 19-1025. For more information about the law from the Colorado legislature, click here: Limits on Job Applicant Criminal History Inquiries.

    What could this mean for you? If you are required to comply with the new law, don’t indicate that individuals with criminal histories are not allowed to apply (either in advertisements for the job or in your employment applications). And don’t ask an applicant about their criminal history on an initial application. This law doesn’t mean that you can’t perform a background check on your applicants, but it could potentially mean that you need to perform your criminal record checks later in the hiring process.

    Employer, as defined by the new law, includes “agents, representatives, and designees” of the employer. This is a broad definition that may include your employees acting on behalf of your company. It isn’t enough to make sure your employment applications and documents comply. You need to make sure your employees are aware of the law and comply with it as well.

    As always, this is just a notification from Verified Credentials of changes to the legal landscape surrounding the hiring and background check process. It would be best if you always discussed any changes to your hiring process with your legal counsel to ensure you remain compliant with all laws.

    * Certain employers are exempt from all or some of the law’s restrictions. For more information on this, click on the link to House Bill 19-1025 above.

Form I-9 Update

Employers need to complete a Form I-9 for all newly hired employees to verify their identities and authorization to work in the United States. However, keeping track of all versions of the Form can be difficult. There have been multiple versions since the Form was first introduced in 1987 (view a list of all Form versions here).

There is only one currently valid Form version that should be used by employers – “Rev. 07/17/2017 N”. To check and make sure that the Form your company is using is up-to-date, look at the lower-left corner of any page of the Form you are currently using. If your revision code doesn’t read “Form I-9 07/17/2017 N”, you may want to consider updating your Form!

However, an eagle-eyed employer using Form Rev. 07/17/2017 N may notice that it says in its top-right corner that it “Expires 08/31/2019”. If the Form expired at the end of August, but it’s the only currently-valid Form available, what should employers do?

Fortunately, the U.S. Citizenship and Immigration Services (the agency tasked with maintaining Form I-9) has issued guidance for employers. According to the agency, “Until further notice, employers should continue using [Form Rev. 07/17/2017] even after the expiration date of Aug. 31 has passed.” The agency says it will provide updated information about the new version of the Form as it becomes available. (For the full text of the guidance, and other I-9 updates, click here).

For the most up-to-date I-9 Form and other information on it, Verified Credentials suggests that you explore the U.S. Citizenship and Immigration Services’ “I-9 Central”, which is available here.

Even though I-9 Central provides great updates for employers, making any changes to your employment forms and documents should always be done with the advice of your legal counsel to ensure that you stay compliant.

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