As we previously advised, the City of New York amended its Fair Chance Act (“FCA”)—also known as the “ban the box” law—which limits the types of inquiries employers can make regarding criminal history during the hiring process and restricts when an employer can first seek criminal background information. Those amendments, which add new protections for job seekers whose histories include certain “non-convictions,” such as unsealed violations and unsealed non-criminal offenses, as well as for current employees facing pending criminal charges, take effect on July 29, 2021.
On July 15, 2021, the New York City Commission on Human Rights (“NYCCHR”) released detailed legal enforcement guidance (“Guidance”) to help employers comply with the expanded law. The Guidance represents the NYCCHR’s interpretation of the FCA and the amendments thereto. It is important for New York City employers in the private and public sectors to be familiar with and understand the FCA’s new rules.
Why? The Rationale for Piecemeal Background Reviews
The NYCCHR has taken the position that, prior to making a conditional job offer, employers must complete their assessment of all aspects of a candidate’s qualifications, including any Other Background Information, except for a medical examination and any review of information about, or potentially related to, a candidate’s criminal record, including driving records.
The NYCCHR explains that the need for this bifurcation is based on the concern that employers often revoke job offers as soon as they receive a background report containing any criminal information, blaming the revocation on factors other than the candidate’s criminal conviction history, without regard for the principles of the FCA.
The NYCCHR believes that bifurcation will isolate criminal information from any other information that might inform an employer’s decision during pre-employment screening, and if an employer revokes an offer after a conditional offer, it will only be because of the candidate’s criminal history. Accordingly, employers are now required to consider all Other Background Information before making a conditional offer, and to defer any criminal background checks until after such a conditional offer is made.
How? Steps NYC Employers Should Take to Ensure Compliance
1st Report: Pre-offer, includes all non-criminal information—i.e., Other Background Information. Any decision to stop considering a candidate based on the first report should be acted upon prior to moving on with the conditional offer stage. In such case, the employer must follow the “notice of intent to take adverse action”/“adverse action” process required under the federal FCRA.
2nd Report: After conditional offer, including driver’s records and any criminal information.
The NYCCHR recognizes that some consumer reporting agencies may not be able to provide two separate reports (or an employer may wish to receive this information together, in one report). While it is not unlawful for an employer to receive criminal information prior to making a conditional offer, it is unlawful to consider such information at that stage. In a case where criminal information is received prior to a job offer, the burden will be on the employer to prove that it did not consider any such criminal history at the pre-offer stage, if such history affects the employment decision.
Have you ever been convicted of a misdemeanor or felony? Answer “NO” if you received an adjournment in contemplation of dismissal (“ACD”) that has not been revoked and restored to the calendar for further prosecution or if your conviction: (a) was sealed, expunged, or reversed on appeal; (b) was for a violation, infraction, or other petty offense such as “disorderly conduct;” (c) resulted in a youthful offender or juvenile delinquency finding; or (d) if you withdrew your plea after completing a court program and were not convicted of a misdemeanor or felony.
As a reminder, employers using a third-party consumer reporting agency must follow the “notice of intent to take adverse action”/“adverse action” process required under the federal FCRA. Further, if a review of potential criminal history causes an employer to reconsider the conditional offer, before making a final determination, the employer must follow the Fair Chance Process (described below).
If a criminal background check reveals any information, such as a conviction history or pending case(s), causing the employer to consider rescinding the conditional job offer, then the employer must follow the Fair Chance Process with an evaluation using the relevant Fair Chance Factors.
An employer may rescind a conditional offer, or take other adverse action, only if a Fair Chance Analysis reasonably leads an employer to conclude that the individual’s criminal record either has a direct relationship to the job or poses an unreasonable risk to people or property. The Fair Chance Process requires these additional steps before taking any adverse action:
Employers should note that this Fair Chance Process is not limited to the hiring process but is also required if an employer learns that a current employee has a criminal record, causing the employer to consider termination or discipline of that employee.
The Fair Chance Factors
Employers must assume that candidates or employees with criminal records pose no risk, and then consider each of the appropriate Fair Chance Factors, depending on whether (i) the concern has arisen on the basis of (x) a prior conviction or (y) a pending case, and (ii) the criminal conduct occurred (x) pre-employment or (y) post-employment.
