Changes Ahead for the NYC Fair Chance Act

Last month we discussed New York City’s Fair Chance Act (FCA). It places restrictions on how NYC employers can use certain criminal history information. The FCA addresses employment ads, asking job applicants about criminal history, and adverse action restrictions.

On January 10, 2021, NYC enacted several amendments to the FCA. The updates expand the scope of NYC’s ban the box law and will go into effect this summer.

Establishing Fair Chance Factors

The amendments establish NYC FCA-specific “relevant fair chance factors” that an employer is required to consider in certain circumstances.

For arrests or criminal accusations pending at the time of application for employment, and arrests or convictions that occurred during employment, these factors include:

• The city’s policy to overcome stigma toward and unnecessary exclusion of persons with criminal justice involvement.
• The specific duties and responsibilities related to the job.
• If the criminal history impacts the applicant or employee’s fitness or ability to perform any of the job duties or responsibilities.
• Whether the applicant or employee was 25 years of age or younger at the time of a criminal offense.
• The seriousness of the offense.
• The legitimate interest of the employer in protecting property and the safety and welfare of others.
• Any additional information about the applicant or employee’s rehabilitation or good conduct, including a history of good performance and conduct on the job or in the community.

For arrests and convictions that occurred before employment, other than arrests or criminal accusations pending at the time of the employment application, employers should consider state law factors.

Considering Different Records

The new amendments to the FCA aim to reduce uncertainty about what records employers may consider. This more granular breakout of criminal history helps employers know what can and cannot be considered.

For employment purposes, employers cannot make any inquiry about, deny employment to an applicant, or take adverse action against any employee based on an arrest of or criminal accusation against the applicant or employee when the inquiry, employment denial or adverse action is in violation of state law.

In addition to this restriction, employers, with certain exceptions, cannot inquire about, deny employment or take adverse action based on:

• Convictions of violations as defined by state law
• Convictions of non-criminal offenses, as defined by a law of another state
• Arrests or criminal accusations that resulted in a violation or non-criminal offense conviction as outlined above

Changes Limiting Adverse Action

The updates to NYC’s FCA expand restrictions on when employers can take adverse action against applicants and employees.

With some exceptions, the amendments make it illegal for an employer to take adverse action by reason of either an applicant or employee’s pending arrests or criminal accusations or criminal convictions an employee obtains during employment, or by finding a lack of “good moral character” due to an applicant’s or employee’s pending arrests or criminal accusations or convictions an employee obtains during employment, unless, after considering the relevant fair chance factors:

• It’s determined that there is a direct relationship between the alleged wrongdoing or conviction and the employment sought or held.
• It’s determined the applicant or employee would create an unreasonable risk to property or the safety or welfare of others.

An employer can take adverse action if the applicant or employee intentionally misrepresented their arrest or conviction history, provided that the adverse action is not based on information that the employee is not required to divulge based on city or state law. As to such adverse action, the employer must provide the applicant or employee with copies of documents the employer used to determine that there was an intentional misrepresentation and allow a reasonable time to respond.

Fair Chance Process Expansion

The new amendments also expand the “Fair Chance Process.” This formal process outlines the steps an employer must take before taking adverse action. Previously, the process only applied to new job applicants. Employers must now engage in the Fair Chance Process when taking adverse action against both new applicants and current employees.

During the Fair Chance Process, employers, with certain exceptions, must now request information relating to the relevant fair chance factors from the applicant or employee.

On top of those changes, employers must now allow job applicants a minimum of five business days to respond before they take adverse action.  As before, the employer must hold the position open for the applicant during the response period.

The amendments to the current Act take effect on July 29, 2021.  Employers may wish to discuss the NYC Fair Chance Act amendments with their legal counsel to make sure they stay in compliance with the law.