December 9th, 2021 | Courtney Stieber, Partner, Labor & Employment, Seyfarth Shaw LLP
Staying Ahead of Supply Chain Impacts Due to Covid-19
In March 2020, the world as we knew it shut down. People were told to stay at home. Factories closed worldwide and shipping orders were cancelled. Non-essential workers, stuck at home due to government mandates or illness, were not available to generate or move many of the materials that, while non-essential, kept the fabric of our economy going.
Demand, however, did not stop. Many of America’s workforce found themselves with a new normal and a new way of life — indefinitely at home, working remotely. Due to Covid-19 uncertainties and precaution, online orders surged. From toilet paper, to flour for baking bread, to toys to occupy kids, to home office and remote schooling equipment — demand did not stop while supply became limited.
These supply chain woes have continued through 2020 and 2021, with every expectation that they will not be alleviated by 2022.
Companies operating in logistics, manufacturing, and similar industries are directly impacted by these supply chain issues and shifts in economic demand. Companies are struggling to get products on the shelves, are experiencing months of delays, and even seeing increased costs. Meanwhile, hiring needs have skyrocketed, with the available workforce options depleted. All of these changes have combined to impact hiring decisions, the need for criminal background checks and monitoring, and other health and safety concerns in the workplace.
Criminal Background Checks In The Age of Covid-19 More than ever, criminal background screening and workforce monitoring is critical forworkplace continuity and safety for employees and customers. Prior to Covid-19, many businesses handling logistics were focused on delivering goods and products to a physical retail location for distribution to customers. Now, that is not always the case. Since 2020, fewer people are visiting brick and mortar locations and relying instead on deliveries to their homes directly. For example, recent reports show that the pandemic more than doubled food-delivery apps’ business. Online sales increased 32.4% year over year in 2020, reaching over $791 billion in online sales. And a survey of 3,700 consumers indicated that they now shop more frequently online.
With these changes to our logistics economy come new decision-making considerations for employers. Employers — more than ever — face an obligation to ensure that contractors or employees delivering goods and services to customers’ homes are vetted and have had their criminal history evaluated for eligibility for the work to be performed. Criminal history that may not have posed a substantial risk in delivering goods and products to brick and mortar locations may pose a significantly greater risk when the final location for delivery is a customer’s home. Meanwhile, employers have fewer applications in their pipelines, and often fewer viable hiring options than prior to the pandemic.
Criminal background checks are the first step for a company to understand the risks posed by its workforce to its customer base. After a conditional offer is extended to the applicant, companies should conduct a pre-employment background check that includes federal, state, and county searches, a nationwide sex offender registry search, and other information that may be relevant to the job as permitted by the jurisdiction. In the event that a criminal background check shows a criminal history, companies should conduct an individualized assessment to review the nature of the conviction and individualized circumstances surrounding the conviction against the requirements of the job. Companies should review and consider the Equal Employment Opportunity Commission’s (“EEOC”) factors for evaluating criminal history information, which include: (1) the nature and gravity of the offense or conduct; (2) the time that has passed since the offense, conduct and/or completion of the sentence; and (3) the nature of the job held or sought. In addition, many states and cities have their own additional factors for companies to evaluate before making an employment determination based upon conviction record. By way of example only, New York State and New York City follow an eight-factor test set forth in New York Article 23-A that employers must consider before taking adverse action.
If an employer is considering taking adverse action based upon its evaluation of the criminal history information or any other information in the background check, the employer must follow the pre-adverse and adverse action notice procedures set forth by the Fair Credit Reporting Act (“FCRA”) at 15 U.S.C. § 1681b(b)(3). Specifically, an employer must send a pre-adverse action notice to the candidate, together with a copy of the background check, a copy of the Summary of Rights Under the FCRA, and a copy of any other notice requirements set forth by state or local law. After waiting a reasonable period of time, which the FTC has opined to be five business days but which may be longer in certain states or cities, the employer may then send an adverse action notice that rescinds the conditional offer of employment. Employers should be mindful that there are additional notice procedures set forth by certain state and local laws that may exceed these federal requirements.
If a candidate clears the criminal background check, or the candidate’s criminal history is determined not to be job-related or pose an unreasonable risk to the customer or the business, the inquiry does not necessarily end there. Many employers have opted to conduct recurrent background checks to ensure that throughout the employee’s employment, it is aware of any new criminal history that may develop. While companies would like to think that they would naturally become aware of charges against an employee or a conviction record, this is not necessarily the case, particularly in an increasingly remote workforce where brief absences to attend to court hearings or other legal obligations may not be as obvious to the employer as in the past. Recurrent background checks and monitoring are one way to ensure that businesses become aware of updates on an employee’s criminal record. Employers should seek legal guidance to ensure best practices are followed in conducting such recurrent checks or other criminal background checks.
Other Health and Safety Considerations in Light of Covid-19
While criminal background checks are a key component in ensuring workplace safety, employers also need to evaluate and implement policies concerning vaccination requirements in the workplace, or if opting not to require vaccination, policies that ensure compliance with the new Biden Executive Order and/or that otherwise meet OSHA safety standards. Each employer faces unique industry and operational drivers that will affect the policies they opt to put into place. For employers in industrial industries, outbreaks of Covid-19 in the workplace could shut down factory operations for weeks at a time, limiting supplies or substantially impacting revenues, and considerations should be made to mitigate that risk.
On September 9, 2021, the Biden Administration issued a six-pronged Covid-19 Action Plan that set requirements for large employers to mandate vaccination or weekly testing for employees who work in proximity, among other requirements. Specifically, private employers with 100 or more employees, federal government employees, and federal contract workers will now be subject to mandatory vaccine requirements, with a deadline of January 4, 2022 to comply with the full vaccination requirement. The executive order is currently subject to challenge by 10 states who have brought suit alleging the requirements exceed executive authority and are unconstitutional.
Employers must be mindful of whether they are subject to the new executive order, and put in place policies and processes to ensure compliance. If not subject to the executive order, employers should consider best practices for how they intend to handle vaccination requirements for their own workforce. Employers are also seeing a rise in accommodation requests based on religion or disability from employees seeking to be excused from vaccination requirements set by their employer. Employers who receive such requests should seek out legal counsel to ensure compliance with federal, state and local laws in how they respond to such requests.
Economic changes caused by Covid-19 have created new challenges for businesses, and in some cases, new responsibilities for employees. Employers need to evaluate how their internal practices align with these changes and ensure that processes are in place, from criminal background checks to other Covid-19 safety precautions, to comply with legal obligations while maintaining a safe and secure workplace for employees and business continuity.
Courtney Stieber is a Labor & Employment Partner at Seyfarth Shaw LLP. She can be reached at firstname.lastname@example.org or at 212-218-3382.
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