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Compliance Corder covers articles related to employment decisions due diligence.

New Guidance Regarding City of Los Angeles’ Fair Chance Initiative for Hiring Ordinance

 

 

What is this about:

 As reported in our previous alert, effective January 22, 2017, the Fair Chance Initiative for Hiring (“LAFCIH”) ordinance prohibits employers from inquiring about an applicant’s criminal history until a conditional job offer has been extended and imposes significant compliance obligations.

The Department of Public Works Bureau of Contract Administration, which bears administrative responsibilities for the LAFCIH, in addition to its rules and regulations (the “Regs”) to guide covered employers (and city contractors/subcontractors) in meeting compliance requirements published last month, has now posted an “individualized assessment and reassessment form.” It is unclear whether the Department expects employers to use this form as provided or whether modifications are permitted. Certain other items in the Regs also remain unclear, and the Department has yet to issue anticipated further guidance.
 

Notable amplifications and clarifications:
  1. “Applicant” means an individual who submits an application or other documentation for employment to an employer regardless of location.
  2. “Employee” means any individual who performs at least two hours of work on average each week within the geographic boundaries of the City for an employer. Average week is determined by the last four complete weeks before the position is advertised
  3. An individual who lives in the City and performs work for an employer from home, including telecommuting, is an employee.
  4. An individual who works from a home that is outside of the City is not an employee even if he/she works for a Los Angeles-based company, unless the individual also works at least two hours on average per week within the geographic boundaries of the City.
  5. The LAFCIH applies to employees regardless of an employer’s designation of an employee as an independent contractor, and labeling a worker as an independent contractor is not conclusive for the purpose of the LAFCIH.
 

Criminal history:

 According to the Regs,

“A conviction shall include a plea, verdict, or finding of guilt regardless of whether sentence is imposed by the court. In the State of California, an employer is prohibited from asking about any arrest information, unless it results in a conviction, and otherwise specified.”

Note: the definition above cites California Labor Code §432.7(a)(1). The first sentence is correct; however, the second sentence is not, as that statute expressly allows inquiries about pending cases,stating that “nothing

[in this section] shall prevent an employer from asking… about an arrest for which the employee or applicant is out on bail or on his or her own recognizance pending trial.”

Nevertheless, the Regs, in a section titled “Employer Assessment of Criminal History,” go on to state that “arrests cannot be considered in employment decisions.”
 

Other guidance items:

 The Regs amplify other definitions and aim to explain the various employer requirements. This includes, but is not limited to: the application and interview procedure, assessment of criminal history, the “Fair Chance” process, notice and posting, record-keeping, enforcement and exceptions.

See above the above post for links regarding this new guidance.

February 9th, 2017|Categories: Compliance Corner for Employment Decisions|Tags: , , , , |

City of Los Angeles’ “Fair Chance Initiative for Hiring” goes into effect January 22, 2017

The City of Los Angeles passed the “Fair Chance Initiative for Hiring (LAFCIH),” a new “ban-the-box” legislation that goes into effect January 22, 2017, with monetary fines for non-compliance starting July 1, 2017. The LAFCIH applies to most private sector employers that (1) are located in or doing business in the City of Los Angeles; and (2) employ 10 or more people. The law covers both applicants and incumbent employees in virtually any type of employment situation.

The ordinance prohibits covered private employers from inquiring about an applicant’s criminal history until a conditional offer of employment has been extended, and imposes significant compliance obligations, including a requirement that before making an adverse decision based on a criminal record, the employer “performs a written assessment that effectively links the specific aspects of the applicant’s criminal history with risks inherent in the duties of the employment position sought by the applicant.” At a minimum, the employer must consider factors identified by the Equal Employment Opportunity Commission in its 2012 Enforcement Guidance and any other factors that may be required by rules or guidelines promulgated by the city’s Department of Public Works, Bureau of Contract Administration [Department] which will be administering the LAFCIH.

The employer must then engage in a “fair chance process,” allowing the candidate to provide information or documentation regarding the accuracy of the criminal record or other information that the employer should consider, such as evidence of rehabilitation or other mitigating factors. The proposed position must be held open for at least five business days after the candidate has received the employer’s notification and assessment. If the candidate provides additional information or documentation, the employer is required to consider the new information and perform a written re-assessment.

