A new bill introduced in the New Jersey Senate suggests that we may be next in line to join the "ban-the-box" reform movement that has swept the nation. The Opportunity to Compete Act, introduced on Feb. 21, is the latest of a series of reforms that aim to reduce barriers faced by ex-offenders attempting to re-enter the workforce, by prohibiting employers from asking about criminal convictions on employment applications (banning the yes-or-no check box where job seekers must indicate if they have a criminal history), and by otherwise regulating the use of criminal-history information. See S. 2586, 215th Leg., 2d Ann. Sess. (N.J. 2013). If the bill passes, New Jersey will join nine other states and 50 local jurisdictions, including its own cities of Newark and Atlantic City, which have already rallied behind the cause.

The reforms have been inspired, in part, by startling statistics cited by the National Employment Law Project, revealing that 65 million adults in America — nearly one in four — have a criminal record that may show up on a routine background check. Given that most employment applications inquire about criminal histories, and the fact that there has been a dramatic increase in the use of criminal background checks by employers in the hiring process, these Americans face significant hurdles in obtaining employment. The Opportunity to Compete Act, and reforms like it, seeks to address this concern as well as others raised by these circumstances.

Specifically, the bill seeks to regulate the use of criminal history information by employers making employment decisions, for the stated goal of "increas[ing] the productivity, health, and safety of New Jersey communities." As referenced in the introductory sections of the proposed law, the increased use of criminal background checks raises several concerns that favor the implementation of regulatory measures. First, the bill notes that background checks commonly contain errors and inaccuracies and, thus, could result in the wrongful exclusion of individuals from consideration for employment. Second, barriers to employment based on criminal records stand to affect not only the 65 million individuals referenced above, but also have the effect of disproportionately excluding racial and ethnic minorities from the workforce. Third, research demonstrates that obtaining employment significantly reduces the risk of recidivism among ex-offenders. Thus, aiding these individuals in finding employment is expected to result in healthier and safer communities.

While it is not yet clear that this bill will become new law, the recent promulgation of similar laws in Newark and Atlantic City is a good indicator that a statewide ban will garner significant support. With regard to the specific compliance requirements, here is a look at what the future likely holds for employers.

Obtaining Criminal-History Information

The bill applies to both public and private employers with five or more employees who do business, employ persons or even just take applications for employment within the state. These employers would be prohibited from asking applicants about their criminal history and from conducting a criminal background check until after a conditional offer of employment has been extended.

After a conditional offer of employment has been made, the bill requires employers seeking criminal history information to: (1) provide the candidate with written notice of the inquiry; (2) obtain the candidate’s consent; and (3) provide the candidate with a written "notice of rights," outlining the protections afforded by the law. These requirements are in line with similar notice and consent requirements for conducting such background checks, which have long existed under both state and federal law.

Considering Criminal-History Information

The bill prohibits employers making employment decisions from asking about and/or considering: (1) arrests that are not currently pending; (2) records that have been erased, expunged, pardoned or legally nullified; (3) juvenile delinquency adjudications; (4) violations of municipal ordinances; and (5) any record which has been sealed.

The bill does allow employers to consider the following:

Convictions of murder, attempted murder, arson, sex offenses and terrorism, regardless of when the crime was committed;

Convictions of crimes of the first through fourth degree occurring within the last 10 years;

Convictions of a disorderly persons offense occurring within the last five years; and

Pending arrests until the case is dismissed.

If such information is considered, the employer must also consider the degree of the candidate’s rehabilitation and good conduct, the accuracy of the criminal record, the amount of time that has elapsed since the conviction or release from custody, and the nature and circumstances of the crime committed and its relationship to the duties of the position sought. Moreover, the bill requires employers to make a good-faith effort to discuss with the candidate questions and concerns related to criminal history information, and to provide the candidate with the opportunity to offer an explanation or evidence of rehabilitation or inaccuracy.

Taking Adverse Actions Based on Criminal-History Information

If an employer rescinds a conditional offer of employment on the basis of the criminal-history information, the employer must provide the candidate with written notification of the decision, a copy of the results of the criminal history inquiry, a completed copy of an "Applicant Criminal Record Consideration Form," and a second copy of the Notice of Rights form. The Applicant Criminal Record Consideration Form specifies how an employer shall consider criminal history information and evidence of rehabilitation/inaccuracy, and includes questions to be answered by the employer in order to document that process. Completed forms must be retained for three years.

The bill grants candidates, who are suffering adverse employment actions based on criminal-history information, 10 days within which to provide evidence related to the accuracy and relevance of such information. During that 10-day period, however, employers are not required to keep the position open. If the position remains open upon receipt of the additional information, the employer is required to consider same. If the employer is not swayed to change its position, it must complete an additional section of the Applicant Criminal Record Consideration Form, and provide the form along with written notice of the final decision to the candidate within 45 days.

Advertisements

The bill also targets advertising practices that are fairly common, presumably for the purpose of ensuring that ex-offenders are not discouraged from submitting applications. Specifically, the bill prohibits any advertisement that expresses any limitation on eligibility for employment arising from a candidate’s criminal history, unless those limitations are mandated by law, i.e., law enforcement officers, childcare workers, etc. Moreover, advertisements indicating that final offers of employment are contingent upon a criminal background check are prohibited.

Confidentiality Requirements

The bill instructs that all criminal history information obtained must be kept confidential and shared only on a need-to-know basis for purposes of evaluating candidates. In addition, it strictly prohibits the disclosure of such information to any other entity, except as required by law.

Negligent Hiring Immunity

The bill addresses a concern raised by many in response to ban-the-box reforms in other jurisdictions — namely, that failure to request and review criminal-history information in making employment decisions could lead to liability under a theory of negligent hiring. It does so by specifically precluding a finding of such liability based on the exclusion from consideration of portions of a candidate’s criminal record, per the terms of the proposed law.

Penalties

If enacted, the New Jersey Division on Civil Rights shall enforce the law. Violations would result in civil fines ranging from $500 to $7,500 per violation, depending on the size of the employer and whether the employer has committed previous violations within the past three years. The bill does not provide for a private cause of action for employees.

Best Practice Tips

Employers relying on criminal-history information should keep an eye on the movement of this bill and, moreover, should consider taking steps now to limit the risk of potential liability. Such measures are prudent not only because the implementation of these reforms is likely, but also because the Equal Employment Opportunity Commission issued guidance in April of 2012, warning employers that reliance on criminal-history information could give rise to liability under disparate impact discrimination claims, under Title VII, given that incarceration rates for certain minority groups are significantly higher than those for the general population. Specifically, in the exercise of caution, employers should take the following steps:

• Remove references to criminal-history inquiries from job advertisements;

• Remove inquiries about criminal histories from applications;

• Refrain from making criminal-history inquiries until after a conditional offer of employment is made, or at least until after the first interview;

• When relying on criminal-history information in making hiring decisions, consider the nature and circumstances of the crime committed, how long ago it was committed, and whether it relates in any meaningful way to the position sought; and

• Prior to taking an adverse action based on criminal-history information, give the candidate the opportunity to offer explanations and evidence related to rehabilitation and inaccuracies in the records. ¢

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