Tag Archives: hiring

NEW FORM – Federal Consumer Financial Protection Bureau Releases New Model FCRA Summary of Rights

On September 12, 2018, the federal Consumer Financial Protection Bureau issued new versions of the “A Summary of Your Rights Under the Fair Credit Reporting Act” disclosure form in both English and Spanish.  Under the Fair Credit Reporting Act, employers and background check companies are required to provide the disclosure form to employees and job applicants at certain times during the background check process.

Employers are required to start using this form no later than September 21, 2018.  In addition to using this new form, employers are  required to provide the applicant/employee with a notice regarding their new security freeze rights available under the Economic Growth, Regulatory Relief, and Consumer Protection Act.  This notice is included in the new form.

It is recommended that all employers update their forms prior to September 21, 2018, to avoid any gaps in compliance.

Michigan Invalidates Local Ban-the-Box Laws

On March 26, 2018, Michigan passed an amendment to its Local Government Labor Regulatory Limitation Act that prohibits local government bodies from adopting or enforcing any local policy, resolution, or ordinance regulating information an employer or potential employer may ask an applicant for employment verbally or in writing (so called salary history and ban-the-box laws).

This new amendment comes in response to municipalities such as Detroit and Kalamzoo passing ordinances that prohibit employers from making inquiries into applicants’ salary and criminal histories. Such local ordinances will no longer be enforceable once the law takes effect on June 24, 2018.

In spite of this pro-employer development, Michigan employers should continue to exercise caution in the information they request of job applicants.  Both state and federal law place extensive limitations on the questions employers may ask applicants during the hiring process, including prohibitions on inquiries relating to age, disability, height, weight, marital status, family status, gender, ethnicity, and the list goes on.

NEW LAW: California Has Officially “Banned the Box”

Attention California employers … on October 12, 2017, California Governor Jerry Brown signed AB 1008 into law.  This new law amends the California Fair Employment and Housing Act (FEHA) and, starting January 1, 2018, officially “bans the box” on California (in other words, it prohibits California employers from inquiring about an applicant’s criminal history early in the hiring process).

This new law applies to both public and private employers with five or more employees.  Under the law, employers are prohibited from inquiring into an applicant’s conviction history until after a conditional offer of employment is made.  Specifically, employers are prohibited from doing the following:

  • Including any question that seeks the disclosure of an applicant’s conviction history on any application for employment — before the employer makes a conditional offer of employment to the applicant.
  • Inquiring into or considering the conviction history of the applicant, including any inquiry about conviction history on any employment application, until after the employer has made a conditional offer of employment to the applicant.
  • Considering information about any of the following while conducting a conviction history background check in connection with any application for employment:
    • Arrest not followed by conviction.
    • Referral to or participation in a pretrial or posttrial diversion program.
    • Convictions that have been sealed, dismissed, expunged, or statutorily eradicated pursuant to law.

In addition, if an employer intends to deny employment based on the applicant’s conviction history (after conducting a lawful, post offer criminal background check), the employer must go through the “fair chance process” before employment is denied.

Under this process, employers must take the following steps:

  1. Make an individualized assessment of whether the applicant’s conviction history has a direct and adverse relationship with the specific duties of the job that justify denying the applicant the position.While not required to be in writing, it is recommended that employers document the assessment in writing

    In making the assessment, the employer must consider all of the following:

    1. The nature and gravity of the offense or conduct.
    2. The time that has passed since the offense or conduct and completion of the sentence.
    3. The nature of the job held or sought.

 

 

  1. If, following the assessment, the employer makes a preliminary decision that the applicant’s conviction history disqualifies the applicant from employment, the employer shall notify the applicant of this preliminary decision in writing.That notification may, but is not required to, justify or explain the employer’s reasoning for making the preliminary decision.

    The notification must contain all of the following elements:

    1. Notice of the disqualifying conviction or convictions that are the basis for the preliminary decision to rescind the offer.
    2. A copy of the conviction history report, if any.
    3. An explanation of the applicant’s right to respond to the notice of the employer’s preliminary decision before that decision becomes final and the deadline by which to respond. The explanation shall inform the applicant that the response may include submission of evidence challenging the accuracy of the conviction history report that is the basis for rescinding the offer, evidence of rehabilitation or mitigating circumstances, or both.

 

  1. After receipt of the notification, the applicant has at least five business days to respond to the notice before the employer may make a final decision.If, within the five business days, the applicant notifies the employer in writing that the applicant disputes the accuracy of the conviction history report and that the applicant is taking specific steps to obtain evidence supporting that assertion, then the applicant shall have five additional business days to respond to the notice.