Additionally, the LAFCIH provides that all covered employers include the following language in any advertisement or solicitation seeking applicants:

“The employer will consider for employment qualified applicants with criminal histories in a manner consistent with [the Los Angeles Fair Chance Initiative for Hiring].”

There is also a notice posting requirement, which must be in a conspicuous place at every workplace, job site, or other location in the City of Los Angeles under the employer’s control that is visited by applicants. Copies of the notice must be sent to each labor union or representative of workers that has a collective bargaining agreement or other agreement applicable to employees in Los Angeles.

Employers are required to maintain all records and documents related to an individual’s application for employment, including any written assessments and re-assessments for a period of three years after the receipt of the job application.

As with other “ban-the-box” legislation, the LAFCIH makes it unlawful for an employer to retaliate or otherwise take adverse action against an individual who has complained about the employer’s non-compliance or anticipated non-compliance; opposed any practice made unlawful by the ordinance; participated in any proceedings related to enforcement of the law, or otherwise sought to enforce or assert his/her rights under the LAFCIH.

The LAFCIH does not apply in the following circumstances: (1) when the employer is required by law to obtain information regarding an applicant’s criminal convictions; (2) when the applicant will be required to possess or use a firearm in the course of his/her employment; (3) when the applicant is prohibited by law from holding the position sought due to a conviction, regardless of whether the conviction has been expunged, sealed, eradicated, or dismissed; or (4) when the employer is prohibited by law from hiring an applicant who has been convicted of a crime.

With this new ordinance, Los Angeles joins the fast-growing list of localities (Austin, Baltimore, Buffalo, Chicago, Columbia (MO), District of Columbia, Montgomery County (MD), New York City, Philadelphia, Portland, Prince George’s County (MD), Rochester, San Francisco, and Seattle) and nine states (Connecticut, Hawaii, Illinois, Massachusetts, Minnesota, New Jersey, Oregon, Rhode Island, and Vermont) that have enacted similar laws for private employers.

Companies covered by the LAFCIH should immediately review and revise, if applicable, their applications, offer letters, background check forms, and notices, and ensure that their employment screening policies incorporate the ordinance’s pre-adverse and adverse action procedures and documentation, and record keeping requirements.

Since “ban-the-box” legislation is gaining momentum at a rapid pace, all nationwide employers may want to conduct an assessment of their employment screening practices to ensure their compliance with applicable laws and regulations.

January 10th, 2017|Categories: Compliance Corner for Employment Decisions|Tags: , |

New Employment Background Screening Legislation for 2017

“Ban-the-box”

“Ban-the-box” measures, which generally prohibit employers from inquiring about a candidate’s criminal history (including performing background checks) until later in the hiring process, and impose significant compliance requirements, will soon be the norm rather than an exception. The city of Los Angeles, with its new Fair Chance Initiative for Hiring ordinance, is just the latest to join the fast growing list of localities (Austin, Baltimore, Buffalo, Chicago, Columbia – MO, District of Columbia, Montgomery County – MD, New York City, Philadelphia, Portland, Prince George’s County – MD, Rochester, San Francisco, and Seattle) and nine states (Connecticut, Hawaii, Illinois, Massachusetts, Minnesota, New Jersey, Oregon, Rhode Island, and Vermont (effective July 1, 2017)) that have enacted similar laws  for private employers.

Juvenile criminal record checks   

Effective January 1, 2017, AB 1843 amends Section 432.7 of the Labor Code to prohibit California employers from inquiring about and considering information regarding “an arrest, detention, process, diversion, supervision, adjudication, or court disposition” that occurred while the candidate was subject to the process and jurisdiction of a juvenile court. Certain employment situations are exempted from these requirements, such as a prohibition by law from hiring an applicant who has been convicted of a crime.

Criminal background checks for transportation network companies

Effective January 1, 2017, under California’s AB 1289, a transportation network company (“TNC”) such as Uber, is required to perform criminal background checks on all drivers. The bill also prohibits a TNC from contracting with a driver who is registered on the DOJ’s national sex offender website or has been convicted of specified felonies, or misdemeanor assault or battery, domestic violence, or driving under the influence of drugs or alcohol within the past seven years.

