Updated August 2021 – On July 15, 2021, the New York City Commission on Human Rights issued an updated legal enforcement guidance on the Fair Chance Act. The new guidance clarifies key aspects of the amendments that take effect on July 29, 2021. This article has been updated to reflect the additional guidance.
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:
- Requires employers to undertake an individualized assessment using a set of eight (8) factors (known as the “Article 23-A factors”) when deciding whether:
- A job applicant’s conviction history is related to the job being applied for; or
- Employment of the individual would involve unreasonable risk to people or property.
- Prohibits inquiries into criminal history prior to an offer of employment being made; and
- Requires employers provide applicants with written notice of the Article 23-A factor analysis of their conviction history; and
- Provides time for the applicant to respond before a job offer can be withdrawn based on their criminal history.
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:
- That New York public policy encourages the licensure and employment of people with criminal records;
- The specific duties and responsibilities of the prospective job;
- 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;
- 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;
- The age of the applicant during the events that led to their conviction;
- The seriousness of the applicant’s conviction record, judged by the applicant’s conduct.
- 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);
- 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:
- 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;
- The specific duties and responsibilities necessarily related to the employment held by the person;
- 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;
- 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;
- The seriousness of such offense or offenses;
- 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
- 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.
NYC FCA Enforcement Guidance Considerations
On July 15, 2021, the New York City Commission on Human Rights issued an updated enforcement guidance on the NYC FCA. The new guidance clarifies the following additional aspects of the amendments that take effect on July 29, 2021:
- Non-criminal history background checks must be completed prior to criminal history being considered. The enforcement guidance makes clear that employers will need to implement a two-tiered screening process for applicants:
- 1) all non-criminal pre-employment screenings, such as a review of the applicant’s employment and educational history, must be completed and passed by the applicant before a conditional offer of employment is made; and
- 2) employers may, after a conditional offer of employment, request and review the applicant’s criminal history, which may only be considered in compliance with the individualized assessment, notice and consideration requirements of the FCA.
- Employers may not consider any non-convictions in the hiring process or during employment. However, the restriction on consideration of non-convictions do not prohibit consideration of an applicant’s driving or motor vehicle record.
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:
- Provide the applicant a copy of any background check or other documents used to identify a criminal history;
- Evaluate the applicant using the Article 23-A factors and share the written evaluation that resulted with the applicant; and
- Hold the job open for at least 3 business days so the applicant can respond.
Employer Steps for Pending Accusations or Convictions
The enforcement guidance clarifies the NYC FCA 7 factors are to be applied when considering pending criminal charges of applicants or employees, or convictions of current employees. Effective July 29, 2021, employers must follow the steps below for any pending arrests/criminal accusations or convictions against an employee:
- Request information from the employee that may be relevant to the new 7-factor analysis;
- Evaluate the 7 factors to determine whether:
- There is a direct relationship between the employee’s pending arrest/criminal accusation and their job; and/or
- The employee creates an unreasonable risk to property or to the safety of specific individuals or the general public;
- Give the employee a written copy of such analysis with supporting documents and the employer’s reasons for taking the employment action;
- Allow the employee a reasonable time to respond before taking adverse action.
The 7 factors listed above are to be applied only when considering pending arrests, or charges or convictions occurring during employment. The guidance clarifies that if an applicant has both a conviction history and a pending charge, the employer must separately analyze each according to the relevant factors (for an applicant’s criminal history preceding employment, other than pending arrests or charges, the full Article 23-A factors must still be applied).
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 Action Items
- 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 and should consult employment law counsel for assistance with these action items to ensure their background check processes comply with the Fair Chance Act as amended.
- NYC.gov: Fair Chance Act
- NYC.gov: Fair Change Act: Fact Sheet for Employers
- NYC.gov: Legal Enforcement Guidance
- NYC.gov: Frequently Asked Questions
- NYC.gov: Fair Chance Act Brochure
- New York City Commission on Human Rights
- Sequoia Foreword: California DFEH Releases FAQs on its Ban-the-Box Law
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