Most are familiar with the two-step process for employment background check reports required by the New York City Fair Chance Act (FCA). The first step is performing searches of all relevant records, excluding all records disclosing criminal history information.
In September 2022, the California Fair Employment and Housing Act (FEHA) was amended to make it unlawful to discriminate against an applicant or employee who has engaged in the lawful use of marijuana outside of work. When the new law (known as “AB 1288”) takes effect on January 1, 2024, with limited exceptions, California employers will have to accommodate workers who engage in the off-duty use of marijuana, regardless of whether the use is for medical purposes.
AB 1288 is not a wholesale ban on employers restricting employees’ marijuana use or testing for it. Rather, the new law focuses on protecting against discrimination based on the use of cannabis outside of work hours and the workplace.
The new law does not ban drug testing – nor even completely ban testing for marijuana use. AB 1288 expressly allows an employer to rely on “scientifically valid pre-employment drug screening conducted through methods that do not screen for nonpsychoactive cannabis metabolites.” Such testing should only identify any current impairment or active THC levels. AB 1288 allows an employer to consider a positive result on such testing and to act on it.
AB 1288 further does not permit an employee “to possess, to be impaired by, or to use, cannabis on the job.” Nor does it affect “the rights and obligations of an employer to maintain a drug- and alcohol-free workplace,” as specified in Health and Safety Code section 11362.45, “or any other rights or obligations of an employer specified by federal law or regulation.”
In addition, AB 1288 does not apply to an employee “in the building and construction trades,” a term that the legislation did not define. AB 1288 does not apply to positions requiring a federal government background check or security clearance. It also “does not preempt state or federal laws requiring applicants or employees to be tested for controlled substances, including laws and regulations requiring applicants or employees to be tested, or the manner in which they are tested, as a condition of employment, receiving federal funding or federal licensing-related benefits, or entering into a federal contract.”
Employers may still conduct drug testing after AB 1288 becomes effective. California law generally allows drug testing of applicants without suspicion but requires reasonable suspicion to test current employees. If AB 1288 applies, employers who conduct drug testing must use tests that detect current impairment or active THC levels rather than nonpsychoactive cannabis metabolites.
Employers should consider updating or creating a written drug testing policy that clearly states the employer (1) does not discriminate based on an individual’s off-the-clock cannabis use away from the workplace and (2) does not test for nonpsychoactive cannabis metabolites.
When it comes to criminal records, the federal Fair Credit Reporting Act (FCRA) does not place any time limit on reporting criminal convictions. No matter how long ago the conviction occurred, it is reportable under the FCRA. Most states follow this rule, but several states, including California, do not.
California limits reporting criminal records involving the conviction of a crime from the “date of disposition, release, or parole” that predate the report by more than seven years. In cases where the subject was paroled after serving time in prison, it is essential to correctly determine the “date of parole” for purposes of applying the seven-year rule. Is the “date of parole” when the subject is released from prison and starts parole or the date that parole ends? A recent opinion by the California Court of Appeal resolved that question.
The California state court case is pending in the Orange County Superior Court dealing with the issue of whether a consumer reporting agency (CRA) is prohibited from disclosing a criminal conviction to a prospective employer if it has been more than seven years since the date of parole. In 2011, the plaintiff was convicted, released from prison, and placed on parole. In 2020, Amazon offered the plaintiff a job in Sacramento. The defendant, a CRA for Amazon, provided a background report to Amazon revealing the plaintiff’s criminal conviction. Amazon then withdrew its job offer. Because the plaintiff’s 2011 conviction predated the 2020 report by more than seven years, he filed a complaint alleging the CRA violated California’s seven-year rule.
The CRA challenged the plaintiff’s complaint by asserting that his parole ended in 2014, which predated the 2020 report by less than seven years, arguing that under California law, “the term ‘parole’ refers to the end of the parole period,” and it could not be liable to the plaintiff for violating the seven-year rule. However, the Superior Court disagreed with the CRA’s position and stated that under California law, the “date of parole” refers to the start date of parole, not the end date. The CRA appealed the court’s decision but to no avail. The Court of Appeal affirmed the Superior Court’s decision that the “date of parole” refers to the start date. The plaintiff can continue pursuing his complaint against the CRA.
Temporary employees. For some companies, they are a great option. Temps can provide needed help during a busy season, fill a short-term gap for an employee on an extended leave or provide expertise for a specific project.
But there are several considerations to keep in mind when hiring temporary workers.
