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Recent Employment Laws Relating to Hiring

May 25, 2017

By Andrew P. Brucker and Marijana Predovan

In the last few years, new state and local laws have changed the types of questions, investigation, and considerations that an employer is allowed in the hiring process.  While most managers and boards are aware of the more well-known prohibitions in hiring, such as discriminating against race, age, or gender, it is important to understand other protected matters, such as an applicant’s criminal history, his or her salary history, and credit history.  What follows are four statutes to consider when hiring new employees.

New York Corrections Law Article 23-A

Article 23-A, is a long existing New York State law that was designed to prevent unfair discrimination against individuals with criminal records.  It applies to employers who have ten or more employees, and provides that employment may not be denied to an applicant due to a prior criminal conviction unless there is a direct relationship between the past crime(s) and the specific type of employment the applicant is seeking, or the employment would involve an unreasonable risk to property or to the safety or welfare of specific individuals or the general public.

In order to determine this, the employer must consider several factors set forth in the statute, including: (1) what types of duties are required and how the crime relates to the crime; (2) the time elapsed since the occurrence of the crime; (3) the age of the person when the crime occurred; (4) the seriousness of the crime; and (5) the legitimate interest of the employer in protecting property and the safety of individuals.  The Employer must keep in mind that the public policy of New York encourages employment of those previously convicted of crimes.  The law states that if the prospective employee possesses a certificate of good conduct, the employer must presume that the employee has been rehabilitated with respect to the offense.

In the event the employer denies the applicant employment, the applicant may request a written statement setting forth the reasons for denial, which the employer is required to provide.  Therefore, before rejecting an applicant due to his or her criminal history, the employer should make sure a written statement can be produced justifying the rejection based on the aforementioned factors outlined in this statute.

Fair Change Act (FCA) [Local Law 63 of 2015]

In 2015, the NYC Council determined that employers were not complying with Article 23-A, and so the Fair Change Act (FCA) was enacted.  The FCA prohibits an employer from asking an applicant for a job anything about his/her criminal history, nor can the employer conduct a criminal check.  An employer may only inquire as to noncriminal matters, such as requesting a resume and references.

Only after the employer makes a conditional offer can the employer inquire about the applicant’s criminal history and run a criminal check.

At that point, if a criminal record is found, the employer cannot just withdraw the conditional offer:  the employer must first conduct an Article 23-A analysis, using the Article 23-A factors discussed previously.  Therefore, the employer should ask about the circumstances of the each conviction in order to review the Article 23-A factors.   [During the inquiry, the employer must be careful not to ask about criminal matters that did not result in a conviction.]  If, after the Article 23-A analysis, the employer wants to withdraw its conditional employment offer, the employer must provide the rejected applicant with a written copy of any criminal history search it conducted and share with the applicant a written copy of the Article 23-A analysis.  The employer must allow the applicant at least three business days to respond to the employer’s concerns

The Human Rights Commission has indicated that it will vigorously enforce the FCA, and a civil penalty may be enforced.  In addition, the victim of the violation may be entitled to receive back pay and front pay, along with compensatory and punitive damages.

Local Law 67 of 2017

Local Law 67 is a NYC law enacted in May 2017 to prohibit employers from inquiring about an applicant’s salary history (and benefits) during any stage of the hiring process.  However, the employer is not prohibited from informing the applicant in writing or otherwise about the position’s proposed or anticipated salary or salary range. The employer is also allowed to obtain objective measures of the applicant’s productivity such as revenue, sales, or other production reports.

The City Council has stated that the purpose of the legislation is to break the cycle of gender pay inequity by reducing the likelihood that a person will be prejudiced by previous salary levels.

Local Law 67 does not prohibit an employer from attempting to verify with a background check an applicant’s disclosure of non-salary related information or conduct.

Stop Credit Discrimination in Employment Act (SCDEA) [Local Law 37 of 2015]

The SCDEA is a 2015 NYC law which prohibits employers from using consumer credit history when making employment decisions.  Consumer credit history includes a consumer credit report, a credit score, and information obtained directly from the individual regarding credit accounts, missed payments, debts, collections and credit limits.  It is a violation of the law to request consumer credit history from the applicant, or from a prior employer, or credit reporting company.  It is important to note that there is an exception to the law if the applicant is being considered for a position in which he or she would be responsible for funds or assets in excess of $10,000.

As a result of the enactment of the above statutes, it is important that employers refrain from asking about an applicant’s criminal history, salary history or credit history.  The foregoing is but a short summary of those laws.  If you would like further details, please contact Montgomery McCracken Walker & Rhoads.