Compliance Roundup: You’ve Asked – We’ve Answered! December 2022
You've asked... We've answered. HireRight compiled up the top questions we receive from HR professionals in our quarterly compliance webinar, and provided responses on topics like drug screening, pay equity, criminal reform and more.
We know how difficult it can be to navigate the ever-changing legislation around HR compliance. HireRight hosts a webinar covering emerging legislation and litigation that impact employers’ screening programs each quarter. During the webinar, we field questions directly from HR professionals. We have compiled the top questions asked during the webinar and our responses. Some questions have been edited for brevity or clarity.
Ban the Box, Fair Chance, & Clean Slate Laws
Question: How should an employer treat an active warrant when assessing a candidate’s criminal history in a ban-the-box jurisdiction that requires an individualized assessment?
Answer: Generally, employers should assess the applicable jurisdiction’s laws, the nature of the warrant, and its relationship to the position sought. For example, courts in New York issue typically issue arrest warrants and bench warrants, among other types of warrants. An arrest warrant is issued if there is probable cause that a crime was committed; it is not a conviction. Bench warrants are issued if someone violates the rules of the court. Employers may engage in a dialogue with the worker and conduct an individualized assessment against the jurisdiction’s assessment criteria.
Question: What does the New York City Fair Chance Act require to request a criminal background check?
Answer: Amendments to New York City’s Fair Chance Act, related to conducting criminal background checks by employers on candidates and employees working in New York City (NYC), became effective on July 29, 2021. On July 15, 2021, the New York City Commission on Human Rights (NYCCHR) issued updated Frequently Asked Questions about New York City’s Employment Protections Based on Criminal History (the “FAQ”) as well as detailed Legal Enforcement Guidance on the Fair Chance Act and Employment Discrimination on the Basis of Criminal History (the “Guidance”). The FAQ and Guidance elaborate upon the NYCCHR’s expectations of employers in complying with the amended NYC Fair Chance Act. This communication reminds employers of the new requirements, as most recently interpreted by the NYCCHR.
Summary of Amendments
As amended, NYC’s Fair Chance Act:
Prohibits employers from making statements related to criminal history in job postings and recruitment materials.
Prohibits employers from asking about or considering information about a candidate’s conviction history or pending cases until after the employer has assessed all other job qualifications and made a conditional offer of employment to the candidate.
Requires that employers comply with specific requirements of the Fair Chance Process if they wish to withdraw the conditional offer based on the candidate’s criminal history and can only withdraw the offer in limited circumstances.
As a result of these amendments and interpretations, employers must effectively bifurcate their screening process into two steps.
Step 1: The first step would include screening consisting of all non-criminal components and is intended to validate the candidate’s qualifications for the job. If the candidate is deemed qualified for the job by the employer, then the employer may extend a conditional offer of employment and proceed to screening step 2.
Step 2: The second step would include a screening that consists exclusively of checks returning criminal history information.
Question: How do clean slate laws impact the Violent Crime Control and Law Enforcement Act (VCCLEA)?
Answer: Clean slate laws provide opportunities for individuals that meet specific conditions who were convicted of certain crimes to have those criminal records expunged or sealed. Employers subject to the VCCLEA are barred from engaging individuals convicted of felony crimes involving a “breach of trust or dishonesty.” If a criminal record is sealed or expunged, it is removed from the criminal index made available to background check vendors and, therefore, cannot be reported as that record no longer exists.
Screening Compliance
Question: What are best practices when reviewing the compliance of background check disclosures and authorizations?
Answer: Employers are reminded that they are solely responsible for the content and compliance of the disclosure and authorization forms they choose to implement. Employers should periodically engage legal counsel to review their documents and background screening practices.
As stated in Section 604(b) of the Fair Credit Reporting Act (FCRA), when ordering a consumer report for employment purposes, end users (typically employers) must provide the subject of the report (typically a job applicant or employee) a clear, conspicuous, standalone “disclosure” and obtain their written “authorization.”
The fundamental message of the employment purpose disclosure is “We will get a consumer report about you for employment purposes.” The FCRA says the disclosure must:
be clear and conspicuous;
be in writing;
be in a standalone document that consists solely of the disclosure; and
state that a consumer report may be obtained for employment purposes.
Practically speaking, this means that an employment purpose disclosure should:
Be easily identified and understood by the reader, and clearly state that a consumer report may be obtained for employment purposes.
Be in writing and not given orally.
Be its own document and not be included within an employment application or other document.
There is one exception to this - an employment purpose consumer report authorization may be combined with the disclosure.