Temps are generally hired for a specified period of time, typically not more than a one-year period and are entitled to many of the same legal protections as other employees, such as workers’ compensation laws, requirements under the federal Occupational Safety and Health Act and the rights provided by Title VII and other anti-discrimination statutes.
Employers are obligated to pay income, Social Security and Medicare taxes for temporary employees; such workers may also be eligible for health care or retirement benefits, depending on the circumstances.
Companies can hire temporary workers on their own or through an agency. Working with an agency can alleviate an employer’s burden, as the agency will typically withhold the required taxes and pay the worker’s wages. However, employers could be held liable as a “joint employer” if the agency fails to comply with legal requirements. To protect themselves, employers should engage in due diligence before working with an agency, carefully review staffing agency contracts and require proof of insurance.
Misclassification of workers presents a host of legal problems for employers. Regulators – from state Attorneys General to the federal Department of Labor – have targeted misclassification in major lawsuits across the country, some resulting in multi-million settlements. The Internal Revenue Service is also interested in the issue and entitled to retroactive tax payments if the agency determines the employer failed to pay the requisite taxes.
Workers themselves can also bring suit, alleging that they were actually treated like an employee despite being labeled a temp.
In 2000, Microsoft paid $97 million to settle a class action brought by 10,000 temporary workers who sued after working for the company for several years, in some cases sitting right next to employees. The self-described “permatemps” argued the company hired them through temp agencies to avoid paying them health benefits, pensions and stock options. They told the court that they were actually permanent employees and therefore deserved the same benefits.
Most problems occur when a temporary position begins to look permanent. Maybe the worker turned out to be an invaluable resource, the employee who was supposed to return to work never did or the project drags on unexpectedly.
In a lawsuit, regulators or the court will consider the scope of the employment relationship in order to determine if the individual is a temporary worker or employee, with factors such as the level of control the employer exercises over the worker, whether the company is the worker’s sole source of income, if the work is flexible (in location and hours) and if the worker uses the company’s equipment.
To avoid facing liability, employers should strive to treat temporary workers like temps. Keep the employment period defined (and typically less than one year), do not conduct performance reviews or pay bonuses and consider not inviting temps to company functions, such as the summer picnic or holiday party.
On July 12, 2022, the Consumer Financial Protection Bureau (CFPB) issued an advisory opinion related to the Fair Credit Reporting Act (FCRA)
Although nearly all state laws include criminal offense levels divided into two types – felonies and misdemeanors – there are many states with offense levels peculiar to their state law. One such peculiarity is Minnesota’s petty misdemeanor offense level.
In Minnesota, a petty misdemeanor is the lowest level of offense. Many but not all Minnesota traffic violations are petty misdemeanors. The unique aspect of a petty misdemeanor is that it is not considered a crime. (See for yourself here: Minn. Stat. § 609.02, subd. 4a or the accompanying attachment.) A petty misdemeanor does not carry a jail sentence but can result in a fine of up to $300.
For employment-purpose reports, the federal Fair Credit Reporting Act (FCRA) and its state law counterparts are the laws that most often deal with when determining whether certain information is or isn’t reportable. However, federal laws prohibiting workplace discrimination can also limit what information can be included in these reports. This issue can arise when civil lawsuits are located in which a search subject has sued a former employer.
Although there are several types of federal laws dealing with workplace discrimination, taken together, these laws make it illegal to discriminate against someone (applicant or employee) because of that person’s race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information. It is also illegal to retaliate against a person because they complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.
Providing any such information to a prospective employer in a background screening report could be a violation of anti-discrimination laws which are typically enforced by the U.S. Equal Employment Opportunity Commission (EEOC).
For California employers concerned about hiring sex offenders, there are a few important points to keep in mind.
An employer has a duty to keep the workplace free of sexual harassment and other forms of discrimination under state law. Under the California Fair Employment and Housing Act (FEHA), an employer can face significant liability if it knowingly employs a sex offender and fails to take actions to protect its other employees from unlawful behavior by that person.
To avoid this problem, employers would like to know if they are hiring a registered sex offender. But how can they find out?
Since 2005, the state has operated a Megan’s Law website with a database to obtain access to the state’s list of more than 100,000 registered sex offenders. Created to help state residents better protect their families by being able to search for an individual registrant or by geographic location, the site (https://www.meganslaw.ca.gov/Default.aspx) contains the sex offender’s name, aliases, age, gender, race, address, physical description and, in some cases, a photograph.