 

  1. The employer must consider information submitted by the applicant (explained above) before making a final decision.

 

  1. If an employer makes a final decision to deny an application solely or in part because of the applicant’s conviction history, the employer must notify the applicant in writing of all the following:
    1. The final denial or disqualification. The employer may, but is not required to, justify or explain the employer’s reasoning for making the final denial or disqualification.
    2. Any existing procedure the employer has for the applicant to challenge the decision or request reconsideration.
    3. The right to file a complaint with the DFEH.

This new law does not apply to the following employers:

  • Positions for which a state or local agency is required by law to conduct a conviction history background check,
  • Criminal justice agencies,
  • Farm labor contractors, and
  • Employers required by state, federal, or local law to conduct background checks or restrict employment based on criminal history.

Take home for employers

With this new law (and the accompanying salary history ban, discussed here), it is critical that all California employers review the hiring practices to insure compliance with the new laws.  In addition, employers need to provide training to those people involved in the hiring process about the new ban the box requirements, as these requirements impact the interview process. Finally, all California employers should review their job applications and verify that any inquiries regarding criminal history are removed from the application before January 1st.

NOTE:  This new law does not supersede the local ordinances (i.e. in Los Angeles and San Francisco).  Therefore, employers in these locations need to comply with the local ordinance requirements as well.

NEW LAW: California Passes Salary History Ban

Attention California employers … on October 12, 2017, California Governor Jerry Brown signed AB 168 into law.  In short, this new law amends the California Fair Pay Law by prohibiting all California employers from inquiring into an applicant’s salary history starting January 1, 2018.

Specifically, under the new law, all California employers are required to follow these rules during the hiring process:

  • Employers cannot use (rely on) the salary history information of an applicant when determining whether to offer employment to an applicant or
  • Employers cannot use (rely on) the salary history information of an applicant when determining what salary to offer an applicant.
  • Employers cannot seek salary history information, including compensation and benefits, about an applicant.
  • Upon reasonable request, employers must provide the pay scale for a position to an applicant applying for employment.

It is important to note that the law does not prohibit an applicant from voluntarily disclosing salary history information to a prospective employer. If an applicant voluntarily and, without prompting, discloses salary history information to a prospective employer, the law does not prohibit that employer from considering the voluntarily disclosed salary history information.

Next step for employers

California employers should review this new law and provide training to those people involved in the hiring process about the new requirements, as these new requirements impact the interview process.  In addition, all California employers should review their job applications and verify that any inquiries regarding prior salary history or wage rates are removed from the application before January 1st.

What Not to Do When Your Job Applicant is Expecting

It is very important for prospective employers to tread carefully when they learn an applicant is pregnant. Brown & Brown of Florida, learned an expensive lesson on pregnancy discrimination and recently settled a legal claim (EEOC v. Brown & Brown of Florida, Inc.) related to this issue.

The Case

The plaintiff, Nicole Purcell applied for an entry-level position at brokerage firm of Brown & Brown in Daytona, Florida. She was shortlisted for the position after multiple rounds of interviews. The company gave her an offer of employment. Once the plaintiff received the offer, she contacted the company’s Employee Services Coordinator to accept and asked the coordinator about maternity benefits, while announcing that she is pregnant.

About 30 minutes after the call, the coordinator sent the plaintiff an email rescinding the job offer citing that the company needed somebody in the position “long term.”

The plaintiff filed a charge of discrimination with the U.S. Equal Employment Opportunity Commission (EEOC). The EEOC in turn filed a federal lawsuit on her behalf against Brown & Brown. This lawsuit was later settled for $100,000 – quite a hefty price tag for what amounts to 30 minutes of employment.

Takeaways for Employers

Had the company engaged in an interactive conversation with the applicant regarding any limitations she might have developed related to her pregnancy, and whether any potential limitations existed affecting her ability to do her job that could be accommodated, it is possible that much that followed could have been avoided.

Here are some DOs-and- DON’Ts that might be helpful for employers faced with a similar situation.

  1. Don’t assume that a pregnant applicant (or employee) is unable to do a job or will be absent for an extended period of time.
  2. Do engage in the interactive process with the pregnant employee (or applicant) and discuss any limitations she might have performing essential job functions because of her pregnancy and what accommodations can be made.
  3. Do document all discussions with pregnant employees (or applicants) relating to the interactive process and possible accommodations.
  4. Do assure the pregnant employee (or applicant) that the company complies with all federal and state laws regarding pregnancy leaves.
  5. Don’t renege an offer of employment (or terminate an existing employee) because the individual is pregnant.

