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—Overview—

On August 11, 2014, Governor Chris Christie signed the “Opportunity to Compete Act,” P.L. 2014, c. 32, which regulates the consideration of criminal history by New Jersey employers with 15 or more employees in making hiring decisions.  This Fast Facts attempts to help employers understand its application.

—Background—

For years the federal government has argued that adverse employment decisions made based on a criminal record can be a form of race discrimination since some racial groups are convicted disproportionately to other groups, and barring people from employment based on their conviction records may have a negative impact on those races.

In 2012, the US Equal Employment Opportunity Commission (EEOC) which enforces the Civil Rights Act of 1964 (specifically Title VII) published a guidance document. It describes the circumstances under which an employer’s practices conducting criminal background checks may be discriminatory under federal law. (Please see NJBIA’s Fast Facts on the EEOC’s Guidance on Criminal Background Checks for more information)

Following the federal government’s guidance, many states like Pennsylvania and New York, and various localities like Newark and Atlantic City, enacted policies addressing the hiring, firing and promotion of ex-offenders to ensure that these applicants are not being discriminated against and have the opportunity to demonstrate their qualifications for particular positions.

With the enactment of the “Opportunity to Compete Act,” (P.L. 2014, c.32) New Jersey became the seventh state to regulate the consideration of criminal history statewide by private employers.

Two years prior to the passage of the legislation, NJBIA led a coalition which was able to get a number of serious concerns addressed, including making sure employers do not have to: offer conditional employment to ask about criminal history; respond in writing to applicants with criminal histories who are turned down for jobs; defend against lawsuits; and, follow individual municipal standards concerning the consideration of criminal history.  NJBIA was also able to get an exemption for very small employers.

This Fast Facts provides general information to assist employers with 15 or more employees in complying with the “Opportunity to Compete Act,” also known as “Ban the Box.”

The phrase “Ban the Box” was derived from removing the box and the corresponding question on employment applications that required applicants to disclose their criminal backgrounds.  As discussed below, one of the most immediate steps affected employers must take is removing any questions which inquire about expunged or current criminal history from initial job applications.

—Employers Covered Under the Act—

 Are all New Jersey employers covered under the “Opportunity to Compete Act?” 

 No. The act only applies to organizations located in “whole or substantial part” within New Jersey with 15 or more employees over 20 calendar weeks. This includes all people, companies, corporations, firms, labor groups, or associations which do business, employ workers, and take applications for employment in New Jersey. Interns and apprentices are considered employees for purposes of the act; however, independent contractors and trustees are not.  Municipalities, counties (and their instrumentalities) as well as employment agencies are covered.

The 15 or more employee threshold applies to companies regardless of whether employees work inside or outside of New Jersey.

When did the act take effect?

The Act took effect on March 1, 2015, with amendments made in 2018 to specifically address expunged records.

 When can covered employers consider criminal history under the “Opportunity to Compete Act?”

Most New Jersey employers must wait until after the first interview to ask about criminal history. Specifically, the law states that an employer cannot make an oral or written inquiry into an applicant’s criminal record (including expunged criminal history) until after the initial employment application process, “ending when an employer has conducted a first interview.”  To provide employers with some flexibility, the interview can be in person or “by any other means” such as over the telephone.

Are any companies, industries, or agencies exempted from the act? Can these groups still inquire about criminal history before the first interview?

 Yes. The following are exempted:

  • Federal employees and federal departments, agencies, boards, or commissions;
  • Law enforcement, corrections, the judiciary, homeland security or emergency management agencies;
  • Employers actively seeking to employ those who have criminal records (for instance, employers applying for federal grants to hire ex-offenders);
  • Positions where a criminal history background check is required by another law, rule, or regulation;
  • Positions where an arrest or conviction by the person for one or more crimes or offenses would or may preclude the person from holding the job in question; and,
  • Instances where any law, rule, or regulation restricts an employer’s ability to engage in specified business activities based on the criminal records of its employees.

If a background check reveals prior convictions that have been expunged or erased, can they still be considered after a first interview?

Generally not. The law provides that an employer cannot consider these records unless doing so is required by another law, rule, or regulation.

Suppose an applicant voluntarily discloses that they have been convicted of a crime in their initial application, for instance, in a cover letter?

If an applicant voluntarily discloses any information regarding their criminal record (either orally or in writing), then the employer may further inquire about their criminal history prior to the first interview.

— Employment Applications and Job Postings —

Can covered New Jersey employers still ask about criminal history on initial job applications?

An employer cannot require an applicant to complete an initial job application that asks about criminal history (including asking the applicant to check a box if they have been convicted of a crime) until after the first interview, hence the moniker “Ban the Box.” This includes expunged criminal history. Following the first interview, the employer is free to provide an application which inquires about criminal history, but not before that time.

Multi-state employers are permitted (by regulation) to use one national application with a criminal history question as long as the applicant for a position which is located in whole or in part in New Jersey is instructed not to answer this question.

Multi-state employers should also be aware that although there is no firm federal ban against requiring applicants to disclose criminal convictions up front, the federal EEOC recommends that employers not ask about convictions on initial applications as a best practice. The rationale is that an employer is more likely to objectively assess the relevance of an applicant’s conviction after learning about their qualifications and experience. In addition, the laws in other states may provide their own parameters on the process.

Can covered New Jersey employers still state on job postings that applicants will be subject to criminal background checks?

Unless they are exempted (as discussed in the previous section), the “Opportunity to Compete Act” prohibits covered employers from publishing advertisements stating that they will not consider applicants with criminal histories. However, employers are not prohibited from stating that applicants must submit to a background check as a condition of employment. The law also explicitly allows employers to continue to publish the qualifications required for employment in a particular position such as: the holding of a current and valid professional or occupational license, certificate, registration, permit or other credential, or a minimum level of education, training or professional, occupational, or field experience.

—Violations and Liability under the Act—

What are the penalties employers may face for violating the law?

The “Opportunity to Compete Act” does not allow for a private cause of action filed by employees or applicants.  Instead, the only remedy under the act is a civil penalty in an amount not to exceed $1,000 for the first violation, $5,000 for the second violation, and $10,000 for each subsequent violation, collectible by the Commissioner of Labor and Workforce Development in a summary proceeding.

Could an employer face liability if they wait until after a first interview to ask about criminal history, but later decide not to hire an ex-offender? 

No. Although this matter has not been litigated by the courts, the “Opportunity to Compete Act”   contains strong language to protect employers that decide not to hire an applicant with a criminal history. Further, the act explicitly shields employers from lawsuits where a person attempts to sue an employer under other laws utilizing evidence of a violation of the “Opportunity to Compete Act.”

—Preemption of State Law—

Newark and Atlantic City have their own ordinances which impose different provisions for businesses operating within their borders. Which standards should be followed?

The “Opportunity to Compete Act” contains strong preemption language which bars New Jersey municipalities from adopting ordinances, rules, resolutions or regulations regarding criminal histories in the employment process.  That means that it is the standard and supersedes requirements imposed by cities like Newark and Atlantic City.

—For more information—

If you need additional information, please contact NJBIA’s Member Action Center at 1-800-499-4419, ext. 3 or member411@njbia.org

 

This information should not be construed as constituting specific legal advice.  It is intended to provide general information about this subject and general compliance strategies.  For specific legal advice, NJBIA strongly recommends members consult with their attorney.