Let’s say you are an employer in New York City with a position to fill. During the hiring process, you learn that an applicant has a criminal conviction. What should you do if you elect not to hire her and want to avoid breaking the law?

The answer is not simple.

In New York State, it is unlawful to deny employment or take an adverse action against an applicant because of a criminal conviction unless a direct relationship exists between the criminal offense(s) and the specific position sought, or the employment of the individual would involve an “unreasonable risk” to property or to the safety and welfare of specific individuals or the general public.

Before an adverse employment decision may be based on a conviction record, Article 23-A of the New York State Correction law provides a list of factors that employers must consider:

• New York’s stated public policy “to encourage the licensure and employment of those with previous criminal convictions.”
• The specific duties and responsibilities related to the employment sought or held.
• The bearing, if any, the criminal offense(s) for which the individual was convicted will have on her fitness or ability to perform one or more of the position’s duties or responsibilities.
• The time elapsed since the occurrence of the criminal offense(s).
• The age of the individual at the time of the occurrence of the criminal offense(s).
• The seriousness of the criminal offense(s).
• Any information produced by the individual (or on her behalf) addressing rehabilitation and good conduct. Any certificate of relief from disabilities or certificate of good conduct creates a presumption of rehabilitation with regard to the offense specified in the certificate.
• The legitimate interest of the employer in protecting property and the safety and welfare of specific individuals or the general public.

An employer must apply each of these factors on a case-by-case basis before making an adverse employment decision. If all the factors are properly weighed and an employer makes a reasonable, good faith decision that the criminal offense bears a direct relationship to the job duties or that the applicant’s employment would involve an unreasonable risk to safety and welfare, it is not illegal to deny employment.

New York law does require that if employment is denied because of a conviction record, a statement setting forth the reasons for the denial must be provided upon request of the applicant, in writing and within 30 days.

Another wrinkle for employers who use a third-party to perform a background check: the federal Fair Credit Reporting Act (FCRA). If an employer elects not to hire an employee based in whole or in part on the background check, the statute requires the applicant receive a copy of the background check report, a notice of intent to take adverse action and a notice of rights.

Employers in New York City, however, have additional legislation to contend with. The Fair Chance Act (FCA), enacted in 2015, applies to employers with at least four employees. Covered employers are prohibited from inquiring about a job applicant’s criminal history until after a conditional offer of employment has been extended.

Assuming the offer has been made and an employer has learned of a conviction that proves troubling, the FCA sets forth several requirements for an employer to rescind the offer without running afoul of the statute.

After the factors of Article 23-A have been applied, an employer must follow a “fair chance process.” This involves providing applicants with a copy of their background check report – and if a third party was used to perform the check, the FCRA notice of rights and a notice of intent to take adverse action, per the FCRA – and any other information relied upon in connection with the employment decision, such as Internet searches or written summaries of oral conversations.

In addition, employers must provide an analysis of the Article 23-A factors (the New York City Commission for Human Rights (NYCCHR) provides a Fair Chance Act Notice Form for employers to use)) and the opportunity for the applicant to address the criminal history at issue and present any mitigating information or material prior to the employment offer being revoked.

The prospective position must be held open for at least three business days from the applicant’s receipt of the necessary documentation to allow time for a response. Further, if the employer used a third-party background check company, the FCRA also mandates that applicants receive a reasonable period of time to respond (the Federal Trade Commission has suggested that five business days would be sufficient in most circumstances).

The Notice Form requires employers to evaluate each Article 23-A factor and select which exception – direct relationship or unreasonable risk – it is relying upon, with the burden on the employer (and space provided on the Notice Form) to articulate its conclusion. In addition to the Notice Form, employers that made use of a background check report must provide an applicant with an adverse action notice required by the FCRA.

If an employer rescinds a conditional offer after receiving information about the applicant’s criminal history, the FCA established a rebuttable presumption that the withdrawal was due to criminal history.

To rebut the presumption, an employer must demonstrate that the revocation was due to a permitted reason, such as the results of a medical examination (where an exam is otherwise permitted), material information the employer could not have known before the conditional offer was made and would have kept the employer from making the offer in the first place or evidence that the employer did not have knowledge of the applicant’s criminal history prior to revoking the conditional offer.

Some employers are exempt from the FCA when hiring for certain positions if federal, state or local laws require a criminal background check or prohibit employment based on certain criminal convictions. Companies in the financial services industry or employers hiring police and peace officers, for example, may not be subject to the law’s requirements. Those employers who believe they are exempt must inform an individual upon application and keep a record of their use of the exemption.