Article 23-A Factors: Relevant to Pre-Employment Conviction History
NYC Fair Chance Factors: Relevant to Pending Criminal Cases (Either Pre-Employment or Post-Employment) and Post-Employment Convictions
Intentional Misrepresentations of Pending Cases or Conviction Histories
The FCA continues to permit employers to take adverse action against applicants or employees who intentionally misrepresent their criminal history, but the law now requires the employer to:
If the applicant or employee credibly demonstrates that the misrepresentation was unintentional or the information provided was not a misrepresentation, the employer is required to perform the Fair Chance Process before taking any adverse action. Employers should note that if they wish to rely on a discrepancy (such as between the individual’s self-disclosure and the results of the background check) as the basis for adverse action against an applicant or employee, the burden is on the employer to credibly demonstrate that any such discrepancy is attributable to an intentional misrepresentation.
 Certain exceptions apply wherein the Fair Chance Act does not preclude criminal conviction inquiries. For example, an employer prohibited by local, state, or federal law from hiring people with certain convictions may claim an exemption. Further, employers in the financial services industry are exempt from the Fair Chance Process to the extent that it conflicts with industry-specific rules and regulations promulgated by a self-regulatory organization (“SRO”). This exemption, however, only applies to those positions regulated by SROs.
 Employers cannot consider “non-convictions” under the FCA. Non-convictions include, but are not limited to: (i) cases that resolved in a conviction for a non-criminal offense (as that term is defined by the law of another state), and (ii) convictions for the following non-exhaustive list of violations: trespass, disorderly conduct, failing to respond to an appearance ticket, loitering, harassment in the second degree, disorderly behavior, and loitering for the purposes of engaging in a prostitution offense.
 The NYCCHR also created and/or updated a Fact Sheet for Employees/Job Seekers, a Fact Sheet for Employers, and a Frequently Asked Questions document.
 Note that credit checks can be performed only under limited circumstances in New York City, pursuant to the Stop Credit Discrimination in Employment Act (“SCDEA”). See here and here for additional information about the SCDEA and the exemptions thereunder. Note that in connection with performing a credit check, an employer must identify the exemption under which the credit check is permissible, and must comply with the other requirements under the SCDEA.
 New York City banned pre-employment testing for marijuana and THC in 2019, as we reported here, and recently enacted state laws legalizing recreational marijuana include protections for employees who use cannabis while off duty, as we explained here.
 Article 23-A of the New York State Correction Law prohibits employers from unfairly discriminating against persons convicted of one or more criminal offenses and requires employers to evaluate qualified job seekers and current employees with conviction histories fairly and on a case-by-case basis. The statute lists eight factors that employers must consider concerning an employee’s or prospective employee’s previous criminal conviction, at Correct. Law § 753. Certificates of Relief from Disabilities pursuant to § 701 or for Good Conduct pursuant to § 703-a are also to be considered among the factors.
 See Guidance, at page 10.
 The NYCCHR has taken the position that, “[b]ecause it is often impracticable to separate criminal and non-criminal information contained in a driving abstract,” a candidate’s driving record can be reviewed along with the candidate’s criminal history, and need not be reviewed prior. See Guidance, at page 14.
 To the extent an employer performs the reference and educational checks itself, without utilizing the services of a third-party consumer reporting agency, it must perform these tasks and make any related decisions prior to making the conditional offer.
 The federal Fair Credit Reporting Act (“FCRA”) (15 USC §§1681 et seq.) and the New York State Fair Credit Reporting Act (NY GBL §§ 380 et seq.) require employers using a third-party consumer reporting agency to procure a background check on an individual to provide the individual with a disclosure and authorization form, and to obtain written authorization for the background check prior to its initiation.
 Id., at page 14.
 Federal guidance is available here.
 In such circumstances, NYCHRL does not prohibit employers from placing employees on paid or unpaid leave for a reasonable amount of time during the pendency of the Fair Chance Process. See page 21 of the Guidance.