NYC Fair Chance Act: 6 Ways Employers Can Stay Compliant

The New York City Fair Chance Act went into effect on October 27. The Act addresses employers’ responsibilities as they relate to criminal background checks. The law is designed to delay criminal background screening to allow candidates an opportunity to interview and be considered for jobs before potential elimination by a background check.

Under the Fair Chance Act, New York City employers are prohibited from inquiring or obtaining any statement about an applicant’s criminal background until after a conditional offer of employment has been made.

Check out our latest video to learn six ways employers can stay compliant with the new law.

New York City Fair Chance Act Buries Employers with More Paperwork

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You know that feeling when you get to deliver what you know is going to be very unpopular news to a group of people and you have to present it as a positive? Well, get ready those of you conducting employment background checks in New York City, because I’m about to blow your mind with . . .  wait for it. MORE PAPERWORK!!!!!!

As you all know by now, New York City passed the Fair Chance Act on September 3, 2015 which addresses employers’ responsibilities as they relate to criminal background checks. The law, set to take effect on Tuesday, October 27, 2015, is designed to delay criminal background screening to allow candidates an opportunity to interview and be considered for jobs before potential elimination by a background check. Under the Fair Chance Act, New York City employers are prohibited from inquiring or obtaining any statement about an applicant’s criminal background until after a conditional offer of employment has been made.  For purposes of the Act, “any statement” means a statement communicated in writing or otherwise to the applicant for purposes of obtaining criminal background information regarding: (i) an arrest record; (ii) a conviction record; or (iii) a criminal background check.

While we’ve outlined the parameters of this law in previous blog posts, there was one provision that was a little unclear until now.

  • Before an employer takes adverse action (e.g. rescind a job offer), the employer is obligated to provide the applicant with: (1) a copy of the New York Corrections Law, Article 23-A; (2) a copy of the document on which the decision was based (the consumer report); and (3) a copy of the employer’s written analysis conducted to make this determination.
  • The written analysis should include the decision maker’s consideration of the factors listed in Article 23-A and its determination as to whether the criminal history is directly related to the position sought or otherwise poses an unreasonable risk as delineated in 23-A.

Introducing the Fair Chance Act Notice

On Friday, the New York City Commission on Human Rights (NYCCHR) distributed the Fair Chance Act Notice form which must be completed and sent to the candidate before taking any adverse action.

Fair Chance Act

It is important to recognize that these responsibilities are requirements regardless of whether you conduct the background check in house or if you outsource to a background screening company. Further, you must adhere to these requirements regardless of whether you intend to employ the individual in New York City or not. If the candidate currently resides in New York City, then these requirements must be followed.

For a complete list of the New York City Fair Chance Act requirements, see below:

  • After (and only after) a conditional offer has been made, an employer can obtain consent (authorization and disclosure) to run a criminal background check (obtain a “consumer report”).
  • After running the background check, if the employer conducts an analysis and adverse action is warranted under New York Corrections Law 23-A, the employer can proceed with taking adverse action based on the information.
  • Before an employer takes adverse action (e.g. rescind a job offer), the employer is obligated to provide the applicant with: (1) a copy of the New York Corrections Law, Article 23-A; (2) a copy of the document on which the decision was based (the consumer report); and (3) a copy of the employer’s written analysis conducted to make this determination.
  • The written analysis should include the decision maker’s consideration of the factors listed in Article 23-A and its determination as to whether the criminal history is directly related to the position sought or otherwise poses an unreasonable risk as delineated in 23-A.
  • The employer must then hold the job opportunity open for a reasonable amount of time, but not less than three business days, so that the applicant can respond with additional or mitigating information.
  • If a criminal record is discovered or disclosed post conditional hire and the employer learns through a background check that the candidate failed to disclose a conviction, the employer must follow the Fair Chance Act process and give the candidate a copy of the background check and notice of intent to take adverse action even if the reason for the adverse action is dishonesty/failure to disclose.

Our friends at Seyfarth Shaw also published a helpful guide for what employers can do to get in compliance.

Good luck with your new found work and please, please, please don’t shoot the messenger.

EmployeeScreenIQ Employee Spotlight: Danielle Gilchrist

 

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At EmployeeScreenIQ, we view our employees as our biggest strength. Each month we’ll be spending time with a different employee to highlight their excellence and learn about them and what they do here at EmployeeScreenIQ.

