2023 Download: Reviewing Key Legislation Impacting Employers
2023 was a pivotal year for legislative reforms impacting hiring practices and workplace policies nationwide. For employers, staying informed and adapting to these shifting legal frameworks has become imperative.
2023 was a pivotal year for legislative reforms impacting hiring practices and workplace policies nationwide. Employers navigating the intricate landscape of background checks, drug testing, and equitable employment procedures have witnessed a transformational year marked by the emergence of laws concerning clean slate, fair chance hiring, ban-the-box initiatives, pay equity and transparency, and the ever-evolving landscape of marijuana legalization. For employers, staying informed and adapting to these shifting legal frameworks has become imperative.
Clean Slate Laws
In 2023, the landscape of cleanslate legislation saw significant developments across various states and jurisdictions. These laws aim to provide opportunities for reintegration into society by expunging or sealing certain low-level or non-violent offenses from a person’s record after a prescribed period, assuming the individual has maintained a clean record.
Noteworthy 2023 Clean Slate Legislation
Leading the nation in criminal history reform, California extended automatic clean slate relief to felony-level offenses after a remarkably short period of four years. This law significantly broadens opportunities for most defendants with non-violent felony convictions to seek expungement, even those with serious felony offenses who can petition the court.
Despite its intention to provide broad automatic expungement for most non-violent felonies and misdemeanors, Connecticut faced challenges in accurately identifying and expunging eligible offenses. As of now, only cannabis-related offenses are automatically expunged, leaving other criminal records accessible in court systems and reported to employers.
Starting January 1, 2024, Idaho permits petition-based expungement of non-violent misdemeanors and felony possession after five years following sentence completion, focusing on relatively minor offenses for sealing.
Recently signed legislation in New York expands clean slate laws by automatically sealing eligible cases, eliminating the need for expungement applications. Misdemeanor offenses are sealed three years after sentence completion, while eligible felony convictions are sealed eight years after release, except for specific exclusions like Class A felonies.
Set to amend existing laws by July 1, 2025, Virginia will automatically seal marijuana offenses while allowing petition-based sealing for underage possession of alcohol and disclosure of records related to mistaken identity or unauthorized use of identifying information.
Arizona, Utah, and Washington, DC: These states operate petition-based processes for expungement, allowing eligible individuals to seek relief for various non-violent misdemeanors and felonies after specific waiting periods.
California Fair Chance Act Revisions
In December 2022, the California Civil Rights Department proposed substantial changes to the Fair Employment and Housing Act (FEHA) regulations, leading to the California Fair Chance Regulation set to become effective on October 1, 2023. This regulation impacts employers conducting criminal background checks, emphasizing a need for a thorough review of hiring practices to comply with the new mandates.
The California Fair Chance Act provides that employers are not legally obligated to check the criminal histories of job applicants or current employees, but if they choose to do so, they must adhere to the legal limitations specified. Employers mandated by law to conduct criminal background checks can do so before offering employment, while others can perform these checks after extending a conditional offer. However, all employers must conduct an individualized assessment before making adverse employment decisions based on an applicant’s criminal conviction history. Revisions in 2023 to the Fair Chance Act broaden the scope of impacted workers and employers and require an enhanced individualized assessment process.
The definition of “applicant” has been expanded to include existing employees seeking different positions within their current organization. Additionally, the term “employer” now covers not just direct employers but also entities acting as agents, staffing agencies, or those obtaining workers from availability lists. The regulation prohibits exclusionary statements in job ads or applications and mandates evaluation based on qualifications rather than biased judgments regarding criminal history.
Employers must conduct an enhanced individualized assessment considering the offense’s nature, the time elapsed since the offense, and the job’s nature. The regulation offers guidance by introducing non-exhaustive considerations for each factor. While employers cannot demand specific evidence of rehabilitation, applicants can voluntarily provide evidence like their conduct during incarceration, employment history post-conviction, or participation in rehabilitative efforts. Applicants may disclose factors contributing to the offense, including trauma or disabilities, and employers must fairly evaluate this information to provide applicants a fair chance to demonstrate their qualifications.
Chicago Ban-the-Box Amended
In April 2023, Chicago introduced an amended ban-the-box ordinance, imposing new restrictions on how employers use criminal records in job screening. The ordinance mandates that Chicago-based employers, regardless of size, provide pre-adverse and adverse action notices when utilizing criminal history for employment decisions. Employers must now conduct individualized assessments considering factors such as the relationship between the offense and the job, the severity of the offense, rehabilitation efforts, and more. This more stringent approach applies even if employers already comply with Illinois’ Job Opportunities for Qualified Applicants Act. Notably, the amendment entails specific content requirements for adverse action notices and includes harsher penalties for violations, emphasizing the need for Chicago employers of all sizes to stay updated on these changes.
Pay Equity and Transparency
As employers conduct employment verifications as part of their pre-hire process, a fundamental shift in the landscape of hiring practices emerged in 2023 with the advent of stringent pay transparency laws across several jurisdictions. Pay equity measures champion the cause of equal pay for equal work, often prohibiting inquiries about a candidate’s former compensation until later in the hiring process. However, the crux of pay transparency laws demands open disclosure from employers regarding their compensation structure for various organizational roles. A pay analysis must be conducted to establish minimum and maximum salary ranges for each position and subsequently sharing this information in job postings or advertisements.