New DFEH Regulations Regarding Criminal Background Checks Effective July 1, 2017

The California Department of Fair Employment and Housing (“DFEH”) recently finalized new regulations (“Consideration of Criminal History in Employment Decisions Regulations“) that further limit an employer’s ability to consider an individual’s criminal history when making employment-related decisions.  These new regulations come into effect on July 1, 2017.

The new regulations are focused on preventing potential “adverse impact” on protected groups by employer’s overly broad use of applicants’/employees’ criminal history when making employment decisions.

Under the new regulations, employers are required to establish that the criminal history information sought is job-related and consistent with a business necessity. In doing this, an employer must be able to show that the company’s policy or practice of considering criminal history is narrowly tailored to meet the specific circumstances for which the information is sought and that the company takes the following factors into consideration when making an adverse decision based on criminal history:

  • the nature and gravity of the offense or conduct;
  • the time that has passed since the offense or conduct and/or completion of the sentence; and
  • the nature of the job held or sought.

Most importantly, the new regulations created a rebuttable presumption that an organization’s bright-line policy or practice automatically disqualifying all applicants with certain types of past convictions are not sufficiently tailored to the specific circumstances of the job.

Impact on California Employers

Employers should reexamine their current policies and practices of using criminal histories in employment decisions and verify that their practices comply with the new regulations as well as any local ordinances (like the Los Angeles and San Francisco Ban-the-Box ordinances) before these regulations take effect.  If you have any concerns about your organization’s practices, please consult with an HR Professional or competent legal counsel.

Could your organization potentially be accused of Employment Discrimination?

Federal law (Title VII) prohibits discrimination based on: race, color, religion, sex (including pregnancy), national origin, mental or physical disability, age, gender, genetic information, and citizenship.

Recently Palantir Technologies in Palo Alto, CA settled a claim of $1.66 million for discrimination against Asian applicants in the hiring and selection process of their engineering positions, even though they employed and hired several Asian candidates. We can take away two lessons from this case:

  1. Take care when using an Employee Referral Program in your recruitment process.
    1. Although your best employees may refer great applicants, they may not refer an adequate flow of diverse applicants. The EEOC found that Palantir’s preference for referrals in the screening process resulted in disproportionate number of non-Asians in the applicant pool (adverse impact).
      • If you use an Employee Referral Program, find ways to assure you are encouraging a diverse applicant pool and test your results.
  2. Look at the numbers.
    1. The hiring ratio for 3 of Palantir’s engineering positions were found to be grossly discriminate.
    2. Check your hiring ratio’s.
  • One way to check your hiring ratio’s is by using the 4/5ths rule (or 80% rule). Although use of this test will not assure that the EEOC will not pursue a claim, it is one tool that they have used to show positive or negative diversity in the hiring process.
  • More recently the EEOC has been using a different hiring test. In the case against Palantir the EEOC compared the company’s hiring rate of Asian candidates to the rate that would likely occur if Palantir simply selected from the qualified candidate pool randomly. In this case, the position of Quality Assurance Engineer Intern Palantir hired 17 non-Asian’s and 4 Asian applicants (19%) from a pool of 130 qualified applicants (73% of the applicants were Asian). The EEOC concluded the likelihood that they would choose an Asian was 1 to 1 Billion.

Additional Information For Employers

Warning to employers – do not ignore reasonable accommodations during the hiring process!

S&B Industry, Inc., a Fort Worth cellphone repair facility has learned an expensive lesson regarding its obligation to provide reasonable accommodation to job applicants. Following receipt of an EEOC change, the employer has agreed to pay $110,000 to settle an EEOC lawsuit that alleged that the company violated federal law by denying employment to two hearing impaired individuals. The suit also alleged that S&B Industry denied the applicants a reasonable accommodation during the application process.

The case

According to the lawsuit, two young women, Katelynn Baker and Tia Rice, went together to apply for jobs in the company’s cellphone repair facility. The two girls went through an interview and orientation process during which they used American Sign Language to speak to each other, and the company became aware that they were hearing impaired.

During this process the girls asked a supervisor to provide written information about the position they were applying for. At first the supervisor complied, but then refused to continue writing information for Baker and Rice, thereby refusing to provide them with a reasonable accommodation. Baker and Rice were then told that S&B Industry would not be hiring them.

