June 26th, 2018 | Debbie Lamb, Sterling Talent Solutions

More States and Cities Adopt Ban the Box and Pay Equity Laws

When applying for a job, applicants and candidates are protected under various local, state and federal laws. Employers need to be familiar and compliant with these regulations when hiring new employees. One of the federal laws, dating back to the 1970’s, which protects consumers and applicants is the Fair Credit Reporting Act (FCRA). The background check services and programs that a Consumer Reporting Agency (CRA), such as Sterling, provides fall under the regulation of the FCRA.

In the recent webinar, HR Compliance: FCRA Quarterly Update, compliance expert, Joe Rotondo, discusses recent and anticipated changes in state and local legislation as it relates to the FCRA and state laws. Two of the types of legislation that can impact the hiring process are Ban the Box and Pay Equity laws. Many states and cities have enacted Ban the Box legislation and the popularity of Pay Equity laws is continuing to grow. Knowledge of these laws is crucial when conducting background checks on candidates.

Ban the Box Laws

Ban the Box laws generally make it illegal for employers to request on an “initial written application form”, any information about an applicant’s criminal history. Currently, over 15 states and 100 cities/counties have enacted Ban the Box legislation. Each locality’s legislation has slightly different requirements and exceptions.

  • New York City: The NYC Fair Chance Act makes it a discriminatory practice for employers or employment agencies to inquire into an individual’s arrest or conviction record or perform a criminal background check until an employer has extended a conditional offer of employment.
  • Los Angeles: The Los Angeles Ban the Box/Fair Chance Initiative for Hiring was enacted in 2017. It has many similar aspects to the NYC Fair Chance Act. It requires companies give an applicant five business days to provide information regarding rehabilitation, or other mitigating factors and the business must hold the position open during that time.
  • California: The California Ban the Box Bill, which went into effect on January 1, 2018, prohibits employers in California from including on an application for employment any question that seeks an applicant’s conviction history until the individual has received a conditional offer. It also requires an employer to make an individualized assessment of whether the applicant’s criminal history has a direct relationship with the specific duties of the position sought. If the employer makes a preliminary decision to disqualify an applicant, the employer must notify the applicant in writing and include a notice of the disqualifying conviction upon which the decision was based, a copy of the conviction history and an explanation of the applicant’s right to respond and includes a notice that the applicant may submit evidence that the information is not accurate and or evidence of rehabilitation.
  • San Francisco: The San Francisco Fair Chance Ordinance, which aligns with the California Ban the Box law, goes into effect on October 1, 2018. The law applies to any business with five or more people and increases the penalties for violations starting at $500 and increasing up to $2,000.
  • Kansas City, Missouri: Kansas City Ordinance 180034, which just went into effect on June 9, 2018, applies to business with six or more employees. It requires that an employer cannot base a hiring or decision to promote an applicant or employee based on the applicant’s criminal history or sentence unless the employer can demonstrate that the decision was based on an analysis of the frequency, recentness and severity of the offense and how it is related to the position in question.
  • Washington: The Washington Fair Chance Act, which went into effect on June 6, 2018, prohibits employers from inquiring about an applicant’s criminal history until after the employer determines that the applicant is otherwise qualified for the position. An employer will violate the law if they advertise an employment opportunity that excludes people with criminal records from applying.
  • Spokane, Washington: Passed a similar law which will go into effect in July 2018. The Spokane law prohibits disqualifying an applicant for failure to disclose a criminal record prior to initially determining the applicant is qualified for the position.
  • Massachusetts: The Massachusetts Ban the Box legislation was recently signed into law and will be effective October 13, 2018. Under this law, employers may not ask for information about misdemeanor convictions that occurred three or more years prior to the date of the employment application, unless the person has been convicted of another offense within the preceding three years (this was previously limited to 5 years).

Pay Equity Laws

Pay Equity Laws, enacted on the local and state levels, is another type of legislation that impacts background checks. These laws are being enacted to help reduce the wage gap between men and women workers. In August 2016, Massachusetts passed a law preventing employers from asking job candidates about their salary history in an interview. Since then, other states and cities have passed pay equity laws including Delaware, Oregon, New York City and California. Other new laws include:

  • Albany, New York: The Albany County, New York Pay Equity law went into effect December 17, 2017. The law made it an unlawful practice for an employer with four or more employees or an employment agency to screen job applicants based on their wage or salary history.
  • Westchester, New York: On April 9, 2018, legislation was signed which will prohibit employers in Westchester County from inquiring about an applicant’s salary or utilizing salary history to determine what salary to offer an applicant. In addition, this law prohibits an employer from retaliating or refusing to hire an employee based on prior wage or salary history. The law will go into effect on July 9, 2018.
  • Vermont: The Vermont Pay Equity Law, which goes into effect on July 1, 2018, prohibits employers from requiring an applicant to disclose his or her salary and from seeking an applicant’s salary history without their authorization. However, if a prospective employee voluntarily discloses information about their current or past compensation, an employer may, after making an offer of employment with the compensation information to the prospective employee, seek to confirm or request the individual’s compensation information.
  • Connecticut: The Connecticut Pay Equity Law was just signed into law on May 22, 2018, and goes into effect on January 1, 2019. The new legislation will make it an unlawful practice for an employer to inquire or direct a third party to inquire about a prospective employee’s wage and salary history unless a prospective employee has voluntarily disclosed this information.

Stay Up-to-Date with Background Screening Compliance Laws

Sterling strives to keep its clients up to date on laws pertaining to the background screening industry. To find out more about FCRA Compliance and information for the background screening industry, listen to an OnDemand version of the Q2 2018 FCRA Compliance webinar and sign up for the quarterly updates.

PLEASE NOTE: Documents/presentations should NOT be construed as legal advice, guidance or counsel. Employers should consult their own attorney about their compliance responsibilities under the FCRA and applicable state and municipal law. Sterling Infosystems expressly disclaims any warranties or responsibility for damages associated with or arising out of this document/presentation or other information provided.

Sterling is not a law firm. 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.