Colorado has become the latest jurisdiction to join the “ban the box” movement. The Colorado Chance to Compete Act, signed into law by Gov. Jared Polis (D) on May 28, will take effect September 1 for employers with 11 or more employees. It will apply to all employers, regardless of size, on September 1, 2021.

The Act, which aims to give applicants with criminal records a more meaningful chance to compete for jobs, limits an employer’s ability to ask about criminal history at the application stage and also limits statements about criminal history on job applications and advertisements.

Key provisions of the Act

“Criminal history” is defined in the Act as “the record of arrests, charges, pleas, or convictions for any misdemeanor or felony at the federal, state or local level.” Specifically, under the Act,

• Employers may not state that a person with a criminal history may not apply for a position in an advertisement for employment or on any application, and
• Employers may not ask about an applicant’s criminal history on the initial application.  However, employers may obtain publicly available criminal background reports of an applicant at any time.

The above-described prohibitions do not apply if

• A federal, state, or local law or regulation prohibits employing a person with a specific criminal history in the position being offered or advertised, or
• The employer has designated the position to participate in a government program to encourage the employment of individuals with criminal histories, or
• The employer is required by law or regulation to conduct a criminal history check for the position.

The Act does not apply to state or local governments, or to quasi-governmental entities or political subdivisions of the state.

The Act does not confer a private right of action or create a protected class. If an employer violates the Act, the affected individual may file a complaint with the state Department of Labor and Employment within a year of the claimed violation. If the Department finds that the complaint has merit, the employer will be directed to comply within 30 days. Other penalties, which are in addition to the order, vary depending on the number of violations by the employer. For a first violation, the employer receives a warning. For a second violation, the employer may be asssessed up to $1,000. For a third or subsequent violations, the employer may be assessed up to $2,500.

Employers with 11 or more employees in the state of Colorado should immediately review and, if necessary, revise their application forms and job advertisements to comply with the new legal requirements.

A word about “disparate impact”

Although the Act does not limit an employer’s use of criminal history information after the application stage, the use of criminal background information at any stage can give rise to discrimination claims, including disparate impact claims, under state or federal law. “Disparate impact” occurs when a facially neutral policy or practice disproportionately affects individuals in a protected group. For disparate impact claims, it is not necessary for the plaintiff to show that the employer had any actual intent to discriminate.

In the context of criminal background information, the U.S. Equal Employment Opportunity Commission says that it is not unusual for such policies to result in the disproportionate exclusion of African-American or Hispanic males. It is a defense to a disparate impact claim if the employer can show that the requirement was justified by business necessity, but the plaintiff can still prevail if he or she can show that there were effective alternatives that would have lessened the disparate impact.

To ensure that your company is best positioned to avoid potential pitfalls under any law when considering criminal histories in making employment decisions, we recommend that you consult with your employment counsel.