Background Check Laws

If you’ve ever ran a background check, you’re probably familiar with the Fair Credit Reporting Act (FCRA). It’s straightforward and covers the dos and don’ts of background checks. What’s not always so clear and is subject to change more often, are the individual state laws regarding background reports. For instance, the NY Fair Credit Reporting Act, has more restrictive laws than the FCRA that employers need to watch out for in addition to standard FCRA guidelines. Here are the main differences to note, if the company you own or work for is located in New York.

1. New York City Salary History: (Intro. 1253), which went into effect October 31, dictates that it is an unlawful, discriminatory practice for an employer to inquire about or rely upon the salary history of a job applicant to determine their salary amount during the hiring process, including the negotiation of a contract. An applicant’s salary history includes current or prior wage, salary, benefits or other compensation. The law allows employers to discuss with job applicants their expectations about salary, benefits and other compensation. If an applicant, voluntarily and without prompting, discloses salary history to an employer, the employer may consider salary history in determining salary, benefits and other compensation for such applicant, and may verify that salary history.
2. New York State Human Rights Law: Huan Rights Law §296(16) provides protection (a) to persons with prior arrest records that were favorably resolved or resulted in sealed convictions or youthful offender adjudications, and (b) to persons with prior criminal conviction records. Employers are advised to consult with their own attorneys with respect to the specific application of the law.
3. What is Unlawful: It is unlawful to ask an applicant or employee whether he or she has ever been arrested or had a criminal accusation filed against him or her. It is also unlawful to inquire about youthful offender adjudications or sealed records. It is not unlawful to ask if a person has any currently pending arrests or accusations. It is also not unlawful to inquire about convictions. See the Previous Conviction section below. It is unlawful to deny employment, to refuse to hire, terminate, or take an adverse employment action against an applicant or employee, by reason of his or her having been convicted of one or more criminal offenses, if such refusal or denial is in violation of the provisions of Article 23-A of the New York State Correction Law. The Correction Law provides the standards to be applied and factors to be considered before an employment decision may be based on a previous conviction, including the factor that it is the public policy of the State of New York to encourage the employment of those with previous criminal convictions.
4. Pending Arrests: As long as an arrest or criminal accusation remains pending, the individual is not protected under the Human Rights Law. The employer may refuse to hire or may terminate or discipline the employee in accordance with applicable law. The employer may also question the employee about the pending arrest or accusation, the underlying circumstances, the progress of the matter through the criminal justice system, and the final disposition.

   If the arrest is subsequently terminated in favor of the employee, the employer cannot initiate an adverse action against the employee based on the arrest and cannot question the employee about the matter. The employer can require that the employee provide proof of the disposition in a timely manner.

5. Specific Circumstances That Are Protected: 

   The arrest or criminal accusation must have been:

   • dismissed, pursuant to Criminal Procedure Law, CPL 160.50
   • disposed of as a youthful offender adjudication, pursuant to CPL 720.35
   • resulted in a conviction for a violation, which was sealed pursuant to CPL 160.55
   • resulted in a conviction, which was conditionally sealed pursuant to CPL 160.58
6. Statutory protections: This protection is provided by Human Rights Law §296(15), in conjunction with Article 23-A of the Correction Law.
7. Factors From the Correction Law: Correction Law provides that an employer may not refuse to hire, may not terminate an employee, unless there is a direct relationship between the previous criminal offense(s) and the specific employment sought or held, or employment of the individual would involve an unreasonable risk to property or to the safety or welfare of specific individuals or the general public.

Tips For Employers:

• You may wish to wait until a conditional job offer is made before asking questions about the applicant’s criminal record or conducting a criminal background check. This allows the applicant to be considered on his or her qualifications first.
• Any question about arrest records may only pertain to pending arrests. You may also ask about a job applicant’s conviction history, except those convictions that were sealed, resulted in a youthful offender adjudication, or were dismissed. For example, you may ask :
  • Have you been convicted of a felony or misdemeanor?
    • The answer is NO if:
      • The conviction was sealed by the court,
      • The proceeding on the criminal offense resulted in a youthful offender adjudication, or
      • The conviction was reversed on appeal and the charge was dismissed
    • All types of criminal records and background checks may contain errors. When you are considering denying employment based on a background check, you should, at a minimum: 1) provide the applicant with a copy of the background check received and, 2) give the applicant an opportunity to identify and correct errors or otherwise explain what is listed on the background check. A discrepancy between what an applicant says and what the background check discloses does not always mean the applicant is lying. You may be found to have violated the law if you rely on a background check that turns out to be inaccurate unless you have provided an opportunity to the individual to correct the error. You may require that the applicant provide documentation in order to clarify errors. You must make an individualized decision in accordance with the Correction Law § 753 factors; you may not rely on a background check company service that issues recommendations for hiring the applicant.
    • Whenever you deny employment because of a conviction record, you are required by Correction Law § 754, upon the request of the applicant, to provide a statement setting forth the reasons for the denial. Such statement must be in writing and provided within 30 days of the request.

Federal Protections for Applicants With Criminal Records

There are two federal laws that protect applicants with criminal records, at least in some situations. The Fair Credit Reporting Act (FCRA) addresses the problem of accuracy. Criminal background checks may include errors. A court or other jurisdiction may omit some data such as information on convictions that have been expunged, incomplete information (for example, failing to report that the person was exonerated of a crime or that charges were dropped), misclassification of crimes, multiple listings of the same offense, and even records that belong to someone else entirely.

The FCRA imposes obligations on employers who request criminal background checks. Employers must do all of the following:

• Get the applicants written consent ahead of time.
• Tell the applicant if the employer intends to disqualify him or her based on the contents of the report. The employer must also give the applicant a copy of the report.
• Notify the applicant after the employer makes a final decision not to hire him or her based on the information in the report.

If an applicant disputes the contents of the report, the consumer reporting agency must conduct a reasonable investigation. If the investigation reveals that the report was incorrect, the agency must inform the applicant and any other person or company to whom it has provided the report.

Title VII of the Civil Rights Act of 1964 protects applicants and employees from discrimination in every aspect of employment, including screening practices and hiring. Because arrest and incarceration rates are so much higher for some ethnic groups, an employer that adopts a blanket policy of excluding all applicants with a criminal record might be guilty of race discrimination.

The Equal Employment Opportunity Commission (EEOC) has issued guidance explaining how employers can screen out applicants whose criminal records pose an unreasonable risk without engaging in discrimination. In deciding whether a particular offense should be disqualifying, employers must consider:

• the nature and gravity of the criminal offense or conduct
• how much time has passed since the offense or sentence, and
• the nature of the job (including where it is performed, how much supervision and interaction with others the employee will have, and so on).

And, the EEOC has said that employers should give applicants with a record an opportunity to explain the circumstances and provide mitigating information showing that the employee should not be excluded based on the offense.

Credit Reports: The Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. (FCRA), includes specific provisions governing “consumer reports” used or collected in whole or in part to evaluate an individual’s eligibility for employment, promotion, reassignment, or retention as an employee. A “consumer report” obtained for these “employment purposes” includes information obtained from public records. An employer should not inquire into an applicant’s credit records unless they are job-related. This includes information about credit rating, charge accounts, and bankruptcy.