Recently enacted state legislation that aims to boost hiring may actually jeopardize California employers who are trying to safeguard their existing workers and business assets.
SB 530, which was signed by Governor Jerry Brown in October 2013 and became effective January 1, 2014, amended the California Labor Code to prohibit public and private employers from asking job applicants about criminal records that have been expunged, sealed or dismissed. Supporters—who pointed an accusing finger at businesses that shied away from hiring ex-cons and other individuals—touted the bill as a way to get rehabilitated and other individuals off a treadmill of unemployment by imposing significant penalties against businesses that pry too deeply during a job interview.
A separate bill that will be effective as of July 1, AB 218, will similarly bar public sector employers from asking about criminal records on employment applications.
The new restrictions don’t break entirely new ground, but do tighten the noose around California employers who may have concerns about a potential hire’s criminal past. The state’s Labor Code section 432.7 had already enjoined most public and private employers from asking job applicants to disclose information about an arrest or detention as long as it didn’t end in a conviction, or in admission to a pretrial or post-trial diversion program. And the pre-2014 law also prohibited employers from considering these issues in making a hiring decision.
But the new, far-reaching statute further cuts off queries by prohibiting employers from inquiring about job applicants’ criminal records that have been expunged, sealed or dismissed. There are some carve-outs though, including businesses that are required by law to obtain arrest or detention information. Also, an employer is likely to be exempt if the position requires the applicant to possess or to use a firearm in the course of his or her employment.
Companies that do not comply, though, could face stiff costs. An intentional violation may result in a penalty equal to the greater of $500 or treble actual damages, plus reasonable attorney’s fees and other costs, and a fine not to exceed $500.
The state’s move to expand protection for job applicants supplements federal efforts. The U.S. Equal Employment Opportunity Commission (EEOC), for example, noted in January 2013 that “…unless required by federal law or regulation, employers may not automatically bar everyone with an arrest or conviction record from employment. This is because an automatic bar to hiring everyone with a criminal record is likely to unjustifiably limit the employment opportunities of applicants or workers of certain racial or ethnic groups.”
But businesses can take some steps to minimize the risk of exposure, such as reviewing their hiring policies and procedures and revising them, if needed, to conform to the updated statute. A company’s human resources department—as well as employees and managers—should become familiar with the new law and should issue an updated employee handbook that addresses the issues. Also, to document their understanding, HR and other managers should sign an acknowledgment that they have received, read and understood the updated handbook.
Finally, employers that contract with third-party vendors for pre-employment screening services may wish to consult with them to ensure that the vendors’ reports have been updated to exclude, as appropriate, prohibited criminal background disclosures.
Complying with the new interview restrictions and taking steps to document compliance will certainly represent an additional cost to most businesses. Fortunately, they should not be overly burdensome, since the changes represent a modification of existing law, rather than establishing entirely new rules. But businesses do need to implement the new safeguards in a timely and thorough manner, especially in light of the penalties and the potential reputational damage a business could suffer as a result of violating the new law.
The enhanced interview restrictions may place California companies at somewhat of a competitive disadvantage compared to other states, but local businesses may gain some measure of comfort from knowing that the national playing field continues to be leveled.
Colorado, for example, already has laws that prevent employers from asking about sealed arrests or convictions, while other states, including Texas and Virginia, prohibit employers from requiring candidates to disclose expunged records.
Elsewhere, the New Jersey legislature is considering a bill that would prohibit employers from asking the question on job applications. In May 2013, Minnesota Governor Mark Dayton signed a law requiring private employers to wait until a prospective employee’s first personal interview before asking about criminal records. Rhode Island Governor Lincoln Chafee signed a similar bill last July.