Just weeks after prohibiting employers from using credit checks, the New York City Council Wednesday passed yet another bill that handcuffs businesses attempting to vet new job applicants. Most notably, the bill, commonly referred to as the Fair Chance Act (the Act), bars employers from inquiring about a job applicant’s criminal history before extending a conditional offer of employment to the applicant. In other words, the Act “bans the box” – typically found on employment applications – that asks about a candidate’s criminal background.

The Act is an amendment to the already-liberal NYC Human Rights Law (NYCHRL) and, beyond “banning the box,” it also creates other new legal protections for current and prospective employees who have criminal histories. Pundits expect that Mayor Bill de Blasio will immediately endorse the Act – possibly in the next few days.

Current New York City and State Law

New York is no stranger to legislation protecting the rights of individuals with criminal histories. Both state and city law already prohibit employers from discriminating against job applicants based upon their prior criminal conviction(s), unless:

  • There is a direct relationship between the prior criminal offense and the specific job sought; or
  • Hiring the individual would pose an unreasonable risk to property or the safety or welfare of specific individuals or the public.

Under this rule, employers must undertake a multifactor, case-specific analysis (set forth in State Correction Law Article 23-A), to evaluate whether there is a direct relationship between the applicant’s prior criminal activity and the job sought.

In addition, New York State law also prohibits employers from inquiring about or taking an adverse action based upon an applicant’s or employee’s prior arrest, or criminal accusations against him/her, that are no longer pending and that were resolved in the individual’s favor, resulted in a sealed conviction, or were resolved via youthful offender adjudication. Indeed, the only permissible employer inquiry under state law is into pending arrests of and criminal accusations against applicants and employees, as well as convictions.

NYC Seizes on Nationwide “Ban the Box” Trend

Despite these protections, neither the state nor city legislature, until recently, has gone as far as passing “ban the box” legislation – i.e., an all-out legal embargo on pre-employment inquiries into a job applicant’s criminal history – which has become a nationwide trend in recent years. In the past year or so, several major jurisdictions – including Illinois, San Francisco, Baltimore, Washington, D.C., and New Jersey – have adopted “ban the box” legislation, with similar laws already on the books in Hawaii, Massachusetts, Minnesota, Rhode Island, Philadelphia, Seattle, and Buffalo. Upon Mayor de Blasio’s endorsement of the new Act – which appears a foregone conclusion – NYC will be added to this growing list of “ban the box” jurisdictions.

The New Act

As introduced above, the Act prohibits any inquiry or statement made before a conditional offer of employment is extended – whether on an employment application, in an interview, or otherwise – about a job seeker’s pending arrest or criminal conviction record (as discussed, state law already prohibits inquiries into prior arrests). The term “inquiry,” as defined in the Act, includes questions posed to the job applicant him/herself, as well as pre-offer searches of public records and consumer reports that contain criminal background information.

For employers that intend to take an adverse employment action based on a criminal inquiry made after a conditional offer is extended, the Act also prescribes a rigorous notice procedure – akin to that imposed by the federal Fair Credit Reporting Act. Specifically:

  • First, the employer must provide a copy of the relevant inquiry to the job applicant (in a manner to be determined by NYC’s fair employment practices agency, the NYC Commission on Human Rights (NYCCHR)).
  • Next, the employer must perform the Article 23-A analysis referenced above and provide a copy of the attendant analysis to the applicant. Although the Act leaves it to the NYCHR to determine the precise form of the analysis, it must, at a minimum, include the reasons for the employer’s decision and any supporting documentation.
  • Finally, following receipt of these disclosures, the applicant must be afforded at least three business days to respond to the employer. During this period, the employer must hold the position open for the applicant.

Failure to adhere to this stringent protocol may be deemed a violation of the Act.

Exemptions

Like the recent credit check legislation, the Act contains several exemptions. The Act does not, for instance, apply to:

  • Actions that an employer takes pursuant to a state, local, or “federal” law that (i) requires the employer to conduct criminal background checks, or (ii) bars employment based on criminal history. A “federal” law, for purposes of the Act, includes rules or regulations promulgated by a self-regulatory organization under section 3(a)(26) of the Securities Exchange Act of 1934.
  • Applicants for employment as a police or peace officer.
  • Applicant for certain positions within the department of citywide administrative services.

These exemptions actually represent a significant expansion of liberty for employers from the original version of the Act, which excluded from its purview only those inquiries or statements “specifically required by statute.”

New Job Posting Restrictions

The Act does more than just ban the proverbial box, however. For instance, it also outlaws job postings that “express[], directly or indirectly, any limitation, or specification in employment based on a person’s arrest or criminal conviction.”

This provision may have the most resounding impact on NYC employers, especially those that already include language on job postings about candidates with criminal histories. For such employers, an immediate review of all job postings, both electronic and in print, is in order.

Additional Provisions

Other sections of the Act include fine-tuning several existing NYCHRL provisions that address employment-related use of arrest and conviction records. Specifically, the Act:

  • Clarifies that, in addition to barring adverse actions against job applicants, NYC law also forbids adverse actions against existing employees if such actions violate Correction Law Article 23-A. Notably, however, even for existing employees, Article 23-A only bars adverse actions based upon criminal convictions that occurred prior to employment.
  • Amends the NYCHRL to prohibit agencies and other entities that issue licenses, registrations, and permits from making inquiries or taking employment actions that violate Article 23-A or related state laws.
  • Adds to the NYCHRL a section barring credit issuers from denying or acting adversely upon a credit application due to, or making an inquiry about, an individual’s arrest or criminal accusation where such action or inquiry violates state law.
  • Aligns NYCHRL section 8-107(11) – which addresses arrest records – with existing state law concerning inquiries and adverse actions based upon prior arrests and criminal accusations (see above).

Practical Considerations

Coupled with the recent ban on pre-employment credit checks, the Act will likely require many employers to overhaul their hiring processes. Consequently, all NYC employers, especially those with a multistate presence, should scrutinize and amend, if necessary, the contents of their employment applications now. By doing so, employers will be able to make a seamless transition once the Fair Chance Act takes effect.