While the site would appear to be a boon for employers, state law expressly forbids use of the state’s sex offender registry information for employment purposes. California Penal Code section 209.46(l)(2)(E) prohibits the use of information disclosed on the website for purposes relating to health insurance, insurance, loans, credit, education, housing, and employment, among other uses.
Statutory exceptions provide for use “to protect a person at risk,” a term not defined by the Penal Code, as well as for employers required by law or authorized to request criminal history from the California Department of Justice. Examples of businesses that meet this standard may include child care centers, financial institutions, and governmental agencies.
An employer who runs afoul of the Penal Code’s prohibition can face actual and exemplary damages, attorneys’ fees, and a civil fine. Legislative history explains that the website attempts to protect the public while not inflicting additional punishment on registrants.
For employers trying to walk the fine line of protecting other employees and third parties, such as customers, from potential sex offender registrant employees while not violating the Penal Code, two alternate avenues exist to try to find out information about a sex offender: conviction records and employee/applicant self-disclosure.
Following applicable state and federal law, employers can conduct a criminal background check on applicants and employees and learn of a sex offense conviction. (However, convictions past the seven-year cut-off date in California may not appear on a background check report while the individual may still appear in the sex offender registry). An applicant or employee may also self-disclose a conviction.
Providing another wrinkle for California employers, the state’s Fair Chance Act took effect on January 1, 2018, mandating that employers with five or more employees must wait until after a conditional offer of employment has been made to ask any questions about criminal history. This includes inquiries about convictions, running a background check, or other efforts to find out about an applicant’s criminal past.
If the employer decides not to hire the applicant, it must conduct an individualized assessment of the conviction at issue to evaluate whether it has a “direct and adverse relationship with the specific duties of the job that justify denying the applicant the position.” Other legal requirements, based on both state and federal law, must also be satisfied if an employer takes an adverse action on the basis of the background check (see our prior blog post (https://www.scherzer.com/reminder-to-california-employers-about-requirements-when-taking-adverse-action-based-on-a-criminal-record/) for more details).
What if an employer learns that an employee is a registered sex offender from another employee’s perusal of the Megan’s Law website? This situation could trigger liability under section 290.46 and employers should be careful to take action only after evaluating any potential risk the sex offender employee may pose to coworkers or customers, considering all the facts and circumstances.
Under the Fair Credit Reporting Act (FCRA), criminal convictions can appear in a background report regardless of when they occurred. It does not matter how old the conviction is. However, some states have passed their own legislation similar to the FCRA that does place restrictions on reporting criminal convictions.
Which states restrict reporting on convictions?
California, Colorado, Hawaii, Kansas, Maryland, Massachusetts, Montana, New Mexico, New York, New Hampshire, Texas, and Washington all have laws that limit the scope of reporting criminal convictions to seven years. In Hawaii, the seven-year limit is for felonies only; the reporting of misdemeanors is limited to five years. The District of Columbia limits the reporting of criminal convictions to 10 years.
All states not listed above follow the FCRA rule that criminal convictions can appear in a background report regardless of when they occurred.
The Salary Exception States
Seven of the states listed above allow an exception to their rule of limiting reporting criminal convictions to seven years. The exception is based on the salary the candidate is expected to make. If the salary exceeds a certain threshold, the seven-year limitation does not apply, and criminal convictions can appear in the candidate’s background report regardless of when they occurred.
|Salary Exception States
|Candidate’s Potential Salary Threshold
Almost everyone has heard the terms DWI and DUI, and many think that both are interchangeable. New York law uses a third term – DWAI. None of these terms are interchangeable, and New York law does not use the term DUI or driving under the influence.
In New York, there are two main “drunk driving offenses” – DWI and DWAI. DWI stands for “driving while intoxicated,” while DWAI stands for “driving while ability impaired.” A DWI means that the driver is legally intoxicated, with a blood alcohol content of at least 0.08 percent. A DWAI involving alcohol means the driver’s blood alcohol content is between 0.05 and 0.07 percent.
Although the penalties for a New York DWI and DWAI are nearly the same, there is a big difference between them regarding the offense level. A DWI conviction is a criminal offense, while a DWAI conviction is a violation – which in New York is a non-criminal offense.
The practical effect of this distinction is that a DWAI conviction will appear on a New York driving record (usually stated as “driving while impaired”), but the court conviction will not appear on a New York Statewide CHRS report because these reports do not include non-criminal offenses such as violations.
This communication is for general informational purposes only and does not constitute legal advice. No recipient should act, or refrain from acting, based on any information provided here without advice from a qualified attorney licensed in the applicable jurisdiction.
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