On August 18, 2020, North Carolina Governor Roy Cooper signed Executive Order 158 to implement "fair-chance" or “Ban the Box” policies at state agencies “to increase employment opportunities for people with criminal records.” North Carolina joins thirty-five states, the District of Columbia, and over 150 municipalities and counties who have enacted “ban-the-box” or “fair-chance” laws, which preclude employers from including questions about criminal history on employment applications. These fair chance or “Ban the Box” policies aim to reduce employment barriers for people with criminal records. In many of these states, ban-the-box statutes apply only to public employers, but 13 states (including some of the most highly populated, such as California and Illinois) and 18 municipalities and counties have applied them to most or all private employers as well. These laws have gained substantial bipartisan support, and more states and localities (and possibly the federal government) will likely enact ban-the-box statutes in the coming months and years. Executive Order 158 addresses North Carolina state agencies, but the Order directs the North Carolina Department of Administration to conduct a feasibility study to exam implementing fair chance and “Ban the Box” policies with businesses that contract with the state. As a result, employers need to understand what these laws require—and what they do not.
What Is Required?
Ban-the-box laws prevent employers from including questions about a prospective employee's criminal history on their initial employment application. The idea is to prevent applicants from being automatically eliminated from consideration by employers early in the screening process. Delaying questions about criminal history increases the chances that employers will consider all relevant factors. Some factors include the amount of time that has passed since the applicant's conviction, whether the conviction was for a crime that could be related to the applicant's potential job duties, and whether there is evidence of mitigating circumstances or rehabilitation. The precise requirements of these laws vary, with some allowing employers to inquire about criminal history after an initial interview and others only permitting the inquiry after a conditional job offer has been extended.
Executive Order 158 is expected to affect “more than 1.7 million people in North Carolina who have criminal records.” While the Order is for state agencies, state, county and municipal government agencies, and private employer are also encouraged to implement the changes. The Order will:
- Remove criminal history questions from the application for state employment and prohibit inquiries into an individual's criminal history during the initial stages of the hiring process;
- Prohibit the consideration of expunged or pardoned convictions, charges unrelated to the underlying employment matter, arrests not resulting in a conviction, dismissed or ruled not guilty, unless the hiring is prohibited by law;
- Require that necessary background checks not be conducted before the initial job interview for the candidate;
- Require state agencies to provide a reasonable opportunity for applicants to explain the circumstances surrounding relevant conviction(s) and provide proof of rehabilitation, including a Certificate of Relief; and
- Require the North Carolina Department of Administration to conduct a study on the feasibility of implementing a fair chance hiring policy that would extend to businesses that contract with the state.
What Is Not Required?
Ban-the-Box statutes do not preclude employers from making inquiries about job applicants' criminal history or from deciding not to hire a candidate based on that candidate's criminal history, which could potentially result in the hiring of dangerous criminals. Instead, they delay background checks until later in the hiring process.
Considerations for Small Businesses
- Ban-the-box laws may require owners and managers of small businesses to spend more time during the hiring process than was required before the enactment of these laws. There is also the possibility that a small business owner could spend substantial time conducting one or more interviews with a job candidate who is ultimately deemed unsuitable because of the applicant's criminal history. For example, a jewelry store owner may not want to hire an applicant who has multiple recent robbery convictions. However, in light of the low unemployment rate and the related difficulty in finding well-qualified employees, the additional investment of time may pay off. A 40-year-old candidate who made a mistake at 18 years old but who has been a pillar in the community for decades may turn out to be an excellent employee.
- However, small businesses should not wholly neglect the background check process. Employers still need to conduct a thorough background check to avoid claims of negligent hiring if, for example, a new hire with a criminal history commits a similar crime at work, causing harm to other employees or to customers. If a business decides to hire a candidate with a criminal history, it is necessary to evaluate and document the nature of the applicant's crime, whether it is relevant to the type of work the applicant will be doing, when it was committed, and whether the applicant has been rehabilitated. For state agencies, Executive Order 158 “prohibit inquiries into an individual's criminal history during the initial stages of the hiring process.”
- If a small business decides not to hire an applicant based upon his or her criminal history, it is also essential to document the reasons for that decision. The Equal Employment Opportunity Commission (EEOC) provided guidance for employers to ensure that the consideration of arrest and conviction records in employment decisions does not violate the Civil Rights Act of 1964. Employers are prohibited under the Civil Rights Act from treating information about criminal history differently for applicants based upon their race or national origin or from adopting a neutral policy that has a disparate impact upon some individuals who are protected under the Civil Rights Act. According to EEOC guidance, an employer generally can comply with the Civil Rights Act by developing a targeted screening process that considers the nature of the crime, the time elapsed since the crime was committed, and the nature of the job, and an individualized assessment for any candidate identified by the screening process.
- Businesses that operate in more than one jurisdiction may need to comply with different requirements. For example, the state of North Carolina is just enacted its own “fair-chance” law; however, the city of Charlotte signed its “Ban the Box” law in 2014 and Mecklenburg County Commissioners voted to “Ban the Box” in 2016.
We Can Help
If you are confused about your Executive Order 158 or legal obligations in the hiring process, we can provide guidance to help ensure that your procedures comply with state and federal law. We can also help you develop a system for documenting the reasons underlying your hiring decisions. Please call us today to set up an appointment to discuss these or any other employment-related concerns. Call (704) 230-0466 or CLICK HERE to schedule a meeting with an experienced business attorney who can help you. The Brewington Law Firm, PLLC meets by telephone conference, in office or web conference (Zoom/Google Duo/Microsoft Teams).