The Americans with Disabilities Act (ADA) protects employees and applicants from discrimination based on their disabilities and requires employers to make reasonable accommodations to employees and applicants’ disabilities as long as this does not pose and undue hardship.

Take away for employers:

The ADA prohibits covered employers from discriminating against people with disabilities in the full range of employment, including recruitment and hiring. An employer is free to hire the applicant of their choice as long the decision is not based on a disability. In addition, the employer should provide a reasonable accommodation to applicants so that they have an equal chance to be successful during the hiring process.

Joel Clark, senior trial attorney for the EEOC, added, “Managers refused to discuss these applicants’ reasonable requests for accommodation, but instead just assumed they could not do the job.  The ADA was enacted to prevent that kind of misguided, fear-driven reaction.”

Another Costly Lesson about Sex Discrimination

Nestlé Waters North America, the world’s largest bottled water company, has learned a $300,000 lesson about sex discrimination. The company recently settled a lawsuit with the EEOC relating to sex discrimination.

In this case, the company had created a new position (business manager) in its Florida office, One of the applicants (a female employee who had been with the company for 20 years) was overlooked for the position and instead the company hired a male employee who did not meet the minimum requirements for the role as described in the job description. The company later terminated the female employee as the result of a purported “consolidation;” however, of the 14 Florida zone managers and zone manager supervisor positions, only the female employee lost her job as a result of this consolidation.

Following the filing of the lawsuit, the company settled the claim for $300,000. The company is also required to develop and implement an anti-sex discrimination policy and to provide annual training regarding all forms of sex discrimination, including sex stereotyping, to its Florida management team.

Take home for employers

This case serves as an important reminder for employers regarding discrimination in the workplace.

When making hiring decisions, employers must exercise caution and hire the best candidate for the job regardless of gender (or any other protected class). If an employee is hired who does not meet the minimum qualifications for a job (based on a job description developed by the employer), this could serve as an indicator of a unlawful basis for the hiring decision – especially if a better-qualified candidate is rejected.

When making termination decisions, these must also be made with caution and not based on an employee’s protected class.

Connecticut Follows Suit With New Ban the Box Legislation

On June 1, 2016, Connecticut Governor Dannel Malloy signed House Bill 5237 (entitled “An Act Concerning Fair Chance Employment.”) into law. The new law prohibits most employers from requesting criminal history information on an initial employment application.

The new law applies to all Connecticut employers – regardless of size. Under the new law, employers will be prohibited from seeking information about prior arrests, criminal charges, or convictions as part of an initial employment application.

There are two exceptions to the above-stated prohibition. The prohibition does not apply when

  1. An employer is obligated pursuant to a federal or state law to ask about such criminal history for the position in question; and
  2. A position requires a security, fidelity, or equivalent bond.

However, if these exceptions do apply, employers must include certain notices on the application along with the criminal history inquiries. These notices must be set forth in a clear and conspicuous manner on the application and must state the following:

  • The applicant is not required to disclose the existence of any arrest, criminal charge, or conviction the records of which have been erased pursuant to sections 46b-146, 54-76o or 54-142a of the Connecticut General Statutes;
  • Criminal records subject to erasure under state law are those records pertaining to a finding of delinquency or that a child was a member of a family with service needs, an adjudication as a youthful offender, a criminal charge that has been dismissed or dropped, a criminal charge for which the person has been found not guilty or a conviction for which the person received an absolute pardon; and
  • Any person whose criminal records have been erased shall be deemed to have never been arrested and may so swear under oath.

The new law does not erase existing restrictions that have been imposed on employers regarding an applicant/employee’s criminal history. Specifically, employers are still prohibited from

  • Rejecting an applicant or terminating an employee because of erased records and
  • Rejecting applicants or terminating employees because of a prior conviction for which the individual has received a provisional pardon or certificate of rehabilitation pursuant to Conn. Gen. Stat. § 54-130a, or a certificate of rehabilitation pursuant to Conn. Gen. Stat. § 54-108f.

Recommended Action

Connecticut’s new “ban-the-box” law goes into effect on January 1, 2017. Before that date, it is recommended that Connecticut employers review their existing application materials and job advertisements and verify that they are in compliance with the new law. In addition, employers should provide training to employees who are responsible for the hiring of new employees to verify that these employees are aware of the laws relating to criminal background inquiries.