Be free of any extraneous information.
For example, the disclosure should not contain any waivers or releases of liability, state notices, or information regarding additional rights the consumer may have.
The disclosure may also briefly define the term “consumer report,” but it should not say much more than that.
The subject of the report must also give the organization their written authorization before the organization can obtain a consumer report about them. The authorization is how the consumer says, “I give you, ABC Company, permission to obtain a consumer report about me for employment purposes.” The authorization should clearly explain who is using the report and for what purpose and contain a space for a signature and date.
When an employer orders a report about an applicant or employee in a regulated trucking position with whom the employer only communicates via phone, mail, computer, or other similar means, unique employment-purposes requirements apply. Section 604(b) of the FCRA defines a regulated trucking position as “a position over which the Secretary of Transportation has the power to establish qualifications and maximum hours of service pursuant to the provisions of section 31502 of Title 49, or a position subject to safety regulation by a state transportation agency”.
When this exception applies, the employer must give “notice” (instead of disclosure) and get “consent” (instead of an authorization). The notice and consent can be written, electronic, or oral, and have slightly different content requirements than the standard employment purpose requirements.
Pay Equity, Salary History Bans, & Wage Transparency Laws
Question: Where is wage transparency required?
Answer:
Jurisdiction | Effective Date | Scope | Disclose Benefits | Disclose Wage to Candidate | Disclose Wage to Employee |
|---|---|---|---|---|---|
Jan. 1, 2018 | Any employer in California | N/A | Upon request after interview | N/A | |
Mar. 13, 2020 | Business located in Cincinnati with fifteen or more employees in Cincinnati. | Yes | Upon request after conditional job offer | N/A | |
Jan. 1, 2021 | Any employer in Colorado | Yes | In job post | In job post | |
Oct. 1, 2021 | Any employer in Connecticut | N/A | Upon request or before compensation offer | Upon request, hire, or job change | |
Ithaca, NY | September 1, 2022 | Four or more employees in Ithaca | N/A | In job post | In job post |
Apr. 13, 2022 | Four or more employees; principal place of business in Jersey City, NJ | Yes | In job post | In job post | |
Oct. 1, 2020 | Any employer in Maryland | N/A | Upon request after application | N/A | |
Oct. 1, 2020 | Any employer in Nevada | N/A | After interview | After application or interview for promotion or transfer | |
TBD | Four or more employees | N/A | In job post | In job post | |
Nov. 1, 2022 | Four or more employees | No | In job post | In job post | |
Jan. 1, 2023 | Any employer in Rhode Island | N/A | Upon request after application & before compensation discussion | Upon request and at time of hire and promotion or transfer | |
Jan. 25, 2020 | Fifteen or more employees in Toledo | N/A | Upon request after conditional offer | N/A | |
Jan. 1, 2023 | Fifteen or more employees in Washington | Yes | Upon request after conditional offer | Upon request after offer of promotion or transfer | |
Nov. 6, 2022 | Four or more employees | N/A | In job post | In job post |
Question: Do pay transparency laws require that both minimum and maximum salary be disclosed?
Answer: Yes. Most wage transparency laws require that the minimum and maximum annual salary or hourly compensation range be disclosed within the job post or advertisement. The reason that a compensation range must be disclosed is to help avoid creating pay discrepancies by paying candidates outside of an established pay band.
Question: Are pay transparency laws focused on starting salary or expected pay throughout the job?
Answer: Pay transparency laws aim to mitigate discrepancies that may exist at the time of hire, which can persist over the course of employment. The intent is to prohibit employers from “lowballing” a candidate and instead pay them based on their merits and qualifications commensurate with the role.
Question: How do pay transparency laws impact an employer that is fully remote and does not limit jobs to a specific location?
Answer: Employers may choose to adopt pay transparency across the board. Alternatively, employers will need to assess the scope of applicability of a pay transparency laws to determine if a salary range must be posted. For example, a salary range must be posted if an employer has any employees in Colorado. Please refer to the above chart to review the scope of pay transparency laws.
Question: What is the scope of benefits that must be included within a compensation disclosure?
Answer: Of the jurisdictions that require that benefits be disclosed, only Colorado defines the scope of benefits that must be identified in the job post or advertisement. Colorado requires “a general description of all employment benefits the employer is offering for the position, including health care benefits, retirement benefits, any benefits permitting paid days off (including sick leave, parental leave, and paid time off or vacation benefits), and any other benefits that must be reported for federal tax purposes, but not benefits in the form of minor perks.”
Question: Can an employer ask about commission history in jurisdictions that prohibit employers from inquiring into a candidate’s former compensation?
