Does Your Company Give Employees and Applicants a "Fair Chance"? Navigating Expanding Criminal Background Inquiry Bans Across the Country

February 26, 2021

Topics: Hiring and Recruiting

Criminal background questions used to be standard fare on job applications.  This may now be unlawful.  Multiple locations have passed so-called “ban-the-box” or “fair chance” laws that prohibit or limit employers’ ability to ask about or consider a person’s criminal history as part of the job application process.  In addition, certain processes and notices may be required before making “adverse” employment decisions based on a person’s criminal history.  New laws have been implemented and existing laws modified to tighten these restrictions in significant ways.

New York City, for example, has radically expanded its Fair Chance Act – which has been in place since 2015 and requires a complicated analysis and mandated actions when prior criminal history is disclosed.  Recent amendments make it even harder for New York City employers, who were previously permitted to rescind a promotion or even terminate an employee who was convicted of a crime during employment without needing to follow the multi-step Fair Chance Act process.  Under the amendments effective at the end of July 2021, New York City employers will need to follow a very specific process before making any employment decisions based even on a conviction that happens during employment.

Similarly, an employer hiring in New York City could previously avoid the Fair Chance Act process when a candidate had an arrest that was pending and had not yet been disposed of or resulted in a conviction. Under the amended law, this will no longer be the case.  Another change is that the Fair Chance Act will not just apply to applicants and employees, but also to independent contractors. There are other changes that New York City employers should be aware of to ensure their hiring processes are compliant before the end of July 2021.

Like New York City, the City of Philadelphia also recently expanded its existing ban-the-box law, with changes going into effect on April 1, 2021. Among other changes, Philadelphia’s new law expands the law’s review and notice processes to include current employees and confirms that the law covers independent contractors, rideshare drivers, and other “gig” workers.

On a state-level, Maryland and Colorado have relatively new ban-the-box laws in place, and employers should make sure they are aware of their obligations in these states.

Illinois also seems prepared to expand existing protections for applicants and employees and to require employers to jump through new hurdles including written notice requirements when making hiring decisions based on a person’s criminal history.  The Illinois bill – which was passed by the legislature last month – would also require an employer to identify any "existing procedure" available to the candidate to challenge the employer's decision and the right to file a complaint with the Illinois Department of Human Rights. The bill is currently before the governor for his signature.

Employers in all locations need to be mindful of Equal Employment Opportunity Commission regulations intended to limit the effect background checks in the hiring process have on minority applicants.

Given the continued rise of ban-the-box laws, and other local legislation affecting the hiring process, employers should review their hiring and background check processes and consult with management-side employment counsel to ensure they are staying compliant with the most up-to-date laws in the locations where they are hiring employees. This is especially important in the current environment where employers are increasingly hiring in states other than where their company is headquartered.

For more information on this topic, please contact the authors, Jasmin Farhangian and Devora Lindeman, or your personal Greenwald Doherty contact.