Employers take heed! On November 18, 2012, companies doing business in Newark, N.J., that employ five or more workers will be prohibited from conducting criminal background checks before or during the job application process. This new Newark ordinance bans companies from asking job applicants about their criminal histories, inquiring on employment applications about criminal history, and mentioning in advertisements that eligibility for employment is conditioned on an applicant’s criminal history. The law applies if the relevant position is physically located in whole or substantial part in Newark. And, the law applies whether the job position is permanent, temporary, contracted or seasonal, and whether or not the job is paid.

Criminal background checks remain permissible, but only for job positions that are “sensitive” enough to warrant a criminal record check and, then, only after the applicant is found to be qualified and given a conditional offer of employment. The law does not define what considerations should be made when determining what job positions are sensitive enough to warrant a criminal history report. A prudent course of action is to identify those positions with direct customer contact, access to personal information, and control of finances and security, but these determinations are fact-sensitive and should be evaluated with counsel.

Before conducting a criminal background check under these circumstances, the employer must provide a standard written notification advising the candidate that (1) it will conduct a criminal history only with his or her written consent, and (2) if an adverse employment decision is made, he or she will have ten business days to respond to the employer with information related to the accuracy and/or relevance of the results of the criminal background check. The law does not address the consequences of a candidate’s refusal to provide consent to a criminal background check, suggesting that employers may rescind an offer of employment provided they have a solid basis for arguing that the background check was necessary.

Once armed with the candidate’s written consent, employers may inquire about criminal convictions going back eight years, as well as disorderly persons convictions and municipal violations going back five years, and pending arrests and criminal charges. Convictions for murder, voluntary manslaughter, and registered sex offenses can be obtained regardless of their age.

If an adverse employment decision is based on the results of a criminal history inquiry, the employer must first document its consideration of six different factors on an Applicant Criminal Record Consideration Form (which was not available on the City of Newark’s website as of the writing of this Alert). Those factors include the nature of the crime and its relationship to the duties of the position, whether the job provides an opportunity for commission of similar offenses, how much time elapsed since the commission of the crime and how that timing factored into the employment decision, and any rehabilitation efforts or good conduct by the candidate.

Employers must then notify the candidate of the adverse employment decision, provide a copy of the results of the criminal history report, identify the criminal convictions that relate to the job position, provide the candidate with its Applicant Criminal Record Consideration Form, and notify the candidate that he or she has 10 business days to respond to the results of the criminal background check. No final decision may be made by the employer until it has reviewed the information provided by the candidate and provided the candidate with a final written notice advising of the final action and its evaluation of the information provided.

Finally, the law requires employers to maintain the criminal background results in a confidential manner, sharing them only with individuals with a business need to evaluate the applicant. If employment is commenced, all criminal history records must be removed from the personnel file.

This new municipal law is designed to assist with the reintroduction into society of prisoners released from the state and county correctional facilities located in Newark. It is also based, in part, on the fact that Newark’s unemployment rate as of March 2012 was 14.5 percent — almost double the national rate. In addition, New Jersey ranked as one of the 10 worst states for creating collateral legal barriers for individuals with a criminal record. By removing the criminal history obstacle to employment, the law aims to increase public health and safety, and decrease discrimination against racial minorities.

While the goals are laudable, the law does not provide a private cause of action. Instead, it will be enforced by a designee of the Mayor of the City of Newark with fines of $500 for a single violation and $1,000 for multiple violations within a three-year period.