On January 10, 2021, New York City (“NYC”) Mayor Bill DeBlasio approved a bill amending NYC’s Fair Chance Act (“NYC FCA” or “Act”). The amendment expands the prohibitions on employers from taking adverse actions against applicants, and now employees, in NYC based on their criminal history. The amendments will go into effect July 29, 2021. This article provides an overview of the NYC FCA and highlights key considerations in light of the bill’s expansion of certain protections.

NYC Fair Chance Act

The NYC FCA does the following:

  1. Requires employers to undertake an individualized assessment using a set of eight (8) factors (known as the “Article 23-A factors”) when deciding whether:
    1. A job applicant’s conviction history is related to the job being applied for; or
    2. Employment of the individual would involve unreasonable risk to people or property.
  2. Prohibits inquiries into criminal history prior to an offer of employment being made; and
  3. Requires employers provide applicants with written notice of the Article 23-A factor analysis of their conviction history; and
  4. Provides time for the applicant to respond before a job offer can be withdrawn based on their criminal history.

Covered Employers

The NYC FCA applies to all employers with four or more employees nationwide and least one employee working in NYC.

Article 23-A Factors (8 Factors)

Under Article 23-A, applicants cannot be denied work simply because of their criminal history. Employers may only decline to hire someone based on criminal history if there is a direct relationship between the applicant’s criminal record and the prospective job or if they can demonstrate that employing the person creates an unreasonable risk to property or to the safety of specific individuals or the general public.

Employers must consider the following eight factors in making their determination:

  1. That New York public policy encourages the licensure and employment of people with criminal records;
  2. The specific duties and responsibilities of the prospective job;
  3. The bearing, if any, of the person’s criminal record on their fitness or ability to perform one or more of the job’s duties or responsibilities;
  4. The time that has elapsed since the occurrence of the events that led to the applicant’s criminal conviction, not the arrest or conviction itself;
  5. The age of the applicant during the events that led to their conviction;
  6. The seriousness of the applicant’s conviction record, judged by the applicant’s conduct.
  7. Any information produced by the applicant, or produced on the applicant’s behalf, regarding their rehabilitation or good conduct (note this information must be affirmatively requested from applicants);
  8. The legitimate interest of the employer in protecting property and the safety and welfare of specific individuals or the general public.

In addition, if an applicant provides a certificate of relief from disabilities or a certificate of good conduct, the employer must presume they are rehabilitated.

NYC FCA New Amendment

Effective July 29, 2021, the scope of the Act is expanded to add new protections for both applicants and employees, with pending arrests or convictions during employment in the following ways:

  • An employer must now evaluate the pending arrest and/or criminal accusations considering the following seven (7) factors prior to taking an adverse employment action:
  1. The policy of New York City to overcome stigma toward, and unnecessary exclusion of, persons with criminal justice involvement in the areas of licensure and employment;
  2. The specific duties and responsibilities necessarily related to the employment held by the person;
  3. The bearing, if any, of the criminal offense or offenses for which the applicant or employee was convicted, or that are alleged in the case of pending arrests or criminal accusations, on the applicant or employee’s fitness or ability to perform one or more such duties or responsibilities;
  4. Whether the person was 25 years of age or younger at the time of occurrence of the criminal offense or offenses for which the person was convicted, or that are alleged in the case of pending arrests or criminal accusations;
  5. The seriousness of such offense or offenses;
  6. The legitimate interest of the public agency or private employer in protecting property, and the safety and welfare of specific individuals or the general public; and
  7. Any additional information produced by the applicant or employee, or produced on their behalf, in regard to their rehabilitation or good conduct, including history of positive performance and conduct on the job or in the community, or any other evidence of good conduct.

Note that these factors are similar to, but are not the same as, the Article 23-A factors that apply to applicants in making hiring decisions based on a criminal conviction record.

  • An employer now must solicit information from applicants and employees that may be relevant to the above factor analysis;
  • An employer must provide at least five (5) business days to respond to an employer’s notice of an adverse decision;
  • An employer may place current employees on unpaid leave for a “reasonable” amount of time while they conduct an analysis of the arrest or criminal accusation pursuant to the NYC FCA. We expect future guidance on the interpretation of what is a “reasonable” amount time for unpaid leave;
  • The amendment clarifies that an employer may take adverse employment action against an applicant or employee found to have made intentional misrepresentations about an arrest or criminal history. An employer must provide the individual with the information forming the basis of the misrepresentation and provide a reasonable time to respond. We expect future guidance on the interpretation of “reasonable time” for a current employee to respond.

Notification Requirements for Revocation of a Conditional Job Offer under the Act

If an employer decides to revoke a conditional job offer after considering an applicant’s criminal history, the NYC FCA requires employers to complete the following three steps:

  1. Provide the applicant a copy of any background check or other documents used to identify a criminal history;
  2. Evaluate the applicant using the Article 23-A factors and share the written evaluation that resulted with the applicant; and
  3. Hold the job open for at least 3 business days so the applicant can respond.

Employer Steps for Pending Accusations or Convictions

Effective July 29, 2021, employers must follow the steps below for any pending arrests/criminal accusations or convictions against an employee:

  1. Request information from the employee that may be relevant to the new 7-factor analysis;
  2. Evaluate the 7 factors to determine whether:
    1. There is a direct relationship between the employee’s pending arrest/criminal accusation and their job; and/or
    2. The employee creates an unreasonable risk to property or to the safety of specific individuals or the general public;
  3. Give the employee a written copy of such analysis with supporting documents and the employer’s reasons for taking the employment action;
  4. Allow the employee a reasonable time to respond before taking adverse action.

Exceptions to the Requirements Under the Act

An exception to the prohibition on pre-offer criminal history inquiries under the NYC FSA applies if an employer, under applicable federal, state, or local law, is required to conduct criminal background checks for employment purposes or to bar employment in a particular position based on criminal history.

Penalties for Non-compliance

Employers that fail to follow the specific factor analysis or fail to follow the process for revoking offers after considering criminal history may be liable for damages and/or penalties under the NYC’s Human Rights Law. An employer will be liable for any NYC FCA violations committed by third party entities hired by the employer to manage any aspect of its recruitment, interviewing, or hiring processes.

Employer Considerations

  • Employers should consider reviewing their hiring process, job postings and applications, to ensure compliance, including the timing of criminal history background checks and the distribution of appropriate notices under the recent amendments to the NYC FCA.
  • Employers should ensure human resources and hiring staff are fully informed about when and how criminal background information may be considered in the hiring process and how information should be considered where a pending arrest or criminal accusation arises during employment.
  • Employers working with our Sequoia One PEO are encouraged to reach out to their dedicated HR Business partner with any questions.

Additional Resources

Disclaimer: This content is intended for informational purposes only and should not be construed as legal, medical or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable. This information and any questions as to your specific circumstances should be reviewed with your respective legal counsel and/or tax advisor as we do not provide legal or tax advice. Please note that this information may be subject to change based on legislative changes. © 2021 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved

Lizet Ramirez – Lizet is a Client Compliance Manager for Sequoia One, where she works with our clients to optimize and streamline benefits compliance. In her free time, Lizet enjoys live music, travel, hiking and spa days.