It has been a little over a month since the Opportunity to Compete Act (the “Act”) went into effect in New Jersey. The Act, which is New Jersey’s version of Ban the Box, was originally signed into law on August 11, 2014, giving employers roughly 6 months to review and revise their employment forms and practices to conform to the new mandates.

The enactment of the law solidifies New Jersey’s position regarding the use of criminal background checks during the initial employment application process. Although this movement has been in effect on a local level in many locations for some time, the Act specifically declares that any attempts to regulate this conduct on a local level are pre-empted by the Act, unless done so to regulate municipal operations.

As is often the case, the final law differs greatly from proposed versions that were circulated during the approval process, so employers should ensure that their policies and procedures are updated in accordance with the version that was ultimately approved. Specifically, the final version of the Act prohibits employers who employ at least 15 employees over 20 calendar weeks from inquiring about the criminal records of prospective employees during the “initial employment application process.” The “process” is defined as:  

…the period beginning when an applicant for employment first makes an inquiry to an employer about a prospective employment position or job vacancy or when an employer first makes an inquiry to an applicant for employment about a prospective employment position or job vacancy, and ending when an employer has conducted a first interview…”

After the first interview, employers are free to make inquiries and perform criminal background checks upon consent and in accordance with state and federal law. Further, employers can use the information they obtain as a factor in the hiring decision. There is no requirement that a conditional offer of employment be made before the employer engages in this conduct but the employer must reasonably believe the individual is qualified for the position, based on the information obtained during the initial application process. If the prospective hire voluntarily offers information regarding his or her criminal history during the initial stages, the employer can make further inquiries at that time without violating the law.

Certain job positions are exempt from protection under the Act, such as positions in law enforcement, corrections, the judiciary, homeland security, emergency management, and positions where a background check is legally required for the job. Also, the Act does not apply in situations where the criminal records of employees could restrict an employer’s ability to engage in a specific business activity. For purposes of the Act, “Employer” includes the State, job placement agencies and referral agencies. Temporary and seasonal work, vocational apprenticeship positions and internship positions are all protected under the Act. The Act does not apply to independent contractors or domestic workers.

Once an employer properly obtains criminal background information, there are limitations on what information can be considered. Terrorism convictions can always be considered, regardless of how long ago the conviction occurred. For crimes in the 1st-4th degree, employers can consider information as far back as 10 years from the date of release or from sentencing (whichever is applicable). Pending criminal charges can be considered but anything that has been expunged, erased, pardoned or sealed cannot. Juvenile delinquencies and violations of municipal ordinances are also immune from consideration.

The objective of the Act is to remove obstacles impeding employment opportunities for people with criminal records. It seeks to accomplish this by delaying the timing of the disclosure of criminal record information with the hope that employers will see past it once they have already determined that the individual is otherwise qualified. Whether it will have a real impact remains to be seen.

Employers should keep in mind that the new law provides a framework for policy creation but that it is only a starting point. Care should be taken to ensure that federal laws, including anti-discrimination laws, are not violated. Blanket policies which seek to eliminate any applicants who are ultimately found to have a conviction record could ultimately subject employers to claims of disparate impact under Title VII. Accordingly, caution should be taken when evaluating the appropriate type of policy for your business.

Employers who have not yet updated their forms and procedures should immediately contact counsel and take steps to ensure that they are in compliance. Similarly, it may be prudent for employers who drafted their own policies to have experienced employment counsel perform a review and provide advice and guidance regarding employer responsibilities and obligations.