This month, we’re featuring Danielle Gilchrist, Manager, Enterprise Client Group. Danielle is responsible for managing premier client relationships and ensuring the background check programs are in line with client expectations. Danielle has been working at EmployeeScreenIQ for 9 years.

A resounding message from co-workers and clients is everyone considers Danielle dedicated to her role and always there to help.

Allyson E., human resources compliance administrator at Hospice Compassus said, “I appreciate the dedication Danielle has to our account. I am very comforted to know that she is there for answers and support. She is truly a joy to work with daily.”

Get to know Danielle…

How did you first learn about EmployeeScreenIQ?
I knew our EVP from a previous job. He told me about EmployeeScreenIQ and I said, “Sign me up!”

What aspect of your role do you enjoy the most?
I enjoy getting to know our clients and what is important to them in a screening program, educating them on trends in the industry and being a partner that they can trust and feel comfortable working with.

What is your favorite part about working at EmployeeScreenIQ?
The people! We have a great team here in the building, we are all passionate about what we do and are basically one big happy family!

What is one thing you couldn’t live without?
Chocolate. There have been times where I race my boss to the vending machine to get the last candy bar.

What kinds of hobbies and interests do you have outside of work?
I spend a lot of time with my family, I always enjoy baking delicious treats for my co-workers. I like participating in hot yoga classes, going to concerts and visiting animal shelters…all sorts of stuff!

What is your favorite movie and book?
Movie: The Lion King
Book: For One More Day by Mitch Albom

What’s on your iPod?
Mostly classic rock and some 80s

What is the first concert you attended?
The Beach Boys

What is the first thing you would buy if you won the lottery?
I would build my mom her dream house.

Favorite place in Cleveland?
I would have to go with the zoo.

Many Employers Not in Compliance With EEOC Criminal Records Guidance, EmployeeScreenIQ Research Shows

CLEVELAND, Oct. 21, 2015 /PRNewswire/ — When the Equal Employment Opportunity Commission’s criminal records guidance was made stricter in 2012, employers reacted with concern and confusion. A survey released this year by EmployeeScreenIQ showed that while more employers are following the EEOC guidance, many still admit to being out of compliance — a situation that puts them at considerable legal risk.

Federal Ban the Box Bill Introduced in Both Houses of Congress

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This post is courtesy of the National Association of Professional Background Screeners’ (NAPBS) Government Relations Committee.

“Ban the box” legislation has been introduced for the first time at the federal level, reflecting a broader trend witnessed in dozens of states and municipalities.  On September 10, a bi-partisan group of lawmakers in both houses of Congress introduced the Fair Chance Act (S. 2021  / H.R. 3470), which would prohibit federal agencies or contractors from asking prospective employees about whether they have a criminal record before a formal job offer has been extended.  Once a conditional offer of employment has been made, an employer would be permitted to ask about the applicant’s criminal record and revoke the offer based on the results of a criminal background check.

The proposed law includes exceptions for “sensitive positions,” including law enforcement, national security, and positions with access to classified information. Protection is provided in the bill for whistleblowers who report coworkers for not following the law, and penalties range from a warning for a first violation to suspensions of increasing length, up to a $1,000 fine for subsequent violations.

The Fair Chance Act was introduced by Senator Cory Booker (D-NJ) and Representative Elijah Cummings (D-MD).  Co-sponsors of the bill are Senators Ron Johnson (R-WI); Tammy Baldwin (D-WI); Sherrod Brown (D-OH); and Joni Ernst (R-IA); Representatives Darrell Issa (R-CA); Sheila Jackson Lee (D-TX); Earl Blumenauer (D-OR); Bonnie Watson Coleman (D-NJ) Cedric Richmond (D-LA); John Conyers (D-MI), and Bobby Scott (D-VA).

The lawmakers supporting the bill said that as many as 70 million people with criminal histories may face barriers to employment and highlighted that 18 states and more than 100 local entities have already enacted similar measures, with private employers following suit by adopting internal company policies to ban the box.

The Fair Chance Act is currently pending in committee in both chambers, and will be the subject of a hearing on October 7 in the Senate Homeland Security and Government Affairs Committee.

