NYC Fair Chance Act Amendments & Guidance

As employers may recall, the New York City Council passed amendments to the New York City Fair Chance Act earlier this year. Those amendments took effect on July 29, 2021. The New York City Commission on Human Rights (NYCCHR) issued a guidance document on July 15, 2021, interpreting the amendments, as well as an amended Fair Chance Act Notice that employers should use going forward when analyzing an individual’s criminal history.  A brief summary of the guidance is below.  For more information on the portion of the amendments not covered below (e.g., the application of “fair chance factors” to current employees), please see our prior client alert. Employers should also be aware that the protections under the Fair Chance Act now apply to interns, freelancers, and independent contractors.

Two-Step Background Check

One of the most significant changes enacted by these amendments is the bifurcated process employers must now use when conducting criminal background checks.  The amendments had made clear that the background check could not take place until a conditional offer of employment was made – meaning an offer that was conditioned only on the clearance of the background check and any ADA medical examinations.  The guidance, however, further clarifies that, employers must review an applicant’s non-criminal pre-employment screenings, such as an employment and educational history verification, separately from any criminal history. Only after the non-criminal information is reviewed and deemed satisfactory can the employer review an applicant’s criminal history (motor vehicle records also cannot be reviewed until this step as they often reveal criminal activity).

Employers who use a third-party vendor for background checks should request separate reports for non-criminal information and criminal history/motor vehicle reports. If receiving two separate reports is not possible, then employers must establish a system to internally segregate criminal history information so that criminal history is available to decisionmakers only after a conditional offer has been made. As the change impacts the manner in which many employers receive and review background check information, employers should take steps to update their background check process as soon as possible.

Prohibited Language in Authorization Forms

According to the guidance, employers can no longer use the term “background check” in any authorization notice or form they use prior to a conditional offer.  Instead, the guidance states that employers should use terms such as “consumer report” or “investigative consumer report”. If employers have specific questions about the forms or notices they use, they should contact counsel as this change may impact offer letters, as well as state fair credit and reporting act notices.

Complete Protection of Non-Convictions

Under the amendments, employers are now prohibited from seeking information about, expressing or implying an employment limitation related to, or basing an adverse employment action on, a person’s non-conviction. The guidance includes a non-exhaustive list of the types of criminal histories that qualify as non-convictions, which employers may want to review.

Takeaways

Employers should reach out to any third-party vendor they use for background checks to ensure they comply with the bifurcated process of review. Internal review processes related to background checks and all related hiring and recruiting documents should also be evaluated for compliance with the new guidance. Employers should also review the language of all notices, forms, and authorizations they use related to background checks to ensure compliance with the guidance.  In addition, all human resources and management staff involved in recruiting should be trained on new procedures developed to comply with the guidance.

There are additional changes under the amendments involving criminal convictions of current employees arising during employment and misrepresentations of criminal history that are not covered in this alert. Employers should consult our previous client alert or contact the firm with questions related to these issues. Further, if you have any questions regarding the alert, please contact Caroline Secola at csecola@fglawllc.com, or any attorney at the Firm.

DISCLAIMER: This alert is provided to clients and friends of the firm for informational purposes only and the distribution of this alert is not intended to, and does not, establish an attorney-client relationship. This alert also does not provide or offer legal advice or opinions on any specific factual situations or matters. This communication may be considered Attorney Advertising. Prior results do not guarantee a similar outcome.