Laws limiting inquiries into a potential employee’s prior arrests or convictions are referred to as “ban the box” laws. According to recent studies, one in four Americans has an arrest or conviction on their record. The “ban the box” laws are aimed at removing barriers for those individuals who have been rehabilitated.
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In an effort to address this growing issue of concern, in November 2015, President Obama announced a new mandate to the federal government’s human resources department to “delay inquiries into criminal history until later in the hiring process.” Specifically:
“The President has called on Congress to follow a growing number of states, cities, and private companies that have decided to ‘ban the box’ on job applications. We are encouraged that Congress is considering bipartisan legislation that would ‘ban the box’ for federal hiring and hiring by federal contractors. In the meantime, the President is directing the Office of Personnel Management (OPM) to take action where it can by modifying its rules to delay inquiries into criminal history until later in the hiring process. While most agencies already have taken this step, this action will better ensure that applicants from all segments of society, including those with prior criminal histories, receive a fair opportunity to compete for Federal employment.”
Shortly thereafter, in December 2015, Governor John Kasich signed into law Ohio’s new “ban the box” legislation. This law, which is also known as the “Fair Hiring Act,” took effect as of March 23, 2016. The Act prohibits all Ohio public employers from inquiring into and considering the criminal background of applicants during the general application portion of the hiring process.
Newly enacted Section 9.73 of the Ohio Revised Code reads, in pertinent part, that:
“(B) No public employer shall include on any form for application for employment with the public employer any question concerning the criminal background of the applicant.”
There is nothing in Ohio’s new Act that precludes public employers from including on its application a statement advising the applicants of state or federal laws that automatically disqualify applicants with a particular criminal history from employment for specific positions. There is also nothing in the Act that prevents an employer from conducting background checks or inquiring as to an applicant’s criminal background, provided that such inquiries are made later in the interview process. As discussed below, such background checks and inquiries must still comply with the limitations set forth in Title VII, state laws, and the Fair Credit Reporting Act (FCRA).
Thus, under the new “ban the box” law, public employers in Ohio cannot run a background check on a potential new hire until after the applicant has been selected, and the employer is ready to make an offer of employment. While public employers are not prohibited from rejecting an applicant based on a criminal record, employers must now make an individualized determination that the criminal record is relevant to the job responsibilities before rejecting the applicant. After making such a determination, the employer must then state in writing that the applicant’s criminal history was the basis of denying employment.
While the Act does limit when a public employer can inquire into an applicant’s criminal history, it does not impact how such criminal background checks and credit checks are to be conducted under Title VII, state laws, and the FCRA. In 2012, the EEOC issued guidance on employers’ use of criminal history, emphasizing that the use of conviction records to exclude applicants can disparately impact minorities. Since issuing this guidance, the EEOC has filed suit against many US employers on the basis that their criminal background check policies resulted in discrimination in violation of Title VII. Therefore, regardless of whether or not employers are affected by any “ban the box” laws, they should still consider this EEOC guidance and provide an opportunity for applicants to explain convictions, permit individualized inquiries for particular positions and convictions, and eliminate policies that bar all individuals with convictions from consideration for employment.
Similarly, credit checks for hiring and employment considerations have also come under scrutiny in recent years. Many Americans have been impacted by the recession with resulting bad credit. To address this issue, laws restricting employer’s use of credit history for employment decisions are currently in effect in nine states – Colorado, California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and Washington.
Employers should also continue to be mindful of their obligations under the FCRA when conducting background checks. The FCRA mandates that employers must notify applicants prior to conducting background checks, obtain applicants’ authorization to perform background checks, and provide a copy of the report obtained by the employer. There are many other obligations under the FCRA that an employer must satisfy before and after taking any adverse employment action due to the background check results, such as rejecting a job application or revoking an offer of employment. A wave of recent class action lawsuit filings alleging FCRA violations has swept across the country, presumably because the FCRA provides for statutory damages up to $1,000 per violation, the potential for punitive damages, and the recovery of attorneys’ fees. Employers would be wise to ensure that they are in compliance with all of FCRA requirements.
Like Ohio’s “ban the box” law, the vast majority of “ban the box” laws currently enacted by other state and local governments apply only to public employers. However, a growing number of other ” ban the box” laws have passed which extend the restrictions to private employers. For example, private employer “ban the box” laws exist in the following states and cities: Hawaii; Massachusetts; Minnesota; Rhode Island; Buffalo, New York; Newark, New Jersey; Philadelphia, Pennsylvania; Seattle, Washington; San Francisco, California. Many other states and cities are also considering “ban the box” legislation that would apply to private employers. It may be just a matter of time before Ohio decides to extend its “ban the box” law to private employers as well.
Employers who are caught unaware, or do not comply with the “ban the box” laws enacted by their state or local governments risk exposure to fines and penalties and becoming a target for individual and class wide lawsuits. In order to avoid such risks, Ohio public employers should take the following actions to minimize their exposure, comply with the laws, and avoid potentially significant fines and penalties:
- Determine what public employers are prevented from asking about entirely, such as non-conviction arrests and expunged records;
- Review all employment applications and remove or appropriately limit questions about criminal history;
- Ensure hiring policies delay inquiry about criminal history until the relevant law permits such inquiry; and
- To avoid EEOC investigation and costly class action lawsuits, all public employers should determine if their hiring policies are in line with EEOC guidance, state laws regarding credit checks, and FCRA requirements.