Notable 2023 Pay Equity and Transparency Legislation
California stands as one of the frontrunners in wage transparency laws. The state’s mandate requires employers to divulge minimum and maximum pay scales for all job postings within the state, affecting employers with fifteen or more employees. This comprehensive move aims to empower candidates and employees, promoting informed decision-making and closing wage gaps.
Colorado, under its Equal Pay for Equal Work Act effective January 1, 2024, mandates the announcement or posting of all job opportunities with specific details about pay range, benefits, and application deadlines. It delineates nuanced definitions like career development and progression while also focusing on post-selection notices to employees.
Hawaii passed a law effective January 1, 2024, compelling employers with 50 or more employees to disclose hourly rates or salary ranges in job listings, exempting certain positions and internal transfers. This law accentuates the importance of equal pay for similar work and prohibits discrimination based on protected categories.
Effective January 1, 2025, Illinois lays down stringent guidelines for employers with fifteen or more employees, requiring pay scale disclosure in job postings and announcing promotional opportunities within fourteen days of external job advertisements.
New Jersey’s Temporary Workers Bill of Rights is a pivotal step in ensuring fairness for temporary workers. It requires such workers to be paid similarly to employees performing substantially similar work at the client’s site, including the average cost of benefits, significantly impacting employers engaging temporary workers.
Rhode Island, Washington, New York, and Albany County in New York have each implemented their unique wage transparency laws, all revolving around the fundamental principle of disclosing salary ranges for job applicants and current employees. These laws emphasize prohibiting the use of a job applicant’s wage history information, promoting fairness, and discouraging pay discrimination.
As the legal landscape regarding marijuana continues to evolve, employers across various industries are facing new challenges in adapting their policies and practices. In 2023, significant legislation regarding the legalization of marijuana for either medical or recreational use has brought about considerable shifts, prompting employers to reassess their workplace policies and, in some cases, approaches to drug testing.
Notable 2023 Cannabis Legislation
California’s AB 2188 introduces critical protections for individuals engaging in off-duty cannabis use. Employers are barred from discriminating against employees based on non-psychoactive cannabis metabolites found in drug tests unless impairment at work is demonstrated. Exceptions exist for safety-sensitive positions and specific federal regulations. Notably, the law does not permit cannabis use or impairment on the job, emphasizing an employer’s obligation to maintain a drug-free workplace.
Similarly, Washington’s SB 5132 offers protections against adverse actions based solely on off-duty cannabis use that doesn’t affect job performance. Employers are cautioned against testing for non-psychoactive cannabis metabolites in pre-employment screenings, with exceptions for specific roles and safety-sensitive positions. The law emphasizes an employer’s right to maintain a drug-free workplace and adhere to federal regulations.
In light of restrictions on testing for non-psychoactive cannabis metabolites in California and Washington, employers may consider oral fluid testing as an alternative. This method detects recent drug use, including psychoactive cannabis metabolites, providing insights into impairment rather than historical usage. Oral fluid testing offers a detection window of a few hours to days post-consumption, aligning with identifying recent cannabis use and impairment more effectively.
Delaware’s recreational marijuana law took effect in the second quarter of 2023, offering no specific protections for recreational users. However, the state permits medical marijuana use and requires employers to reasonably accommodate such use. When faced with positive drug test results for marijuana in Delaware, employers need to discern if the individual is a recreational or medical marijuana user to take appropriate action.
Kentucky passed a medical marijuana law effective from January 1, 2025. Contrary to some other states, this law does not mandate employers to accommodate medical marijuana use. Employers retain the right to conduct drug tests for marijuana and take adverse employment actions against individuals testing positive, including prohibiting registered medical marijuana users from certain safety-sensitive roles. The law also allows employers to contractually prevent vendors from assigning workers who use medical marijuana.
This summer, Maryland joined the states legalizing recreational marijuana. Despite this change, both Maryland’s existing medical marijuana law and the newly enacted recreational law offer no explicit employment protections for cannabis users. Consequently, there is minimal impact on employers in terms of accommodating or altering drug testing policies for marijuana.
Washington, DC, implemented the Cannabis Employment Protections Act, effective July 13, 2023. This act prohibits adverse personnel actions against individuals for off-premises cannabis use during non-work hours. However, the law’s practical application remains limited due to funding constraints preventing enforcement by the DC Office of Human Rights. While employers are barred from penalizing individuals solely based on cannabis use or presence in a drug test absent symptoms of impairment, there are numerous exceptions, including safety-sensitive positions and workplace possession or impairment.
As we bid farewell to 2023, employers stand at the crossroads of an evolving employment landscape defined by sweeping legislative reforms. With the continued momentum behind clean slate laws, fair chance hiring initiatives, ban-the-box reforms, pay equity, transparency mandates, and the ongoing evolution of marijuana legalization laws, employers find themselves refining their processes for conducting background checks and drug tests. Meeting the challenges posed by these reforms requires not just compliance but a concerted effort toward cultivating workplaces that prioritize fairness, equity, and inclusivity in the employment lifecycle.
Release Date: January 4, 2024
Alonzo Martinez is Associate General Counsel at HireRight. Mr. Martinez is responsible for monitoring and advising on key legislative and regulatory developments globally affecting HireRight’s service delivery. His work is focused on ensuring HireRight’s performance as a consumer reporting agency and data processor complies with relevant legal, regulatory, and data furnisher requirements. Mr. Martinez obtained his Juris Doctorate from the University of Colorado, and is licensed by the Supreme Court of the State of Colorado. He is a member of the Colorado Bar Association Employment Law Division, the Association of Corporate Counsel, and the Professional Background Screening Association.