December 21, 2017    |    By

Another new year is just around the corner and you know what that means…. NEW LAWS!! (Did you think I was going to say New Year’s celebrations?) While most of the country is celebrating the start of 2018, California business owners will spend the end of the year preparing and planning for the new regulations that have to be implemented. Every year there are new laws related to employment for businesses to worry and wonder about. 2018 is no exception.

As with every other year, the State of California has provided us with no shortage of new reading material to absorb, sort and apply. In addition to the usual litany of minimum wage increases, changes to leave laws, and additional required trainings, this coming year we have two major changes that will affect all employers, regardless of size, in how they interview and hire.

California A.B. 168

A.B. 168 bars employers from using or seeking a job applicant’s salary history. The law prohibits employers, both public and private, from using “salary history information” as a factor in determining whether to offer employment and what salary to offer to an applicant. Salary history information includes information about salary, compensation, and benefits. The law also requires employers to provide the pay scale for a position upon an applicant’s reasonable request.

If an applicant voluntarily and without prompting discloses his or her salary information to a prospective employer, the law does not prevent the employer from considering or relying on that information to set the salary for the applicant. However, it cannot be used in determining whether or not to hire the individual.

What You Need To Do To Prepare:

  • Update/revise job applications and hiring forms to remove questions asking salary history
  • Update/revise applicable hiring/interviewing/screening policies, procedures and guidelines to clarify that you can’t ask salary history and will not use salary history unless otherwise permitted by law
  • Establish procedures to ensure delivery of pay scale information upon an applicant’s request
  • Provide training to all personnel involved in the hiring process to ensure they understand the restrictions and obligations of the new law

California A.B. 1008

A.B. 1008 amends the Fair Employment and Housing Act and only a handful of positions are exempt from its coverage. The new law makes it unlawful for employers with five or more employees to:

  • Include on any application for employment, before the employer makes a conditional offer of employment to the applicant, any question that seeks the disclosure of an applicant’s conviction history
  • Inquire into or consider an applicant’s conviction history before the applicant receives a conditional offer of employment
  • Consider, distribute, or disseminate information related to arrests that did not result in convictions, diversion program participation, and/or convictions that were sealed, dismissed, expunged or statutorily eradicated

Employers may only consider an applicant’s conviction history after making a conditional offer of employment. If an employer intends to deny hire solely or in part because of conviction history, the employer must conduct an individualized assessment to determine whether that history has a direct and adverse relationship with the specific duties of the job. When making the individualized assessment, the employer must consider the nature and gravity of the offense or conduct, the time that has passed since the date of the offense or conduct and completion of any sentence, and the nature of the position sought.

If the individualized assessment leads to a preliminary decision that the conviction history disqualifies the candidate, the employer must follow a specific procedure referred to as the “fair chance” process. The “fair chance” process includes:

  • First, the employer must provide written notice to the applicant. The notice must identify the conviction on which the preliminary decision is based on, include a copy of the background check, and explain the applicant’s right to respond to the notice within five business days. The notice must explain the applicant’s right to submit evidence challenging the accuracy of the conviction record, or evidence of rehabilitation, mitigating circumstances or both. Employers cannot make final decisions based on conviction history during the five business day period.
  • Second, if the applicant notifies the employer in writing that the applicant is disputing the background check results and is taking steps to obtain evidence to do so, the employer must provide the applicant an additional five business days to respond. The employer must take into consideration any additional evidence the applicant provides in response before making a final decision.

If after receiving the response from the applicant the employer makes a final decision to deny employment based on conviction history, they must again notify the applicant in writing. This final notification must include: the final denial; information about any existing procedure to challenge the decision; and the right to file a complaint with the Department of Fair Employment and Housing.

All Businesses With More Than Five Employees Should Do The Following To Prepare:

  • Remove questions which seek criminal conviction information from all hard copy and electronic employment applications
  • Review interview guidelines and hiring processes to ensure compliance with the law
  • Train managers, hiring, and recruiting personnel on the new law so they know that they cannot ask or rely on conviction history before a conditional offer of employment is made
  • Adopt procedures to comply with the individualized assessment and “fair chance” process requirements
  • Review and revise, as necessary, “adverse action” notifications to comply with federal and California fair credit reporting law requirements

This is obviously a fundamental change to the hiring process for most businesses. It will extend the length of time it takes to find the right candidate and complete the hiring process. Businesses will want to allow more time when hiring for time sensitive positions and it will be critical to make sure your staff is clear on what is allowed and what is not.

In addition to these two major changes, there are also changes to immigration enforcement, parental leave, retaliation and whistleblower protection, anti-harassment training, minimum wage, and more.

If, like many other businesses, you’re throwing your hands up in frustration and wondering how you will manage all of this and your business, now may be a good time to look into the options available to you to outsource the management of your HR. Professional Employer Organizations, commonly referred to as PEOs, are a great way to make sure your business is compliant with all the law changes, have access to experts in the varied fields of HR, and give yourself some peace of mind. PEOs are becoming more common as the go-to partner for businesses who are increasingly struggling to operate their business in such a highly regulated environment.

While this can seem overwhelming for employers, it’s important to remember that this year is no different than any other and we have all faced these drastic law changes before. And survived. Possibly with the addition of a few more gray hairs but survived.

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This blog post is intended for informational purposes only and does not constitute legal advice. No attorney-client relationship is created between the author and reader of this blog post, and its content should not be relied upon as legal advice. Readers are urged to consult legal counsel when seeking legal advice.

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