To read the Fair Chance Act please (S. 2021 / H.R. 3470).

The EEOC’s Criminal Background Screening Guidance 3 Years Later

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By definition, guidance is supposed to help resolve a problem. Yet, for employers, the U.S. Equal Employment Opportunity Commission’s (EEOC) 2012 update to its criminal background screening guidance has instead created a problem: uncertainty about how to conduct criminal background checks without significant legal risk.

GE Doesn’t Need TV Commercials, It Needs a Visionary

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Blame it on Steve Jobs.

Have you seen the latest recruitment TV commercials by mega-company GE? (Don’t call ’em General Electric.)

Now, I’m not here to hate on the commercials, or even the strategy to use traditional channels to market job opportunities and change candidate attitudes. Attracting top engineering talent is no easy task. I even applaud the effort. I’m even confident it’ll attract a good number of engineers. The best engineers? That’s debatable.

The company, however, would fare much better if it had a visionary leader that connected with the digerati they desire to desperately. Do you know the CEO of GE? Me neither. CFO? Nope. Founder? Nah. Do they have a developer conference like Facebook’s F8? No clue.

The Cult of Personality, similar to the one Apple’s Steve Jobs oozed, is now a 24/7 offering. And we all – including job candidates and employees alike – have an insatiable appetite.

So it’s no surprise Twitter cofounder Jack Dorsey was remade the company’s CEO this week after years of floundering and a nosediving stock price. The company has been bleeding talent for months, and Dorsey’s greatest value may be his ability to come back and boomerang former employees and inspire new ones to come on board.

Why? Because Dorsey is a visionary. The list of successful companies with such men and women is long. Larry Page. Mark Zuckerberg. Aaron Levie. Jeff Bezos. Marissa Mayer. Howard Schultz. Elon Musk. Sheryl Sandberg. And on and on.

Top talent wants to work for such visionary leadership. People want to be led. People want to be inspired. People want to work with the best. And they want to be part of something bigger than themselves.

Employers with visionaries keep their employees. They attract new ones. Any old and crusty company looking to improve its recruitment efforts should take note. And if they can’t make them CEO, find some other way to bring them to the table. Snapchat making former Apple executive Scott Forstall an advisor is one such strategy.

Hey, maybe Forstall should be GE’s new CTO. Now that’s a recruitment strategy.

Tell Your Story Better with Video Interviews

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The job market is hot right now. According to the Bureau of Labor Statistics, over 2.5 million new jobs were added to the market last month alone. Yet in the struggle to recruit top talent, one remains: how do you best tell your story? Both employers and candidates struggle with this challenge. How do employers communicate their company’s employer brand? And how do candidates best communicate their personal story? The answer is surprisingly the same for both: video interviews.

Video Interviews Allow Recruiters and Candidates to Tell their Stories Better
The human resources industry has been at the forefront of a revolution. HR and Talent Acquisition have become leaders of change for an organization. This includes adopting new technologies and new approaches towards hiring candidates. More organizations are concerned with the candidate experience than ever before. And more organizations have been using technology such as video interviews to enhance this candidate experience.

Find out how video interviews can help both recruiters and candidates to tell their story better:

1. Video Interviews Offer a Visual Story.
It’s no secret that people respond better to visuals. Would you rather read a 20 page book on how to use something or would you prefer to watch a 2 minute video tutorial? Sites like Youtube have exploded in popularity because people are so drawn to this visual medium. Video interviews offer the same visual experience. Gone are the days when recruiters solely relied on methods like a phone screen. Phone screening can miss the important visual cues that indicate whether a candidate is passionate about what they’re saying or not.

2. Employers Enhance their Candidate Experience with Video Interviews. The candidate experience has become an important piece of your employer brand. Candidates aren’t drawn to businesses that don’t present the details of their story anymore. Increasingly, they want to know what values the company embraces, the faces behind the company, and any available information they can get. Video interviews offer a wonderful way for employers to immerse candidates in their employer brand. Picture a candidate logging on and being welcomed by a member of your team on video.

