New York, NY: Final Regulations for "Ban the Box" Go Into Effect, Expand Employee Rights

New York City “banned the box” nearly two years ago with the implementation of the Fair Chance Act (the “Act”). Recently, the NYC Commission on Human Rights published final regulations that expand upon the enforcement guidance implementing the Fair Chance Act. These regulations clarify existing obligations and impose additional obligations on employers performing background checks on potential and existing employees.

The final rule adds definitions to clarify many terms used in the Act and also adds an entirely new section prohibiting discrimination based on criminal history. The newly added § 2-04 strongly emphasizes that employers may not inquire into criminal history except under very specific circumstances. Key points of the amended final regulations, and the newly added section, are summarized below.

Prohibited Employer Actions under the Act

Employers will be considered in violation of the Act if they:

• Limit advertisements or employment applications in any way due to criminal history, e.g., posting a job ad that specifies the applicant must have “no felonies,” a “background check is required,” or “must have a clean record”;
• Make use of employment applications that require applicants to grant employers permission to run a background check or provide information regarding criminal history before a conditional offer of employment is made;
• Make any statement or inquire into an applicant’s pending arrest or criminal conviction before a conditional offer of employment is made;
• Use within NYC any standard form or template intended for use across multiple jurisdictions that requests or refers to criminal history, even if they include disclaimers directing applicants in NYC not to answer specific questions related to criminal history;
• Failure to provide an applicant with a written copy of any inquiry into criminal history, the employer’s Article 23-A analysis, or failure to hold the position open for three business days from date of receipt of both inquiry and analysis;
• Require the applicant or employee to disclose an arrest that resulted in a non-conviction at the time of disclosure.

Employers may not inquire into an applicant’s criminal history at any point before making a conditional offer of employment, and furthermore, cannot seek information about a non-conviction at any point in time. In addition to the above, the section sets forth more examples of prohibited employer actions, such as:

• Making any inquiry or statement, either written or verbal, related to an applicant’s criminal history during a job interview;
• Asserting in writing or verbally that those with a criminal history or certain convictions will not be considered for the position;
• Disqualifying an applicant for refusing to respond to any prohibited inquiry or statement about criminal history;
• Conducting an investigation in an applicant’s criminal history (including publicly available records or internet searches), whether such investigations are conducted by the employer or a third party on the employer’s behalf.

Employers may not be liable under the Act for unsolicited disclosures of criminal history information or inadvertent discovery of such information prior to a conditional offer of employment.

What if Adverse Employment Action Must be Taken?

Employers are permitted to solicit criminal or conviction history after a conditional offer of employment has been made. If the employer decided to withdraw the offer, the employer is required to engage in an “Article 23-A analysis.” This analysis evaluates a number of factors, such as whether the criminal history has any bearing on the prospective job’s duties or responsibilities, the length of elapsed time since the criminal offense that resulted in conviction, the seriousness of the convictions, and so forth.

Employers must then determine if there is a direct relationship between the conviction history and the prospective job, and/or if employing the applicant would invoke an “unreasonable risk” to property or safety and welfare of specific individuals or the general public.

Upon determination that either the direct relationship or unreasonable risk exemption applies, an employer who wishes to revoke an offer of employment is first required to provide the following to the applicant:

• A written copy of any inquiries made to collect information about the applicant’s criminal history, inclusive of each and every piece of information used to determine the applicant has a conviction history;
• A written copy of the Article 23-A analysis;
• A copy of the Fair Chance Act Notice provided by the NYC Commission’s website, or a comparable notice prepared by the employer;
• Reasonable time for the applicant to respond to the employer’s concerns of, at minimum, three business days;
• Consideration of any additional information the applicant provides during this period (e.g., proof of rehabilitation, or evidence that there were factual errors in the background check).

As part of the “Fair Chance Process,” employers must then consider if any additional applicant-provided information changes the Article 23-A analysis. If the employer still decides not to hire the applicant, written notice of that decision must be provided to the applicant.

Who is Exempt From the Act?

The rules of the Act do not apply to specific positions, such as any position required by federal, state, or local law to conduct background checks or positions where criminal history is barred by law, law enforcement, or certain self-regulated organizations indicated by the Securities Exchange Act of 1934.