Answer: No. Employers are generally prohibited from asking about any form of compensation, including current or prior wages, benefits, or commission history. However, employers may ask a candidate about their salary expectations.
Question: How do pay transparency laws impact California employers?
Answer: Effective January 1, 2023, employers in California with 15 or more employees must post salary or hourly wage ranges in job advertisements or internal job postings.
Question: How do pay reporting laws impact California employers?
Answer: Effective January 1, 2023, employers in California with 100 or more employees (regardless of location), and who are required under federal law to file an annual federal Employer Information Report (EEO-1) must submit an annual pay data report to the California Civil Rights Department (CCRD). Employers with 100 or more workers engaged through labor contractors within the prior calendar year are required to file a separate report for those workers who have been supplied by labor contractors. The report must identify the labor contractors. The median and mean hourly rate for each combination of race, ethnicity, and sex in designated job categories as defined in the law must be reported to the CCRD.
Question: What are the specifics of New York City’s wage transparency law?
Answer: In January 2022, the New York City Council passed Int. 1208-2018, which amends the New York City Human Rights Law and requires employers with four or more workers in New York City to post the minimum and maximum pay range for any job within the city. Guidance published by the New York City Commission on Human Rights clarified the scope of the law and its applicability to remote workers. More information can be found in our posts on salary requirements and pay transparency.
Question: What are the specifics of Washington’s wage transparency law?
Answer: Washington’s wage transparency requirements apply to employers with 15 or more employees. Employers must disclose the wage scale or salary range and a general description of all benefits and other compensation to be offered. Employees offered an internal transfer or promotion must be provided the wage scale or salary range for the new position upon request. Washington’s wage transparency law becomes effective on January 1, 2023.
Cannabis Reform & Drug Testing
Question: Does Philadelphia’s ban on pre-employment marijuana testing apply to candidates that live or work in the city?
Answer: Philadelphia’s marijuana anti-discrimination law applies to candidates applying for work within the city. While the law does not specifically address remote workers working from their homes in Philadelphia, since the law’s intent is to prevent discrimination against marijuana users in the city, remote workers in Philadelphia are likely afforded protection under the law. Unless subject to an exception, employers are prohibited from pre-employment testing for marijuana. Read more on our blog on marijuana testing in Philadelphia.
Question: Is medical marijuana legal in Texas?
Answer: Texas does not have a comprehensive medical marijuana law. However, Chapter 169 of the Texas Occupations Code permits qualified physicians to recommend low-THC cannabis (e.g., maximum THC concentration of 1%) to patients with certain conditions under Texas’s Compassionate-Use Program. Patients using low-THC marijuana are not offered express employment protections under Texas’s law.
Question: If we employ DOT-regulated drivers, can we conduct drug testing that includes marijuana in all jurisdictions?
Answer: Yes. All jurisdictions that have legalized medical or recreational marijuana permit testing for marijuana for DOT-regulated positions. Employers may also adversely impact the employment of a DOT-regulated driver who tests positive as required by applicable federal regulations.
Question: If we perform services under a federal contract or receive federal funding, can we conduct drug testing that includes marijuana in all jurisdictions?
Answer: Yes. All jurisdictions that have legalized medical or recreational marijuana permit testing for marijuana for roles supplying services pursuant to a federal contract or funding and disqualification of workers subject to the federal contract or funding who test positive for marijuana.
Question: Does Virginia permit reasonable suspicion testing or post-accident testing?
Answer: Yes. Virginia places no restrictions on employers for reasonable suspicion or post-accident drug screening.
Question: Does Michigan provide employment protections for marijuana users?
Answer: Michigan does not maintain a marijuana anti-discrimination law. Therefore, employers are permitted to test for marijuana and may adversely impact the employment of a marijuana user.
Question: Is recreational marijuana legal in Minnesota?
Answer: Minnesota has not passed a comprehensive recreational marijuana law. However, adults 21 and older may possess and consume hemp-based edibles and beverages that contain up to five milligrams of total combined THC, such as delta-8 and delta-9, per serving, with individual packages limited to 50mg of THC.No protections are afforded to candidates or employees who consume applicable THC products.
Question: Can an employer adversely impact the employment of a candidate who tests positive for marijuana in Rhode Island?
