For employers, the past decade came with plenty of highs, lows, and turbulence. We moved away from the job losses and bankruptcies associated with the 2008 financial crisis into a period of historically low unemployment, a skilled labor shortage, and new pushes to make the workplace fair for all.
“Ban the box” legislation, pay equity laws, and support across the country for legalized marijuana use are forcing new rules and policies in the workplace. As we look back on 2019, here are the employment laws and legal decisions that are reshaping the way employers evaluate job candidates and manage them once they’re hired.
Ban the Box and ‘Clean Slate’ Laws
Ban the box laws forbid the checkbox on hiring applications that seeks information about an individual’s criminal record. The laws also limit when employers can ask job seekers about their criminal histories.
Mostly in the last decade, nearly three dozen states and more than 150 communities have passed the measures, aimed at ensuring that ex-offenders aren’t immediately excluded from consideration for a job simply because of their past legal issues. In 2019, the trend continued.
New Mexico’s Criminal Offender Employment Act went into effect in June. It mirrors other ban the box laws, but it also sets out an express requirement for employers to have a discussion with job candidates if they plan to ask about their criminal histories. In other words, the requirement strikes an employer’s ability to make blind offers if they intend to check job candidates’ criminal records.
The Colorado Chance to Compete Act took effect for employers with 11 or more employees in September and will roll out to all private employers in the state in September 2021. The law says that employers must wait until after receiving an initial hiring application to ask a candidate about their criminal history. They can, however, search public criminal records at any time.
Local communities also passed their own laws in 2019. The Fair Chance to Work Law took effect in Westchester County, New York, in March. In Iowa, the city of Waterloo’s law became effective in October.
Measures to help ex-offenders find jobs now are evolving in the form of “clean slate” or criminal expungement laws, which let individuals seal some of their arrest or conviction records. In 2019, Colorado, Nevada, and West Virginia all passed clean slate laws. As we move into a new decade and more states follow suit, these laws should force employers to take another look at the criminal disclosure questions they ask job candidates during the background check process, especially as they relate to decriminalized activity such as legal marijuana use.
Pay Equity and Safe Harbor Laws
The gap in pay between men and women is no longer as wide as it once was, but it still exists. Women’s paychecks are about 15% smaller than men’s, according to the Pew Research Center.
Pay equity laws aim to close the gap for good, limiting when and whether employers can ask about a job candidate’s past wages. They seek to prevent employers from basing compensation packages on a new hire’s previous earnings, a practice that makes it difficult for women and minorities to earn the same as their higher-paid colleagues.
Oregon, Connecticut, Hawaii, Maine, Washington, Alabama and Illinois, as well as Kansas City, Missouri, and Suffolk County, New York, all had pay equity laws take effect in 2019. More are slated for 2020 and 2021.
Just like ban the box laws, pay equity measures are evolving. With pay equity, lawmakers are adding the concept of safe harbor. Colorado’s pay equity law, which passed in 2019 and becomes effective in 2021, for example, prompts employers to complete internal pay equity analyses to find wage differences based on gender and remediate them. The undertaking could provide safe harbor for employers from regulators and private plaintiffs when a pay discrimination claim arises.
Laws to legalize medical or recreational marijuana use are expanding across the country. And while users are enjoying more rights, employers are facing more restrictions as they grapple with what to do about their employees’ legal pot use. Marijuana, after all, is still a Schedule I controlled substance at the federal level even as states make it legal. New laws in 2019 are providing employers with some clarity.
New Jersey’s Jake Honig Compassionate Use Medical Cannabis Act, which became effective in July, bans employers from taking any adverse employment action against a medical marijuana user if the action is based only on the employee’s status as a medical marijuana patient.
New Mexico’s SB 406, effective in June 2019, also prohibits employers from firing an employee or declining to hire a job candidate simply because they use medical marijuana. Oklahoma’s Medical Marijuana and Patient Protection Act, which took effect in August, allows similar concessions for medical marijuana users.
And in Nevada, legislators approved AB 132. As of January 1, 2020, it is illegal to skip over a job candidate because a screening test indicated marijuana use.
The biggest outlier in employment-related marijuana laws, however, is New York City’s Int. No. 1445-A. The law, approved in 2019, bans pre-employment testing for marijuana starting this May.
Legal decisions also provided a path forward in 2019 for employers wondering whether they need to accommodate workers who use legal pot. In Whitmire v. Wal-Mart Stores Inc., the Arizona court ruled that Walmart should not have fired an employee who was a medical marijuana cardholder and whose drug test was positive for pot, because the state’s law specifically bans discrimination of pot users and there was no evidence she was impaired at work.
Like other related rulings, it confirmed that if employers operate in a state with statutes that accommodate marijuana use, they must comply with the state laws even though the drug is still illegal at the federal level.
Fair Credit Reporting Act Compliance
Court rulings delivered some important reminders to employers in 2019 about the importance of Fair Credit Reporting Act disclosures, which are required for pre-employment background checks.
Chief among them was Gilberg v. California Check Cashing Stores, LLC. In the case, a fired employee of California Check Cashing Stores filed a lawsuit against her former employer for failing to appropriately provide the FCRA disclosures. When she applied for the job, the plaintiff signed a single-page form that was written in eight-point type and included the FCRA disclosure along with other information. The Ninth Circuit ruled in favor of the former employee.
Like other litigation that raises similar questions, the ruling tells us that a plain reading of the act is how courts are interpreting the federal law. To avoid potential lawsuits, employers must exclude extraneous information from their FCRA disclosures just as the law states.
As we look back on 2019, new employment laws and litigation have driven overhauls to traditional employment policies and practices. And as we move into the next decade, with new technologies to streamline hiring and continued efforts to build an equitable working experience for all, there will only be more to come.
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