Executive SummaryThe New Jersey Opportunity to Compete Act (the "Act"), known as the "Ban the Box" law, will go into effect on March 1, 2015.  The Act prohibits employers from inquiring about an applicant's criminal background during the initial employment application process.  Employers should ensure that their applications and hiring processes are in compliance with the Act before it takes effect next month. 

Coverage

The Act defines a covered "employer" as "any person, company, corporation, firm, labor organization or association which has 15 or more employees over 20 calendar weeks and does business, employs persons, or takes applications for employment within" the state of New Jersey, "including the State, any county or municipality, or any instrumentality thereof." 

An "employee" means "any person who is hired for a wage, salary, fee or payment to perform work for an employer."  This definition includes interns and apprentices but excludes persons employed in the domestic service of any family or person at the person's home, independent contractors, or directors and trustees.

The Act further defines the term "employment" as "any occupation, vocation, job, or work with pay, including temporary or seasonal work, contingent work, and work through the services of a temporary or other employment agency; any form of vocational apprenticeship; or any internship."  However, the "physical location of the prospective employment shall be in whole, or substantial part, within this State." Therefore, the Act only applies to applicants whose employment will substantially be within the state of New Jersey. 

Prohibitions – Inquiry and Job Advertisements

The Act prohibits covered employers from requiring an "applicant for employment" to complete an "employment application" that makes inquiries regarding the applicant's criminal record during the "initial employment application process."  The Act broadly defines "employment application" to mean any "form, questionnaire or similar document" that an applicant is required by the employer to complete. 

Covered employers are also prohibited from making any oral or written inquiries regarding an applicant's criminal record during the "initial employment application process."  The "initial employment application process" begins with the first inquiry (either by the employer or applicant) about prospective employment or a job vacancy, and ends only when the employer has conducted a first interview, "whether in person or by other means," of an applicant for employment.  Consequently, employers can make an inquiry into an applicant's criminal background after the first interview has concluded.

The Act also prohibits job postings or other advertisements that state that the employer will not consider applicants who have been arrested or convicted of one or more crimes or offenses. 

Exceptions – Voluntary Disclosure and Specific Industries

If an applicant voluntarily discloses any information regarding his or her criminal record, either orally or in writing, during the initial employment application process, the Act permits employers to make inquiries regarding the applicant's criminal record.

In addition, the Act does not apply to certain positions that are exempt from the Act's provisions.  These include (i) positions in law enforcement, corrections, the judiciary, homeland security or emergency management; (ii) positions where a criminal background check is required by law; (iii) positions which, by law, cannot be held by individuals with certain crimes or offenses; (iv) where an employer's ability to engage in specific business activities is restricted based upon the criminal records of its employees; or (v) programs designated by the employer to predominantly or exclusively encourage the employment of persons who have been arrested or convicted of one or more crimes or offenses.

Use of Criminal Records

The Act does not preclude employers from refusing to hire an applicant based upon a criminal record unless the "criminal record or relevant portion thereof has been expunged or erased through executive pardon."   However, employers should be aware that there are restrictions on using an employee's criminal background as a basis for adverse employment actions (including refusal to hire) under federal and other laws. 

Penalties

The Act does not provide for a private right of action.  Rather, civil penalties may be enforced by the Commissioner of Labor and Workforce Development in the amount of $1,000 for the first violation, $5,000 for the second violation, and $10,000 for each subsequent violation.  

What does this mean for Employers?

In advance of the March 1, 2015 effective date, employers should take steps to assess their coverage under the Act.  Covered employers should revise their employment applications and related forms to remove inquiries into an applicant's criminal background during the initial employment phase, as well as ensure that any job postings or advertisements are in compliance.  Employers should also review their hiring policies and ensure that all individuals involved in the hiring process understand that they can ask about an applicant's criminal history only after the initial interview.