A new ordinance went into effect April 4, 2016, which prohibits many employers in Austin from asking job applicants about their criminal histories until they’re well into the hiring process. The Fair Chance Hiring Ordinance, colloquially known as the “Ban the Box” measure, will forbid most employers from considering an applicant’s criminal record until after making a conditional offer of employment. Thus, Austin employers must evaluate whether the ordinance will affect their operations and, if so, what steps they need to take to alter their hiring processes and related guidelines.

Who is covered?

The ordinance applies to any private employer that employs at least 15 individuals whose primary work location is in the City of Austin for each working day in 20 or more calendar weeks in the current or preceding calendar year. It also applies to “an agency acting on behalf of an employer.” The ordinance does not apply to the federal, state, or political subdivisions, as well as Section 501(c) bona fide private membership clubs (except labor organizations) or any “job for which a federal, state, or local law disqualifies an individual based on criminal history.”

It should be noted that the ordinance is broad enough to cover virtually any type of “employment,” such as temporary and seasonal work, contract and contingent employment, work through a temporary or other employment agency, and participation in a vocational, apprenticeship, or educational training program.

The ordinance does not apply to jobs for which a federal, state, or local law, or compliance with legally mandated insurance or bond requirements, disqualifies an individual based on a criminal history.

What has changed?

The ordinance makes several traditional hiring practices unlawful. Primarily, it is now unlawful for any covered employer to solicit criminal history information about an individual, or consider an individual’s criminal history, unless the employer has first made a conditional employment offer, which is conditioned solely on the employer’s evaluation of the individual’s criminal history. In other words, most Austin employers may no longer ask job applicants about their criminal history, on a job application or otherwise, and may not procure a criminal background check, until making an applicant a conditional job offer.

Covered employers are also prohibited from publishing information about a job which states or implies job applicants’ criminal histories will disqualify them from consideration for employment or refusing to consider employing an applicant if an applicant refusing to provide criminal history information prior to receiving a job offer.

Further, a covered employer cannot take “adverse action” against an individual because of an individual’s criminal history without first conducting an “individualized assessment.” The term “adverse action” includes a refusal hire or promote, as well as revocation of a conditional offer of employment or promotion. Thus, the ordinance affects both prospective and current employees. In conducting an individualized assessment, a covered employer must, at minimum, consider:

  • The nature and gravity of any offenses in the individual’s criminal history;
  • The length of time since the offense and completion of the sentence; and
  • The nature and duties of the job for which the individual has applied.

The ordinance expressly permits a covered employer to withdraw a conditional offer of employment for any lawful reason, including the determination that an individual is unsuitable based on an individualized assessment.

In sum, private employers in Austin:

  • May no longer solicit or consider criminal history information about a job applicant until after a conditional offer of employment;
  • May not take adverse action against an applicant or current employee until completing an individualized assessment and the employer determines that the individual is unsuitable for the job; and
  • Must advise applicants of any adverse action, in writing, based on the consideration of the individual’s criminal background.

What are the risks?

The ordinance does not provide workers with a private right of action against a prospective employer. Instead, potential claimants may file a complaint with the Equal Employment Opportunity Commission/Fair Housing Office (EEOC) within 90 days of their receipt of knowledge of an alleged violation (but in no circumstance, later than one year after the alleged violation).

The EEOC may impose civil penalties of up to $500 against employers for each violation of the ordinance. For first-time violations, an employer is entitled to a warning if the employer attends a training session about compliance with the ordinance.

However, civil penalties will not be imposed for violations prior to April 4, 2017 (one year after the effective date of the ordinance). Violations that occur during the first year will result in a written notice from the EEOC to the employer, which informs the employer that a civil penalty may be enforced for any violations that occur after the first anniversary.

What should we do?

Unfortunately, many questions are raised by the ordinance that do not have clear answers. For instance, to determine its applicability, the ordinance fails to state the extent an employee must work within the City of Austin and for how long to qualify toward the 15-employee threshold.

Similarly, the ordinance is silent as to when and how an employer may provide a written explanation to job applicants related to its individualized assessment of an applicant’s criminal history in evaluating the applicant for employment.

Perhaps most troublesome, the ordinance does not address situations in which there is potential for conflict with existing Texas statutes that give certain employers the right to conduct background checks at the outset of the hiring process concerning criminal convictions that are automatic bars to employment. For example, healthcare laws often prohibit nursing homes, long-term care, and other assisted living facilities from employing persons previously convicted of sexual assault; injury to a child, elderly individual, or disabled individual; or crimes of indecency, among other things. Must these facilities go through the trouble and expense of interviewing job applicants whom they could never employ, no matter the circumstance?

Companies with employees in Austin should immediately assess whether they are covered by the ordinance. If so, employers should review and revise job applications, hiring processes, interview guidelines, and background check procedures to make sure these processes will not violate the ordinance or other applicable federal, state and local laws. Employers should also review the employee handbooks and manuals to ensure existing policies and procedures comply with the new law. If in doubt, affected employers should consult with their employment counsel, particularly where they have employees and standardized forms across multiple jurisdictions, as “ban the box” initiatives become more commonplace across the nation.