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Ban the Box Laws, Salary History Restrictions, Class Action Litigation, Oh My!

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William J. Simmons, a Shareholder from Littler Mendelson, P.C., and Laura Randazzo, VP of Compliance at CareerBuilder Employment Screening explain recent trends in ban the box compliance, salary history compliance & FCRA class action. For more info. on employment screening visit https://cb.com/employmentscreening.

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Ban the Box Laws, Salary History Restrictions, Class Action Litigation, Oh My!

  1. 1. Ban the Box Laws, Salary History Restrictions, Class Action Litigation, Oh My! William J. Simmons Laura Randazzo January 18, 2018
  2. 2. Presented By William J. Simmons Shareholder Littler Mendelson, P.C. wsimmons@littler.com 267.402.3047 2 Laura Randazzo VP of Compliance CareerBuilder Employment Screening
  3. 3. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential Agenda 1. Emerging Ban The Box Compliance Trends 2. Emerging Salary History Compliance Trends 3. Emerging FCRA Class Action Trends
  4. 4. Emerging Ban The Box Compliance Trends
  5. 5. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential • Most employers now understand many jurisdictions across the country “ban the box” • Often missed are other requirements that go beyond “ban the box” “Ban the Box”  “Fair Chance Act”
  6. 6. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential • Some laws require special notice or posting requirements – E.g. – San Francisco – must provide notice of rights before conducting check – E.g. – Philadelphia – website posting requirement – E.g. – SF, Phila., LA – if making statement about background checks in pre-hire process, must include special language about considering those with criminal histories Special Notice/Posting Requirements
  7. 7. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential • Some laws will not allow you to use form employment applications with “disclaimers” – E.g., New York City, Philadelphia, District of Columbia (informal enforcement position) Restrictions On Using “Disclaimer” Approach
  8. 8. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential • Some jurisdictions require changes to pre-adverse action process – E.g., Individualized assessments mandated regardless of protected characteristics in many jurisdictions – E.g., New York City, Los Angeles Assessment Forms – E.g., California and other jurisdictions’ requirements to specify particular criminal records that concern the employer – E.g., Philadelphia’s requirement of 10 business days, California’s 5+5 business day requirement Changes to Pre-Adverse Action Process
  9. 9. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential • New laws are passed all the time • Evaluate whether your consumer reporting agency’s pre-adverse action product meets your needs and the local requirements • If performing the process in-house, train responsible personnel regularly and assign an in-house “SME” to track developments Managing the Headaches
  10. 10. Emerging Salary History Ban Compliance Trends
  11. 11. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential Salary History Bans Delaware Oregon California City of San Francisco Albany and New York City, NY Philadelphia, PA Massachusetts Puerto Rico
  12. 12. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential • Off-limits to ask a question on an employment application or otherwise inquire about an applicant’s prior compensation during the hiring process. • Employer may not rely upon prior salary history (other than that volunteered by the applicant – more to come) to decide whether to offer employment or to set the salary the applicant will make in the job. Common Restrictions
  13. 13. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential • None of the laws expressly prohibit this. • Some of the laws expressly approve of salary expectation discussions (DE, NYC, Phila., SF). • For now, asking this question is a calculated risk. Consider your business needs and where you do business vs. the desire to “play it safe”. 1. Can we ask what the candidate’s salary expectation is?
  14. 14. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential • Most laws will prohibit this. • NYC and SF have narrow exceptions; can ask about “unvested equity or deferred compensation that an applicant would forfeit or have cancelled by virtue of the applicant’s resignation from their current employer.” • Consider, rather than asking about amounts, more targeted questions that get to the root of the issue – did the applicant meet his or her targets/goals/quotas; was he or she successful? 2. Can we ask questions about stock/bonus vesting amounts/schedules?
  15. 15. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential • CA is the only law that requires that an employer provide the "pay scale” of the position. • For some jobs there may only be one pay rate: Forklift driver – $13 per hour. If you've been driving the forklift for a week, or year, or 20 years, the rate is $13 per hour. • Most jobs, however, there are a range of possible wage rates. • At a minimum, employers should provide consistent information to all job applicants about the pay scale. 3. How do we respond if someone asks me for the salary range?
  16. 16. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential • Laws vary in how to address “voluntary” disclosures. • Unlikely any “safe harbor” language to use to prompt a disclosure while keeping it “voluntary”. • In hindsight, almost any “voluntary” disclosure will be subject to scrutiny. • Consider documenting that the applicant volunteered. Consider not recording the $ information itself to avoid misuse. • Some laws do say information can be used to set salary if volunteered (CA, NYC, Phila., SF) – exercise caution. • DO NOT use the information to reject the candidate. 4. How should I respond if a candidate voluntarily discloses their salary info? $
  17. 17. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential • Employers should assume that recruiting agencies, temporary agencies, consumer reporting agencies act on their behalf. • Some laws provide a “safe harbor” if the vendor is instructed not to provide the information (DE) or passes along the information incidental to confirming other non-salary information in a background check (SF). • Consult with your consumer reporting agency to discuss your approach to these laws. 5. Can a third party ask the candidate for their salary history? What happens when/if the third party shares this info with me?
  18. 18. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential • The laws are generally ambiguous on coverage in these situations. (Exceptions: Phila. Regulations, SF, which narrow to jobs in the city). • This is something that may be sorted out in the courts in years to come. • To be on the safe side, you may want to assume that bans apply based on location of candidate’s residence or job. • Consult your consumer reporting agency to ensure you are both on the same page about the approach that is used. 6. Do the laws apply to positions that are in the field/out of state?
  19. 19. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential • None of the laws specifically address or prohibit the “disclaimer” approach. Compare with some “ban the box” laws where the practice is expressly prohibited. • Because laws are new, regulatory agencies have yet to comment. • If using a disclaimer, consider methods to make it as prominent as possible (larger font, bold, etc.) (“If you live in or the job you are applying for is located in . . . ) • The more laws that are passed, the greater degree of difficulty using a disclaimer as it can become cumbersome and potentially ineffective. 7. Can we use a “disclaimer” on written materials?
  20. 20. Emerging FCRA Class Action Trends
  21. 21. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential Disclosure World Still Unclear Potential Willful Violation – Potential $Millions in Automatic (Statutory) Damages Violation, But Not Willful No Statutory Damages (Oh But Wait . . . Actually It Is “Willful”) Lawful form No Damages, No Liability
  22. 22. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential Other Trending Disclosure Theories 22 • “Release of Liability” and so-called “Implied Release of Liability” • State law notices combined with general disclosure in the same “document” • Special DOT “trucking” provisions • Anything else you (they) imagine!!
  23. 23. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential Trending Pre-Adverse Action Theories 23 • Verbal notice to candidates • Lack of so-called “bona fide” pre- adverse action process • Time between candidate’s “receipt” of letter and action too short • Computer glitches/systems undermining program
  24. 24. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential Recommendations – Consult legal counsel on review of forms; do not use “set and forget” approach – If you use a consumer reporting agency for the pre-adverse action process, ensure you understand the options – Consider conducting yearly audits to ensure process is working as expected – Consider training “on the ground” staff
  25. 25. Questions 25
  26. 26. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential Click the link to request more information about CareerBuilder Employment Screening https://cb.com/2CzMuiK 26 Learn more about CBES
  27. 27. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential We recognize the value in continuing education. As a result of attending this webinar, you are able to earn: 1.0 CE credits through SHRM and ASA SHRM • Follow the instructions on the SHRM Certification Page • Input the following Activity 18-VXZUX ASA • Follow the instruction found here to submit for your credit 27 Professional Development Certification Credits SHRM & ASA

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