The City Commission Clarifies the ​“Fair Chance Act”

As previously reported, among the legislation passed this year under Mayor DeBlasio, New York City passed the “Fair Chance Act” (“FCA”), which severely restricts an employer’s ability to conduct criminal background checks on prospective employees. We first wrote about the Act when New York City banned the use of credit background checks, becoming the twelfth jurisdiction in the country to do so. With the Fair Chance Act going into effect on October 27^th, the City Commission has come out with some guidance.

Briefly, under the FCA, an employer may only do a background check after a conditional offer of employment is made. If the offer is rescinded based on the results of the check, the employer must give the applicant the following: a copy of Article 23 of the Corrections Law (which already restricts job denials based on a conviction), a copy of the report, and a copy of the “employer’s analysis and the factors used to make the decision.” The job has to be held open for 3 days, to allow the applicant time to respond or offer some explanation or other information.

Predictably, the Commission is ”expansive” in its interpretation of the FCA. Among the more notable clarifications issued by the City Commission, employers should note that:

• An employer may use public sources (such as Google) to do a reference check, as long as the intent is not to obtain a criminal history (in other words, don’t search for “criminal record”).

• It will be considered a violation of the law to state in an advertisement that background or criminal checks will be conducted; but a statement that ‘reference checks’ will be conducted will be lawful.

• An employer will not lose the right to take action against an applicant who lies on an application, as long as it does not inquire of the criminal history until after there has been conditional offer.

• Temporary agencies will not have to conduct the full Article 23 analysis for each temporary job; however they may not honor a client request for ‘no felons’, unless this is required by federal or state law.

As a general matter, the law does exempt any position where federal, state or local law require a criminal background check, which includes the securities laws.

Employers will be allowed to offer comment on the effect of the FCA in 2016, and the City Commission has promised to offer training and to provide answers to “Frequently Asked Questions” on its website.

Employers will be well advised to be careful to comply with the FCA and to be cautious in making any adverse decision based on a conviction. Even before the Act was passed, the City Commission and the NY State Division have been aggressive in their pursuit of employers for violations of Article 23 of the Correction Law. If an employer rejects an applicant based on a conviction, the agencies expect to see evidence that all six factors listed in the Correction Law were considered, and some analysis as to why – based on those factors – the applicant was rejected. Now with the passage of the FCA, that enforcement will be stepped up.