The New Jersey Department of Labor and Workforce Development issued its final regulations, effective immediately on December 7, 2015, clarifying the requirements of the state-wide ban-the-box law, also known as the Opportunity to Compete Act. The regulations address some of the questions and gaps left open since the Act became effective less than a year ago, on March 1, 2015.

As background, the Act generally prohibits employers with 15 or more employees from asking any questions, written or oral, about an applicant’s criminal record during the initial application process (excluding several specific types of jobs), that is, prior to the completion of the first interview. This provision extends to prohibit job advertisements from stating that applicants with convictions or criminal histories will not be considered. After the first interview, however, employers are free to inquire into criminal history, as well as to refuse to hire an applicant based on their criminal history (again, subject to several exemptions, such as records that have been expunged or pardoned in whole or in part). 

The regulations clarify certain key aspects of the Act. Specifically,

  • Employers of 15 or More Employees Are Covered: The Act applies to employers who employ 15 or more employees, regardless where those employees are actually located. The 15 employees do not all have to be in New Jersey.
  • Use of Multi-State Forms Is Permitted: Multi-state employers who use uniform employment applications and forms in multiple jurisdictions may include a question regarding criminal records on an employment application, so long as immediately before the question there is a statement that “an applicant for a position the physical location of which will be in whole, or substantial part, in New Jersey is instructed not to answer this question” until after the first interview. This requirement is the stark opposite of the recent requirements in New York City and Philadelphia that effectively prohibit multi-state forms with state-specific carve-outs like the one permitted here.
  • “Interview”: Since employers are prohibited from inquiring into an applicant’s criminal record until after the first interview, the regulations clarify that an “interview” means “any live, direct contact by the employer with the applicant, whether in person, by telephone, or by video conferencing, to discuss the employment being sought or the applicant’s qualifications.” It does not mean solely “the exchange of e-mails or the completion of a written or electronic questionnaire.”
  • Internet Searches Are Prohibited: The Act prohibits an employer from making “any oral or written inquiry to anyone, including to the applicant, during the initial employment application process regarding an applicant’s criminal record,” which includes searching the internet.
  • DWI/DUI and Motor Vehicle Violation Records Are “Criminal Records”: Employers are prohibited from inquiring about an applicant’s “criminal record.” This is broadly defined as “information collected by criminal justice agencies on individuals consisting of identifiable descriptions and notations of arrests, detentions, indictments, or other formal criminal charges,” which the Department of Labor reads to include DWI/DUI records and records of motor vehicle violations.
  • Interns and Apprentices Are Protected By the Act: The regulations were amended to explicitly include apprentices and interns. Employers are prohibited from inquiring about their criminal records in the same way as for any other applicant for employment.
  • No Protection for Independent Contractors: Employers can inquire about the criminal record of a prospective independent contractor, without any restrictions under the Act. To determine whether the applicant is seeking a position as an employee or independent contract, the Department of Labor will use the “ABC Test,” as defined by N.J.S.A. 43:21-19(i)(6). Generally, the ABC Test looks to (A) the level of control over the individual performing services; (B) whether the service is “outside the usual course of the business,” or outside the place of business, of the employer; and (C) whether the applicant is “customarily engaged in an independently established trade, occupation, profession or business.” The Department of Labor presumes an employment relationship, unless the putative employers can establish all three requirements, that is, a lack of control, services that are outside of their usual course of business, and that the applicant is engaged in an independent trade, occupation, profession or business.
  • Employee Leasing Agencies vs. Referral Agencies: Depending on the specific nature of the relationship between such agencies and their worksite-employer clients, they may both be considered an co-employers, and thus after an initial interview with one, either may inquire into an applicant’s criminal history. Or, the agency and worksite-employer may be considered separate employers, and thus each would have to conduct their own separate interview prior to inquiring into an applicant’s criminal record. The nature of the relationship will govern the application of the Act.

The Department of Labor’s regulations and commentary provide useful guidelines for employers, with the added specificity eliminating some of the guesswork previously necessary for compliance. Employers now have some additional guidance for determining whether they are subject to the Act, as well as whether the applicant (be it for a full time job, an internship, or a job as an intendent contractor) is protected by the Act. Covered employers should review their hiring practices and forms for compliance to conform to these new requirements.