Most New York City Employers Must Revise Background Screening Processes

​Amendments expanding existing employment protections under the New York City Fair Chance Act (FCA), also known as the ban-the-box law, became effective on July 29.

Among other changes discussed below, the amendments (i) affect the process for taking into account the criminal history of job applicants―including requiring all background checks other than criminal ones, such as a reference or education check, be completed before a conditional offer is made if a criminal background check is to then be run―and (ii) require a full analysis of pending criminal arrests and charges of both job applicants and employees. These two requirements set New York City apart from other jurisdictions with ban-the-box obligations. The New York City Commission on Human Rights has published legal enforcement guidance clarifying these expanded protections.

Prior Requirements that Remain in Effect

Since Oct. 27, 2015, the FCA has required New York City employers to consider specific factors in deciding whether to rescind a conditional offer of employment based on a job applicant's conviction history if such history directly relates to the job applied for or if the applicant would create an unreasonable risk to property, persons or the general public if hired. These factors are set forth in Article 23-A of the New York State Corrections Law and remain relevant to pre-employment conviction history. The FCA has also (i) prohibited inquiries concerning an applicant's criminal history until a conditional offer of employment is made, (ii) required employers to provide the applicant with a notice and written analysis of the factors leading to a withdrawal of the conditional offer, and (iii) provided the applicant with three business days to respond before a conditional offer of employment can be withdrawn. These requirements remain in effect except that job applicants are now provided at least five business days to respond to the employer's notice.

The Article 23-A factors applicable to an applicant's conviction history are:

• The public policy of New York State to encourage the licensure and employment of persons previously convicted of one or more criminal offenses.
• The specific duties and responsibilities necessarily related to the employment sought or held by the person.
  
• The bearing, if any, the criminal offense or offenses the person was previously convicted of will have on the person's fitness or ability to perform one or more such duties or responsibilities.
• The time which has elapsed since the occurrence of the criminal offense or offenses (not the time since arrest or conviction).
• The age of the person at the time of occurrence of the criminal offense or offenses (not the age at arrest or conviction).
• The seriousness of the offense or offenses.
• Any information produced by the person, or produced on the person's behalf, in regard to their rehabilitation or good conduct.
• The legitimate interest of the employer in protecting property and the safety and welfare of specific individuals or the general public.
• Whether the person has a certificate or relief from disabilities or good conduct, which create a presumption of rehabilitation.

FCA Expansions

The amendments significantly expand the employment protections of the FCA by imposing the additional requirements described below.

Solicitations, advertisements and publications for employment cannot mention criminal history. Employers are not permitted to qualify job advertisements, fliers or employment applications by writing "no felonies," "background checks required" or "clean records only." Employers also are not permitted to make neutral statements about criminal background checks before making a conditional offer of employment, including statements that the employer is in compliance with the laws protecting applicants based on their criminal histories.

Two-step background check required. A criminal background check can only be performed and evaluated after an employer makes a conditional offer of employment to an applicant. Thus, employers must conduct all noncriminal checks, such as employment history, academic records and references, before making a conditional offer of employment. Only after making a conditional offer may an employer check an applicant's criminal history. Moreover, this restriction applies to internet searches for an applicant's criminal history. Employers are not permitted to search for the name of an applicant with terms such as, but not limited to, "arrest," "mugshot" or "prison."

Accordingly, employers who rely on consumer reporting agencies to obtain background reports must work with them to obtain separate noncriminal and criminal background check reports. The NYC Commission on Human Rights recommends receiving the noncriminal report prior to a conditional offer and then receiving a separate report on criminal history after making a conditional offer. If two separate reports are not provided, employers must have an internal system that segregates the noncriminal history from the criminal history, and the decision-maker cannot have access to the criminal history until after making a conditional offer of employment. Employers have the burden of proving that the criminal information was inaccessible to the decision-maker until after a conditional offer. In addition, because driving records may contain criminal history, they should be reviewed with the criminal background check report and only after making a conditional offer.

An employer may rescind a conditional offer of employment if such revocation is based on (i) the results of a criminal background check performed in accordance with the FCA evaluation process, (ii) the results of a medical exam permitted by the American with Disabilities Act or (iii) any other information the employer could not have reasonably known before making the conditional offer if the employer can show as an affirmative defense that, based on the information, the employer would not have made the offer of employment regardless of the results of the criminal background check. It is unlawful to revoke the conditional offer based on noncriminal information that could have been obtained prior to making the conditional offer of employment.

Omit mentions of criminal background checks from written authorizations made prior to a conditional offer of employment. Employers are not permitted to specifically seek authorization of a criminal background check prior to making a conditional offer of employment. Rather, employers should be specific about the information they are seeking and refer to a pre-offer background check as a "consumer report," "investigative consumer report," "reference check," "employment and education verification" or "resume authentication" rather than "background check."

