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Impact of Criminal Background Checks on Employer Hiring Practices

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Recent criminal justice reforms are significantly influencing employer decision-making.

Clean-slate laws allow individuals to have their criminal records sealed or erased under specific conditions. Although these laws are relatively new, their impact on background screening processes is already noticeable. For instance, after Michigan’s clean-slate law took effect in April 2023, courts across the state faced substantial challenges processing record sealings, known in Michigan as records being “set aside.” This led to severe delays and various procedural roadblocks, such as limiting the look-back period for criminal record availability, capping the number of names processed daily, and even refusing to respond to criminal record requests. Consequently, employers and job candidates experienced prolonged background checks, causing frustration for all parties involved.

Current Impact on Employer Hiring Processes

The primary impact of clean-slate laws is felt by background screening providers, who must accurately report the current status of records. These providers generally do not report expunged or sealed records, in line with the Consumer Financial Protection Bureau’s advisory opinion from January 2024, which mandates that consumer reporting agencies must prevent the reporting of expunged, sealed, or legally restricted public records.

For employers, the two significant effects are:

  1. Potential delays in the background screening process, as seen in Michigan.
  2. Limitations on the criminal record information available.

For instance, California employers will face a notable change starting July 2024 when the state’s clean-slate law is implemented. This law allows misdemeanors to be automatically sealed one year after judgment and felonies four years after completed probation or supervision. However, this does not apply to registered sex offenders or those convicted of violent or serious felonies. Employers will need to revise their hiring policies and adjudication matrices to ensure workplace and consumer safety.

Benefits and Challenges for Employers

Theoretically, clean-slate laws will expunge eligible candidates’ criminal histories, meaning employers won’t receive this information during background checks. This raises concerns for employers operating in multiple states, as the laws vary widely. For example, a candidate in California might have a clean record for a misdemeanor committed a year ago, while a candidate in Minnesota would still show that misdemeanor on their report. This discrepancy becomes more pronounced with felonies, prompting employers to reassess the importance of certain criminal histories for specific roles.

States with Clean-Slate Laws

California and Michigan have enacted clean-slate laws, with California’s set to be implemented in July 2024. Connecticut is working through its implementation, starting with the erasure of certain cannabis convictions. Colorado’s law, also effective in July, allows for the automatic sealing of certain convictions after a set period, including petty offenses and misdemeanors after seven years and felonies after ten years.

New York’s Clean Slate Act, passed in November 2023, will seal eligible misdemeanor convictions after three years and felony convictions after eight years post-release. However, the New York State Office of Court Administration may take up to three years to implement the necessary processes.

Other states, such as Missouri and Vermont, are considering similar legislation. As more states adopt clean-slate laws, employers will face a complex landscape of varying regulations to navigate.

Industry-Specific Impacts

Clean-slate laws can significantly impact hiring practices across various industries. For positions involving sensitive populations, such as children or the elderly, employers may have concerns about the removal of specific records. However, all employers who utilize criminal background checks will need to adjust their policies to ensure they can still make informed hiring decisions.

Steps for Employers

To ensure compliance with clean-slate laws while maintaining workplace safety and recruiting top talent, employers should:

  1. Stay informed about broader criminal justice reforms and evolving clean-slate legislation.
  2. Reevaluate company policies on using criminal records in hiring decisions.
  3. Update adjudication matrices to reflect current laws and best practices.
  4. Ensure compliance with the Fair Credit Reporting Act and various state laws regulating background reports.

Employers should also consider whether candidates are being denied for convictions that may not be job-related and whether their adjudication matrices need updating. This proactive approach will help employers navigate the complexities of clean-slate laws and continue to hire qualified candidates effectively.

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