Colorado Has Launched an Employment Law Revolution; Your State May Be Next

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Colorado Has Launched an Employment Law Revolution; Your State May Be Next

Laws aimed at leveling the playing field for workers — because of their gender or past criminal history — are popping up across the country as leaders attempt to erase longtime barriers that have held people back in the workplace.

But no other state has seen more change — or more rapid change — than Colorado. There, in just the last six months, lawmakers have approved a series of rules and regulations to protect job candidates and employees. At the state level, it’s one of the largest shifts in employment law in U.S. history.

Politics in Colorado are shifting from a mixed-party state to now being led by Democrats. That’s one reason for the new laws, which seek to close the wage gap between men and women and make it easier for those with criminal records to get a job.

Since January, Colorado Democrats have controlled the state’s House of Representatives, Senate and Office of the Governor. And they’ve acted swiftly, passing laws that are reshaping the way organizations hire and pay employees in the state.

But the laws also reflect a mind shift across the country and around the world, as lawmakers address long-simmering workplace issues. It’s likely that other states and communities will take notice of Colorado’s changes and pave the way toward their own reboot.

Here’s what’s happening in Colorado.

Fingerprint-Based Criminal Record Checks

In April, Colorado was the very first state to pass a law that requires employers and other parties to take an extra step when fingerprint-based criminal record checks turn up arrests.

HB19-1166, which HireRight advocated in support of, mandates a look at judicial criminal records when fingerprint-based checks uncover an arrest to confirm whether an individual was actually convicted of a crime. While fingerprint databases typically show arrests, they often don’t include whether the individual was convicted. In fact, a 2015 federal report found that arrest records in 10 states included the final disposition of cases just 50% — or less — of the time.

But arrests, of course, don’t always lead to convictions. Without that extra check, job candidates who may have been arrested but never convicted could be unfairly losing out on jobs. At the same time, employers also could be setting themselves up for claims of discriminatory hiring practices when they consider arrest records but don’t find out how the case was resolved.

Colorado’s law aligns with the Equal Employment Opportunity Commission’s 2012 guidance to employers, which prohibits companies from excluding a candidate because of their arrest record. The Fifth Circuit in Texas recently invalidated that guidance, but the reach of the ruling is unclear. As a result, employers should continue conducting individualized assessments of their candidates’ criminal histories as practical.

Going forward, we expect that Colorado’s law will serve as model legislation for other states.

‘Clean Slate’ Legislation

In May, Colorado was the latest state to pass “clean slate” legislation, which seals certain criminal records from public view. The laws seek to deter recidivism by providing ex-offenders with an equal opportunity to land gainful employment despite their criminal past.

Under Colorado’s HB19-1275, most criminal records, except for those that involve violence, sexual crimes and some traffic-related offenses, can be sealed. While records aren’t automatically sealed, the process has been simplified.  Eligible individuals must fill out an application, which a judge reviews before the information is closed to public access. As part of the process, district attorneys also can raise objections. If that happens, the individual can present their case during a hearing.

According to the Clean Slate Campaign, laws like Colorado’s make a big difference for those with criminal records because the majority of employers conduct background checks when considering a prospective employee. One year after their records are cleared, according to research from the University of Michigan, individuals are 11% more likely to have a job and take home 22% higher wages.

Clean slate laws likely will move forward in other states where, like Colorado, the use of marijuana for medical and recreational purposes is legal. People who have been convicted of activities that have been decriminalized will be able to have their records sealed or expunged.

‘Ban the Box’

Like the clean slate and name-based background check laws, the Colorado Chance to Compete Act also aims to help people with criminal histories secure employment. Like so-called ban the box efforts in other states, the law limits when employers can ask a job candidate questions about their criminal history during the recruitment process. Colorado’s HB19-1025, however, is different from others on the books, for two reasons.

First, it scales. The first phase goes into effect for employers with 11 or more employees starting September 1. It then applies to all other employers on September 1, 2021.

The law also prohibits employers from inquiring about a candidate’s criminal history until after an initial application, but it doesn’t stop them from verifying whether they have a criminal history via public records at any point. Unlike many other states, Colorado has a robust statewide criminal records database that is easily accessed.

Pay Equity with Salary History Ban

The gender pay gap is narrowing, but women still earn only 80% of their male peers’ salary.  Like in other states, Colorado’s Equal Pay for Equal Work Act, SB19-085, makes gender-based wage disparities illegal unless the difference is based on a system that measures earnings related to the quantity or quality of production, seniority or merit, among other factors.

The law, which becomes effective January 1, 2021, also prohibits employers from seeking the wage history of a prospective employee or using their prior earnings history to determine their new salary. These salary history bans help put women on equal footing with their male counterparts because their new wage rates aren’t based on the lower salaries they may have earned in their previous jobs.

While like other measures across the country, Colorado’s law includes a couple of novel approaches. It mandates that employers provide notice of job openings and promotion opportunities, with pay scale details, to their existing workforce. It also encourages companies to conduct internal pay equity analyses to identify gender-based pay discrepancies and fix them. That effort could provide a safe harbor for employers from future enforcement actions and pay discrimination lawsuits.

Colorado’s recent actions are just another reminder that employment laws are changing rapidly around the country, forcing employers to make big changes to their hiring practices to remain in compliance.

But, even without laws mandating policy updates, evolving marketplace trends and expectations also are triggering shifts at the hiring level to ensure anybody who is qualified for a position gets a fair shot at the job and an equitable salary, regardless of their gender or background. And those are great reasons, on their own, for all employers to take another look at their hiring processes.

Alonzo Martinez

Alonzo Martinez is Associate Counsel, Compliance 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 National Association of Professional Background Screeners.

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