New Protections for Arrests and Pending Criminal Accusations Preceding and During Employment and Convictions of current employees. The amendments expressly prohibit adverse employment actions based on an employee's conviction of a criminal offense or an employee's or applicant's pending criminal case, unless the employer considers the FCA factors provided below and determines (i) the conviction or pending criminal case has a direct relationship with the job or (ii) employment would involve an unreasonable risk to property or to the safety or welfare of any person or the general public.

The FCA factors applicable to pending cases and convictions during employment are:

• The policy of New York City to overcome stigma toward and unnecessary exclusion from employment of persons with criminal justice involvement.
• The specific duties and responsibilities necessarily related to the employment held by the person.
• The bearing, if any, of the criminal offense or offenses the applicant or employee was convicted of, or that are alleged in the case of pending arrests or criminal accusations, on the applicant or employee's fitness or ability to perform one or more such duties or responsibilities.
• Whether the person was 25 years of age or younger at the time of occurrence of the criminal offense or offenses they were convicted of, or that are alleged in the case of pending arrests or criminal accusations, which shall serve as a mitigating factor.
• The seriousness of such offense or offenses.
• The legitimate interest of the employer in protecting property and the safety and welfare of specific individuals or the general public.
• Any additional information produced by the applicant or employee, or produced on their behalf, in regards to their rehabilitation or good conduct, including but not limited to history of positive performance and conduct on the job or in the community.

Leave permitted while the employer undertakes the FCA process. Employees may be placed on leave while the employer undertakes the FCA process. If an employee has accrued paid leave, they should be permitted to use that time consistent with the employer's leave policies. If paid leave is unavailable, the employer may place the employee on unpaid leave. However, a delay by the employer in excess of five business days, from the time the employee is placed on leave to the time they receive the FCA notice with the criminal history report, is presumed to be unreasonable and could be a violation of the New York City Human Rights Law (NYCHRL).

The FCA notice provides the employee with the employer's evaluation of the relevant FCA factors and whether the criminal activity is directly related to the job or poses an unreasonable risk to people or property. The employee is then provided at least five business days to respond to the FCA notice and provide evidence of good conduct and rehabilitation. After receiving additional information from the employee, an employer must reevaluate its FCA analysis and communicate its final decision to the employee. During this process, employees may be placed on leave, but employers should not unreasonably prolong the process as they risk being liable for violating the NYCHRL.

Adverse action for making intentional misrepresentations permitted. Employers may take adverse action against a job applicant or employee who makes intentional misrepresentations regarding their arrest or conviction record, provided (i) the employer provides the job applicant or employee with a copy of the documents on which the determination that an intentional misrepresentation was made; and (ii) the job applicant or employee is provided a reasonable period of at least five business days to respond.

Nonconvictions may not be considered by an employer. Employers may not inquire about or act on nonconviction information. The NYC Commission on Human Rights' guidance provides a nonexhaustive list of nonconvictions that may not be considered, including the following:

• Individual not charged with a crime or prosecuted after an arrest.
• Adjournments in contemplation of dismissal unless the matter is restored to the calendar for adjudication.
• Cases in which all charges were dismissed or there is an acquittal.
• Cases in which the verdict was set aside or judgment was vacated and no new trial was ordered, nor is any appeal pending.
• Youthful offender adjudications.
• Sealed convictions.
• Cases involving a conviction defined by New York law as a violation, including, but not limited to, trespass, disorderly conduct, failing to respond to an appearance ticket, loitering, harassment in the second degree, disorderly behavior or loitering for the purpose of engaging in prostitution offense.
• Cases resolved in a conviction for a noncriminal offense under the laws of a state other than New York.

Exemptions to the FCA

Employers may invoke an exemption to the FCA if (i) federal, state and local laws require employers perform a criminal background check and deny employment to individuals with specific criminal histories, (ii) they are in the financial services industry to the extent that the FCA process conflicts with industry-specific rules and regulations promulgated by a self-regulatory organization, (iii) the employees are police and peace officers or (iv) the employees are employed by a New York City agency. These exemptions are construed narrowly, and employers have the burden of proving the exemption by a preponderance of the evidence. Even if an exemption applies, an employer may still be required to analyze certain criminal history against the Article 23-A or FCA factors.

What this Means for Employers

Employers should review their current job postings, applications and background screening practices and modify them, so they comply with the amendments to the FCA and the commission's guidance. Managers and human resources personnel must be trained on the amendments to the FCA and any changes to the employer's processes.

Employers also must ensure that they have a two-step pre-employment screening process and coordinate this with consumer reporting agencies. Employers who believe an exemption may apply to them should review the commission's guidance very carefully, especially if specific criminal conduct of the employee is not covered by an applicable law requiring the denial of employment. Given the expansive changes to the FCA, employers are encouraged to consult with an employment attorney to incorporate the amendments into their practices.

© 2021 Duane Morris. All rights reserved. Reposted with permission.