Candidates can view videos to learn more about company culture, team members, and more. Video interviews offer businesses the ability to draw a candidate in and get them excited about the experience. And who doesn’t love the cool high tech experience? Our research has shown that 60% of candidates who take video interviews prefer the experience to all other kinds of interviews. That’s a huge population of candidates who were drawn into the immersive environment and got excited about the job.

This leaves candidates with a wonderful feeling when they walk away from their interview. GreenJobInterview’s best in class support team further enhances the experience because they act as an extension of the business’ recruiting team. Smiling knowledgeable customer success managers perform tech checks to ensure a candidate is familiar with the technology and that their system can support the platform.

This also feeds nicely into the candidate experience with background checks. Following up a positive video interviewing experience with an intuitive screening process means an employee is coming into your organization on solid ground.

3. Video Interviews Allow Recruiters and Candidates Freedom. Video interviews are mobile. They can be accessed via smart devices anywhere in the world with internet access. So if your recruiting team is traveling to an exciting show in Las Vegas, or sitting down to a meeting in Prague, they’re able to conduct their video interviews. This is a compelling piece of the company’s story. Imagine being able to show off not only the business’ technical advancement, but how far their work can take them.

Candidates also love the ability to join video interviews from home, the baseball field, or anywhere with an internet connection. This helps showcase the candidate better and helps a recruiter to get to know them in a more intimate manner. Suddenly, your recruiting team has a strong visual of a candidate who loves volunteering so much they’ve planted a community garden. Video interviews connect the dots and bring people closer while allowing them immense freedom.

Everybody’s got a story. If you’re looking for an exciting way to tell your story better, try video interviews. This easy to use technology can enhance the candidate experience, attract more qualified individuals and connect interviewers and candidates in a more meaningful way. What story are you going to share?

New York, New York Part II: The Stop Credit Discrimination in Employment Act

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New York City has two new background screening laws that are about to shake up the status quo for employers. Yesterday we looked at the Fair Chance Act—here’s the link if you missed it. Today we look at the recently enacted restriction on credit reports and some recent guidance that has been published to help employers comply.

By way of background, the Stop Credit Discrimination in Employment Act (SCDEA), which went into effect on September 3, 2015, prohibits employers from using an individual’s consumer credit history when making employment decisions about applicants or current employees.  The law includes a limited set of exemptions for sensitive positions which include the following:

  • an employer, or agent thereof, that is required by state or federal law or regulations or by a self-regulatory organization as defined in section 3(a)(26) of the securities exchange act of 1934, as amended to use an individual’s consumer credit history for employment purposes
  • persons applying for positions as or employed as police officers or peace officers, as those terms are defined in subdivisions thirty-three and thirty-four of section 1.20 of the criminal procedure law, respectively, or in a position with a law enforcement or investigative function at the department of investigation;
  • in a position that is subject to background investigation by the department of investigation, provided, however, that the appointing agency may not use consumer credit
  • in a position in which an employee is required to be bonded under City, state or federal law;
  • in a position in which an employee is required to possess security clearance under federal law or the law of any state;
  • in a non-clerical position having regular access to trade secrets, intelligence information or national security information;
  • in a position: (i) having signatory authority over third party funds or assets valued at $10,000 or more; or (ii) that involves a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer.
  • in a position with regular duties that allow the employee to modify digital security systems established to prevent the unauthorized use of the employer’s or client’s networks or databases.

Enforcement

The New York City Commission on Human Rights (NYCCHR) is charged with enforcement of the law, and it recently issued enforcement guidance on the SCDEA.  The enforcement guidance makes it clear that the NYCCHR is going to interpret the law very broadly and limit the use of the exemptions. In other words, employers need to exercise extreme caution if relying on an exemption.

Specifically, the NYCCHR’s enforcement guidance states that employers claiming an exemption have a duty to show that the position or role falls under one of the eight exemptions in the SCDEA and that they must inform candidates or employees of the claimed exemption.  Employers need to keep a detailed written record of the claimed exemption under which the credit check is performed, the name and contact information of all applicants or employees considered for the exempted position, the duties and qualifications for the position, a copy of the applicant or employee’s credit history that was obtained pursuant to the claimed exemption, and a record of how the credit history was obtained.  This information needs to be kept for five years, and employers need to be prepared to furnish this information to the NYCCHR upon request.