Credit check restrictions

The District of Columbia is the latest jurisdiction to pass a law that prohibits private employers, with certain exceptions, from conducting credit checks on job applicants. The Fair Credit in Employment Amendment Act, which amends the Human Rights Act of 1977 to include credit information as a protected trait will take effect following approval by Mayor Bowser and other enactment actions. Similar to the laws already in effect in ten states for private employers (California – AB 22; Colorado – The Employment Opportunity Act; Connecticut  – SB 361; Hawaii – HB 31 SD1; Illinois  – HB 4658; Maryland  – HB 87;  Nevada – SB 127; Oregon – SB 1045; Vermont – Act No. 154 (S. 95); Washington – RCW 19.182 and  RCW 19.182.020) and at least two cities (New York City – Stop Credit Discrimination in Employment Act and Philadelphia – Bill No. 160072), it restricts checking an applicant’s credit history except in circumstances where a credit screen is justified by the position’s responsibilities or is required by law.

Wage history inquiries

Pay equity initiatives include California’s AB 1676, which effective January 1, 2017, prohibits employers from using a candidate’s prior salary as the sole basis to justify a pay disparity. California, however, has decided not to follow the Massachusetts provisions (described below) of banning inquiries regarding a candidate’s wage history.

Massachusetts was the first jurisdiction to pass a law that prevents employers from asking job candidates about their salary history. The commonwealth’s Pay Equity Act goes into effect July 1, 2018, and in addition to equal pay requirements, it makes it illegal, among other things, to: (1) require that an employee refrain from inquiring about, discussing or disclosing information about his or her wages, or any other employee’s wages; (2) screen job applicants based on their wages; (3) request or require a candidate to disclose prior wages or salary history; or (4) seek the salary history from a current or former employer, unless he/she provides express written consent, and an offer of employment, including proposed compensation, has been extended.

Effective May 23, 2017, the city of Philadelphia with its Fair Practices Ordinance: Protections Against Unlawful Discrimination will make it unlawful for employers to inquire about a candidate’s wage history during the hiring process, unless a federal, state, or local law specifically authorizes the disclosure or verification of wage information.

Drug testing – marijuana

According to the National Conference of State Legislatures (NCLS), 31 states/jurisdictions (Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Guam, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington) have public medical marijuana and cannabis programs, while several states (Alaska – Ballot Measure No. 2; California – Proposition 64; Colorado – Amendment 64; District of Columbia – Initiative 71; Maine – Question 1; Massachusetts  – Question 4;  Nevada – Question 2; Oregon – Measure 91; and Washington Initiative 502) have passed laws allowing for the recreational use of marijuana by adults.  Since the legal landscape for marijuana use is changing rapidly, employers should review and update their substance abuse policies, including drug-testing. Notably, marijuana remains a Schedule I drug under the federal Controlled Substances Act.

Work authorization verification

California’s SB 1001 is a revival of the 2015  AB 1065, which effective January 1, 2017, makes it unlawful for employers to:

  1. Request additional or different documents than those required under federal law to verify that an individual is not an unauthorized immigrant
  2. Refuse to accept documents provided by the applicant that reasonably appear to be genuine
  3. Refuse to honor documents or work authorization based on specific status or term that accompanies the authorization to work
  4. Attempt to reinvestigate or re-verify a candidate’s authorization to work using an unfair immigration-related practice.

Effective January 1, 2017, Tennessee’s SB 1965 requires that companies with 50 or more employees use the federal E-Verify program to confirm new employees’ work authorization.

As a reminder, starting January 22, 2017, all employers must use the new Form I-9, which is dated November 14, 2016 (the edition date is on the bottom of the form).  Employers that fail to use the new form may be subject to civil penalties.

January 2nd, 2017|Categories: Compliance Corner for Employment Decisions|Tags: , , , , , , |

The EU-US Privacy Shield Framework text is now available

U.S. Secretary of Commerce Penny Pritzker released a statement regarding the historic agreement, noting that the “EU-US Privacy Shield is a tremendous victory for privacy, individuals, and businesses on both sides of the Atlantic.”

The EU-US Privacy Shield Framework (the “Framework”) was designed by the U.S. Department of Commerce (the “DOC”) and European Commission to provide companies on both sides of the Atlantic with a mechanism to comply with EU data protection requirements when transferring personal data from the European Union to the United States in support of transatlantic commerce.

