SALARY HISTORY LAWS
The changing legislation regulating the collection and use of salary history information is a new area of concern for employers. We anticipate legislative activity on this topic on the state and local level will continue to increase throughout 2018.
The laws themselves are actually pretty straightforward – employers cannot inquire into or use a candidate’s current or past salary history information during the hiring process. There are of course some slight variances and requirements, but the intent of this legislation is to ensure individuals are treated equally as it relates to compensation offered during the hiring process. An oft-cited rationale for these laws points to the likelihood that women may be compensated at lower levels than their male colleagues – a gap that continues to proliferate position-to-position when prior compensation is collected and used to determine current pay scales.
To help protect yourself from liability, it’s important to ensure salary history information is not being requested or verified during the employment verification process unless there is an exception that exists under applicable law. Additionally, if pay stubs, W-2s, or other documents containing salary information are being used to verify employment, candidates should be instructed to redact all salary information.
At Asurint, we’ve updated our background screening processes to comply with these laws as required. For non-clients, we encourage you to ask your current provider what steps they’ve taken to keep up-to-date on these regulations.
FAIR CHANCE AND BAN THE BOX LAWS
Ban the box laws became popular many years ago and started with the intent to remove criminal history questions from employment applications. The driving concept behind this legislation is to provide individuals with criminal history a more competitive chance at finding gainful employment versus being evaluated on their past alone.
These laws have since evolved into “fair chance” legislation in some jurisdictions, impacting the adverse action process, requiring individualized assessments and/or limited the criminal history information employers can consider. As the landscape becomes increasingly complex, it’s easy to run afoul of these complicated regulations.
Trying to stay compliant with these laws becomes more daunting when you realize how much location-based variation already exists. In some instances, such as in California, there are multiple in-state regulations, even changing from city to city. For instance, San Francisco and Los Angeles each have disparities in their requirements.
The way violations are imposed also varies by jurisdiction. For instance, New York City’s fair chance law is written in a way where employers can be held liable for violations regardless of whether the consumer suffered any harm.
Non-compliance with fair chance and ban the box laws have already resulted in serious charges in several cities. New York City is perhaps where employers have felt the most pain. For example, in November 2017 the New York City Commission on Human Rights (NYCCHR) announced charges against 12 national and local businesses for violations of its “Fair Chance Act”.
Continued education is crucial to reducing your legal liability. This is especially true when hiring candidates in multiple locations that require compliance with varied and ever-changing regulation. The compliance team at Asurint is dedicated to helping educate all our clients as regulations continue to change. If you’re not an Asurint client, it’s important to work with your current provider to ensure that you’re receiving up-to-date information on this ever-evolving landscape.
OLD ISSUES RETURN TO PROMINANCE
We often see that trends are cyclical in nature and issues that we believe had been put to rest arise once again. In 2018, concerns around credit history and criminal data use in hiring practices are once again heating up.
Following the large-scale breach in 2017 at a nationwide credit reporting agency, renewed concern has arisen around the use of credit history in employment decisions. Several bills have been introduced at the state and federal levels aimed at instituting stricter data security requirements. On the Federal level, Senator Elizabeth Warren and Congressman Steve Cohen recently introduced the “Equal Employment for All Act” which seeks to protect applicants from unfair discrimination based on credit history.
The Equal Employment Opportunity Commission (EEOC) remains active in analyzing the use of criminal data in employment decisions following the release of its 2012 Guidance on the topic. Essentially the EEOC believes that because individuals in certain protected classes are more likely to be arrested and convicted, an employer policy that excludes individuals with prior criminal histories across the board will inevitably commit discrimination.
While the EEOC has suffered a few setbacks, they have also successfully enforced the Guidance against employers – even though the Guidance is not technically law. An example of this is a settlement with BMW. Originally filed in June 2013, the EEOC alleged BMW’s bight-line disqualification of contractors with criminal histories (many of whom had been working in BMW facilities for several years) resulted in racial discrimination.
BMW entered into a consent decree in September 2015 which required them to pay $1.6 million to impacted individuals, change their hiring policies, re-train employees and offer the claimants employment through a labor contractor. The EEOC has also filed recent charges against employers including against a nationwide retailer in May 2017 and a janitorial service provider in July 2017 proving that they remain committed to enforcing the 2012 Guidance.
How to Mitigate Risk
We recommend partnering with your background screening provider to stay current on these changing laws and regulations that impact your hiring process. At Asurint, we work every day to track these changes and educate our clients. Consulting with other HR-focused organizations and partnering with qualified legal counsel are also great ways to stay informed to help mitigate risk to your business.