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November 8th, 2017 | Debbie Lamb, Sterling Talent Solutions

HR Compliance in 2018: Are You Ready?

2017 brought about many changes in employment laws that impact the hiring process. From ban the box to salary history bans to more states legalizing the recreational and medicinal use of marijuana, it was a busy year and 2018 looks to be just as busy. The variety of laws/rules can be overwhelming to an employer, and if regulations are not complied with properly, an organization might have to deal with penalties.

There is no doubt that any election and new administration creates uncertainty over what rules/laws will be created or repealed and how those rules/laws will be enforced by our bureaucracy and our courts. Sterling recently presented the “HR Compliance in 2018: Are You Ready?” webinar to share compliance-related updates that have taken place in 2017 and how they affect the background screening industry. Jennifer L. Mora, Senior Counsel of Seyfarth Shaw LLP, walks us through the many compliance changes that took place in the past year and best practices to keep compliant in 2018.

The Trump Effect

The lack of predictability and uncertainty tied to an eclectic federal administration and a governmentally-inexperienced politician and cabinet has led to many unknowns. The overall policy of the Trump administration appears to be generally “pro-business,” but with some “conflicting signals” and policy gaps left unaddressed and unclear. Many federal departments have had or will have key membership changes and pending decisions:

  • Equal Employment Opportunity Commission (EEOC): The EEOC has two new nominees to be approved and there was an increase in EEOC filings since Trump took office.
  • National Labor Relations Board (NLRB): This board has two new appointees. There are a handful of controversial NLRB decisions that are in the works that should be kept an eye on.
  • Department of Labor Wage and Hour Division (DOL): There are 14 positions that still require Senate confirmation for this board. The DOL dismissed the 5th Circuit appeal regarding overtime rules on September 5, 2017.

Compliance Related Updates in 2017

Compliance will always play a major role in the background screening industry. There will always be new regulations created and voted on at every level of government: local, state and federal. Employers need to be kept informed of what information they need to provide for background checks and hiring forms.

Salary History Bans

There has also been an increase in salary history ban legislation in cities and states across the country. On October 12, 2017, Governor Jerry Brown of California signed AB 168 into law, making California the eighth jurisdictions to enact such legislation. Other states and municipalities include Delaware, Puerto Rico, Oregon, Massachusetts, New York City and San Francisco. In California, it is unlawful for employers to ask job applicants about their salary history, including benefits and/or other compensation information. An employer could be held liable if they ask about salary history when interviewing, extending an offer or deciding how much to pay applicants. If an applicant voluntarily provides their salary history, an employer may consider the information but should do so with great care to avoid any hint of impropriety which could lead to a potential claim. Under the law, employers are also required to give applicants the pay scare for a position upon request.

Recreational and Medical Marijuana

29 states have adopted general medical marijuana laws. Most of these states do not include employment protections, but increasingly legislators are seeking to protect medical marijuana users from adverse employment action. Marijuana is a federal illegal schedule 1 drug which the government sees having no medicinal value. Certain states including Arkansas, Arizona, Connecticut, Delaware, Illinois, Main, Minnesota, Nevada, New York, Pennsylvania, Rhode Island and West Virginia have put statutory protections for workers using medical marijuana in place. Each of these states has different variations of their protections. However, there are states with legalized medical marijuana, but the courts have decided the laws in these states do not provide employment law protection. These states include California, Colorado, Michigan, Montana, Oregon and Washington. The Massachusetts Supreme Court was the first state Supreme Court to find in favor of the medical marijuana user in a decision on July 17, 2017. The court acknowledged the federal/state conflict, but federal pre-emption argument was waived.

Ban the Box Laws

Ban the box laws have been sweeping the country for the last few years. The newest ban the box law goes into effect in California on January 1, 2018. The California law, which involves both the public and private sectors, states that employers cannot make a criminal history inquiry until after a conditional offer has been made to an applicant. The law also requires an individualized assessment of any conviction and a written notice to the applicant explaining why the applicant was not hired. Does the growth of the ban the box laws mean that the criminal history question will be completely removed? The answer to that question is up to the employer, their industry and their location. If a company is in a state or municipality with a ban the box law, it might be best to remove the question of the application and not ask the question until after a conditional offer has been made or during the background screening process. It is important for organizations to consult legal counsel about the wording and the timing that works the best for their company while still being compliant with local and state laws.

Looking Ahead to 2018

As President Trump’s legislative agenda continues to be debated and laws modified, employers need to keep a close watch on the reaction of the states to the administration’s federal employment law decisions in the coming year. States could enact further individual regulations based on federal changes. It is crucial for businesses to conduct a privileged review of their background check processes and employment applications to ensure compliance with salary history and ban the box laws.

We had many questions during the webinar that will be addressed in a separate blog post in the coming weeks. For more information on changes in employment laws including Paid Sick Leave Laws and updates for overtime and minimum wage laws listen to the OnDemand version of the webinar, “HR Compliance 2018, Are You Ready?”

Please note: Sterling is not a law firm. The material available in this publication is for informational purposes only and nothing contained in it should be construed as legal advice. We encourage you to consult with your legal counsel to obtain a legal opinion specific to your needs.

This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.