The Framework provides robust and enforceable protections for the personal data of EU individuals, mandating transparency for participating companies, strong U.S. government oversight, and increased cooperation with EU data protection authorities. Offering EU individuals access to multiple avenues to address concerns regarding participants’ compliance and a free dispute resolution, the Framework makes it easier for EU individuals to understand and exercise their rights.

The European Commission proposed that the Framework be deemed adequate to enable data transfers under EU law, which is now in the approval process. Once an adequacy determination is made, the DOC will begin accepting certifications under the Framework. Similar to the certification process of the now invalid Safe Harbor, if a U.S. based-company wishes to join the Framework, it will be required to self-certify to the DOC and publicly commit to comply with the Framework’s requirements. While joining the Framework will be voluntary, once an eligible company certifies compliance, the commitment will become enforceable under U.S. law.

Read the fact-sheet about the EU-US Privacy Shield Framework here.

Read the full text of the EU-US Privacy Shield Framework here.

February 29th, 2016|Categories: Compliance Corner for Employment Decisions|Tags: , , , |

Judicial Redress Act of 2015 signed into law

 

On February 24, 2016, President Obama signed the Judicial Redress Act of 2015 (“the Act”) into law, a major step toward formalizing the recently announced privacy framework, the EU-U.S. Privacy Shield, which will replace the Safe Harbor program that was declared invalid by the European Court of Justice in October 2015. The Act’s intent, as explained by House Judiciary Committee Chairman Bob Goodlatte (R-VA), is to reestablish the United States’ credibility with the European Union following the highly-publicized leaks of classified information in the recent years.

The Act extends to the citizens of EU countries that permit commercial transfers of personal data

[to the United States] similar rights to those enjoyed by US citizens under the Privacy Act of 1974, which established a code of fair information practices that govern the federal government’s collection, maintenance, use, and dissemination of information about individuals. The citizens of these EU countries will now be allowed to sue the United States for unlawful disclosure of their personal information obtained in connection with international law enforcement efforts. Under current law, only US citizens and legal residents can bring such claims against the federal government.

Read the text of the Act here.

February 28th, 2016|Categories: Compliance Corner for Employment Decisions|Tags: , |

The EU-US Privacy Shield for transatlantic data transfers makes its debut

Announced on February 2, 2016 by the European Commission, the new political agreement called the Privacy Shield, reflects the requirements set out by the European Court of Justice in its ruling on October 6, 2015, which declared the old Safe Harbor privacy framework invalid.

The new arrangement calls for strong data privacy and security measures and robust enforcement of U.S. companies handling Europeans’ personal data, clear safeguards and transparency for U.S. government access, and effective protection of EU citizens’ rights with several redress possibilities.

The College of Commissioners is now preparing an adequacy decision regarding the Privacy Shield–the Article 29 Working Party (the “Working Party”), a data protection authority, is requesting that all documents be provided  by the end of February 2016 so that it can complete its assessment of the new framework at a special plenary meeting shortly thereafter. In a statement issued February 3, 2016, the Working Party provided some assurances that during this period of transition, transfer mechanisms, such as standard contractual clauses (which are data transfer agreements approved by the Commission) and binding corporate rules (generally described as internal data processing rules binding on all members of a global corporate group) to permit intragroup transfers of personal data) can still be used as transfer tools to the U.S.

Organizations that certified compliance under the Safe Harbor regime must continue to meet their obligations in connection with previously transferred personal data to avoid enforcement actions by the Commerce Department or the Federal Trade Commission, which consider the Safe Harbor as still binding. In the interim, implementing the above-mentioned clauses should also be considered to the extent they supplement the Safe Harbor platform. It appears that the Privacy Shield, at least initially, will rely significantly on the Safe Harbor framework, and it is likely that the Department of Commerce will offer a means for Safe Harbor certified organizations to transition to the Privacy Shield.

February 24th, 2016|Categories: Compliance Corner for Employment Decisions|Tags: , , , |

CFPB publishes annual guide about consumer reporting agencies

Every year, the Consumer Financial Protection Bureau (the “CFPB”) updates and publishes a guide to consumer reporting companies, The guide includes information in connection with requesting a consumer report from the three largest nationwide consumer reporting companies and dozens of specialty reporting companies, tips regarding specialty reports, updated information about authentication of identity when requesting a consumer report, information on companies that provide free credit scores, and rights with respect to consumer reports.