Answer: No. Generally, employers cannot “fire or take disciplinary action against an employee solely for an employee’s private, lawful use of cannabis outside the workplace and as long as the employee has not and is not working under the influence of cannabis…” Exceptions exist for safety-sensitive roles, jobs subject to collective bargaining agreements and individuals working as federal contractors. The Rhode Island Cannabis Act does not define “under the influence” but states that the mere presence of “cannabis metabolites” in a person’s system does not indicate that a person is “under the influence,” which suggests that other observable symptoms of impairment are required to establish that a person is under the influence of cannabis.
Question: Can an employer adversely impact the employment of a New Jersey worker subject to random drug testing whose test is positive for marijuana?
Answer: No. A test that identifies “the presence of cannabinoid metabolites…is insufficient to support an adverse employment action.” However, a positive test combined with articulable symptoms of impairment during work hours may support an adverse employment action. An exception exists for employees subject to federal contracts. More information can be found in recent guidance issued by the New Jersey Cannabis Regulatory Commission.
Question: If a candidate for a safety-sensitive position in Nevada tests positive for cannabis, does the employer still need to hire them?
Answer: A recent Nevada Supreme Court decision held that recreational marijuana use does not constitute “lawful off-duty conduct,” which means that employers are not required to accommodate a worker’s use of recreational marijuana. However, the Nevada Supreme Court also recently found that employers must engage in an interactive process with a worker who presents a valid medical marijuana card and attempt to make reasonable accommodations for the worker if they do not place an undue burden on the employer.
Based on the above decisions, as it applies to medical marijuana users, Nevada’s law permits employers to reject candidates for the following jobs if they test positive for marijuana:
a firefighter, as defined in NRS 450B.071;
an emergency medical technician, as defined in NRS 450B.065;
positions that require an employee to operate a motor vehicle and for which federal or state law requires the employee to submit to screening tests; or
that, in the determination of the employer, could adversely affect the safety of others.
Question: Is the smell of marijuana alone enough to discipline a worker?
Answer: In jurisdictions that protect lawful marijuana users, the smell of marijuana alone will not be sufficient to warrant an adverse employment action. For example, guidance from the New York Department of Labor states, “the smell of cannabis, on its own, is not evidence of articulable symptoms of impairment.” Learn more in our on-demand webinar on drug testing and reasonable suspicion
Privacy, Tech & Employment Laws
Question: Could an Applicant Tracking System (ATS) that grades applications or filters resume based on pre-screening questions be considered an “automated employment decision tool” that would be subject to a law that restricts an employer’s use of artificial intelligence in the employment lifecycle?
Answer: Yes. For example, New York City defines an “automated employment decision tool” as “ “any computational process, derived from machine learning, statistical modeling, data analytics, or artificial intelligence, that issues simplified output, including a score, classification, or recommendation” that is used to “substantially assist or replace discretionary decision making for making employment decisions that impact natural persons.” The acts of automatically grading or filtering applications or resumes would constitute an automated employment decision tool under New York City’s law.
Question: How should can an employer assess and mitigate possible discrimination from employment decision tools that use artificial intelligence?
Answer: Yes. The EEOC has published guidance that provides examples of possible discriminatory behaviors and tips to mitigate risks imparted when using artificial intelligence to assess job applicants and employees. More information can also be found on our artificial intelligence and in the employment lifecycle webinar.
I-9 & E-Verify
Question: Can an employer accept an expired Permanent Resident Card?
Answer: Yes. USCIS has extended the validity of Permanent Resident Cards (PRC) from 12 months to 24 months for lawful permanent residents who have filed Form I-90, Application to Replace Permanent Resident Card, to renew their PRC. When completing Form I-9, new employees may present an expiring or expired PRC with this receipt notice as a List A document that extends the PRC for 24 months from the card Expires date on the front of the card. Employers may not reverify current employees who presented this document in combination with the original 12-month extension when they originally completed Form I-9.
Question: If an employer hires remote employees regardless of COVID-19, do employment authorization documents need to be physically inspected?
Answer: Employers who are fully remote despite the pandemic should follow guidance issued by the US Citizenship and Immigration Services for completing Form I-9 for remote workers. Employers may also consider leveraging Form I-9 and E-Verify Services.
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Release Date: December 28, 2022
Alonzo Martinez
Alonzo Martinez is Associate General Counsel at HireRight, where he supports the company’s compliance, legal research, and thought leadership initiatives in the background screening industry. As a senior contributor at Forbes, Alonzo writes on employment legislation, criminal history reform, pay equity, AI discrimination laws, and the impact of legalized cannabis on employers. Recognized as an industry influencer, he shares insights through his weekly video updates, media appearances, podcasts, and HireRight's compliance webinar series. Alonzo's commitment to advancing industry knowledge ensures HireRight remains at the forefront of creating actionable compliance content.