Seyfarth Shaw’s employment law team (including employment credit expert Pam Devata), provided some clarification on the NYCCHR enforcement guidance following a recent presentation on September 28, 2015, where NYCCHR staff attorney, Paul Keefe, held a question and answer forum for management counsel and employers. According to Seyfarth’s analysis, the NYCCHR clarified the following interpretive positions:

  • The “FINRA Exception,” detailed in the NYCCHR’s guidance is broader than indicated by the guidance.  The guidance states that individuals required to register with FINRA are exempt from the SCDEA, referencing by footnote FINRA Rule 1230.  However, FINRA Rule 1230 does not encompass all employees required to register with FINRA.  The NYCCHR clarified that the intent is to exempt all positions required to register with FINRA, and further, to cover individuals required to register with similar self-regulatory organizations, such as the National Futures Association.
  • Likewise, the exception for “positions that allow the employee to modify digital security systems protecting the employer or client’s networks or databases” is broader than previously suggested.  For instance, the guidance suggests that this exemption is narrow and will only cover “Chief Technology Officers” or “senior information technology executives.” However, larger employers with additional positions that do not have a CTO or executive title but are able to modify the digital security systems would likewise be able to conduct credit checks on those employees.
  • Should an exemption apply, employers are required to maintain an exemption log for five years, detailing (1) the claimed exemption; (2) why the claimed exemption covers the exempted position; (3) the name and contact information of all applicants considered for the position; (4) the job duties of the exempted position; (5) the qualifications necessary to perform the exempted position; (6) a copy of the applicants’ credit history that was obtained; (7) how the credit history was obtained; and (8) how the credit history led to the employment decision.  It will be the employer’s burden to prove the exemption was properly applied through this documentation.
  • Finally, and perhaps most significantly, the NYCCHR clarified that the “intent of the law” is to avoid reference to credit checks at any point in the application process, and even after a conditional offer is provided, unless an exemption is met.  Consequently, the NYCCHR will take a strict interpretation of the statute, and clarified that it would likely view FCRA Disclosure and/or Acknowledgment forms referencing credit history as noncompliant with the law, even if the employer does not ultimately obtain the applicant’s consumer credit report.  This is not referenced anywhere in the statute or the guidance.

Penalties

NYCCHR can impose civil penalties for violations of the SCDEA of up to $125,000, and of up to $250,000 for violations that are the result of willful, wanton, or malicious conduct.  These penalties are in addition to other remedies available to private litigants who claim that the employer’s use of their credit history violates the New York City Human Rights Law.  Remedies under the New York City Human Rights Law may include, but are not limited to, back and front pay, along with compensatory and punitive damages and attorney’s fees.

The Bottom Line

  • DO exercise extreme care when using credit reports in the employment process in New York City. The NYCCHR is interpreting the exemptions in a very narrow way.
  • DON’T include a reference to credit checks on your disclosure or authorization forms in New York City unless you meet one of the exemptions.
  • DO follow the strict requirements of the NYCCHR for notice to applicants and record-keeping, including the 5 year retention period.
  • DO check the NYCCHR website for more information including FAQs that they will use as an ongoing forum to answer employers questions.

As always, consult with you legal counsel and your screening firm to make sure that your policies and procedures are compliant with this and other screening laws.

The EEOC’s Criminal Background Screening Guidance 3 Years Later: 5 Lessons Employers Need to Know

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By definition, guidance is supposed to help resolve a problem. Yet, for employers, the U.S. Equal Employment Opportunity Commission’s (EEOC) 2012 update to its criminal background screening guidance has instead created a problem: uncertainty about how to conduct criminal background checks without significant legal risk.

Fortunately, the past three years—especially the EEOC’s efforts to enforce its guidance during that time—have revealed five lessons that can boost your confidence in the compliance of your criminal background screening practices:

Download our article, “The EEOC’s Criminal Background Screening Guidance 3 Years Later: 5 Lessons Employers Need to Know” to learn more about these five lessons:

  • Do not practice blanket exclusions of candidates with criminal records.
  • There are no “safe harbors” for state law conflicts.
  • Individualized assessments are de facto requirements.
  • Banning the box is recommended for avoiding EEOC scrutiny.
  • If a claim is filed against you by the EEOC, anticipate a systemic investigation of your criminal background screening practices.