The CFPB notes that in prior years, its guide referred to consumer reporting businesses as “agencies” or “bureaus,” and that these terms can be confusing because they may imply these businesses are government entities. They are not—these companies are private-sector, for-profit entities, and in this year’s guide, the CFPB refers to them as “companies” for better clarity.

February 23rd, 2016|Categories: Compliance Corner for Employment Decisions|Tags: , , |

What’s up with California’s new E-Verify law?

The new law, AB 622, which went into effect January 1, 2016, adds Labor Code section 2814 to strengthen current California prohibitions on employers’ use of E-Verify and other electronic employment eligibility verification systems.  Labor Code section 2811 (enacted in 2011) already prohibits private employers from using E-Verify or such other verification systems, unless required by federal law or as a condition of receiving federal funds.

The amended Labor Code section 2814 expands the definition of an unlawful employment practice to prohibit an employer or any other person or entity from using the E-Verify system at a time or in a manner not required by a specified federal law or not authorized by a federal agency memorandum of understanding to check the employment authorization status of an existing employee, or an applicant who has not received an offer of employment, except as required by federal law or as a condition of receiving federal funds. The new law also requires an employer that uses the E-Verify system to provide to the affected employee any notification issued by the Social Security Administration or the United States Department of Homeland Security containing information specific to his/her E-Verify case or any tentative non-confirmation notice. Employers will now face a civil penalty of $10,000 for each violation of these provisions.

  • Read the text of AB 622
  • Read guidance published by the U.S. Department of Homeland Security on conducting internal audits regarding Form I-9 compliance
February 23rd, 2016|Categories: Compliance Corner for Employment Decisions|Tags: , , , |

Uber settles class-action for $28.5 million for misleading claims about drivers’ background checks

On February 12, 2016, Uber agreed to settle a consolidated class-action filed in the U.S. District Court for the Northern District of California (Philliben v. Uber Technologies, Inc. and Mena v. Uber Technologies, Inc.) by paying $28.5 million to approximately 25 million riders and promising to avoid using certain language in safety-related advertising, as well as the term “safe ride fee.”

In their complaint filed in 2014, the plaintiffs alleged that Uber’s claim of conducting “industry-leading background checks” for which they paid a “safe ride fee” of $1 to $2 on top of each fare, was false and misleading. According to the complaint, Uber does not and has never had an “industry-leading background check process.” To the contrary, the complaint stated that background screening by Uber does not involve fingerprint identification and, therefore, cannot ensure that the information obtained from a background check actually pertains to the driver that submitted the information. By contrast, most taxi regulators in United States require drivers to undergo criminal background screening, using fingerprint identification, and typically employing a technology called “Live Scan.”  Going forward, Uber said it will rename the “safe ride fee” as a “booking fee” which will be used to cover safety and additional future operational costs.

If the judge approves the settlement, members of the class who rode in an Uber vehicle in the United States between January 1, 2013 and January 31, 2016 will be eligible to receive a portion of the settlement.  If that pot is divided evenly among Uber’s 25 million passengers, after attorneys’ fees, each will get around $1.

Read the consolidated class-action complaint here.

February 23rd, 2016|Categories: Compliance Corner for Employment Decisions|Tags: , , |

Province of Ontario passes the Police Record Checks Reform Act

On December 1, 2015, Ontario passed the Police Record Checks Reform Act, 2015 (the “Act”) which has significant implications regarding criminal record checks. The Act establishes comprehensive standards governing the type of information that can be disclosed by police in response to record check inquiries, and is intended to remove unnecessary barriers to employment, licensing, holding office, applying to educational programs and participating in volunteer activities. Its main objective is to prevent the inappropriate disclosure of non-conviction and non-criminal records, such as information obtained from street checks or “carding,” as well as mental health information.  

Possibly the most significant requirement under the Act is that the individual must review the requested information and then consent to its disclosure. In the event that potentially inappropriate non-conviction information is included in a record, the Act provides that the individual may request a reconsideration of the disclosure. As a result, employers who conduct employment criminal record checks will now only be able to obtain the results if the applicant/employee has consented to the disclosure. 

December 22nd, 2015|Categories: Compliance Corner for Employment Decisions|Tags: , , |
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