Photo by PBS Effective Jan. 1, 2018, employers will no longer be allowed to ask job applicants if they have been convicted of a felony.
Written by Edward Smith
Beginning Jan. 1, 2018, businesses across California will need to comply with a trio of new laws that will make significant changes to the way employers interact with both employees and applicants.
The three bills — AB 1008, AB 168 and SB 63 — create new restrictions for employers when asking applicants for information as well as mandate a leave period for new parents.
Doing so, some feel, opens up small business to new liabilities that they will need to be aware of to avoid costly litigation, and one of the first steps for small businesses is checking to see that their job applications are up to date.
Also known as “ban-the-box” legislation, AB 1008 prohibits employers with five or more employees from asking applicants about criminal convictions until a conditional job offer has been made.
This includes the little box on most job applications that asks applicants to disclose criminal history.
“We need to expand job opportunities for all Californians, especially those who have served their time and are looking for a fair chance to enter the workforce,” Assemblymember Kevin McCarty (D-Sacramento) said in a press release following Gov. Brown’s signing the bill into law.
In the same press release, Dorsey Nunn, the executive director for Legal Services for Prisoners with Children, said that a third of California adults have some kind of conviction or arrest record that shows up on background checks, which can make getting a job difficult.
The problem, said Tom Scott, executive director for the California chapter of the National Federation for Independent Business, is the complicated way the law is enforced.
“Labor-related mandates are a huge issue for small business,” Scott said. “They don’t have a human resources department or a legal department. They’re really trying to navigate through all of these new laws on their own.”
Once a job offer is made, the employer can ask the employee to report prior convictions, but if the employer wants to deny that person the job based on their criminal record, the employer has to make what is called an individualized assessment, according to Allie Wieland, attorney at Fresno law firm Sagaser, Watkins and Wieland PC, who works with small businesses on labor issues.
That assessment must justify that the applicant’s past has a “direct and adverse relationship on the specific duties of the job” according to Wieland.
“They have to let the employee know that the preliminary decision is to deny employment, Wieland said. “They have to present the employee with a copy of the conviction, a written reason for why they are not getting the job and let them know that they have five days to appeal that decision.”
The process can be quite onerous, according to Wieland, especially to businesses that aren’t sure about how the law is implemented. Being unsure can lead to legal action.
“It is going to have significant impact,” Wieland said. “It’s going to open employers up to a lot more litigation.”
Additionally, employers can face liability on the grounds of negligence in hiring.
For instance, according to Wieland, if an employee were to harm another employee — and if the employer knew the person doing the harm had a criminal past — the harmed employee could sue the employer.
This puts many businesses in a bind.
“You can open yourself up to either the potential liability of negligence in hiring or be subject to violations of this law for not hiring the employee. It puts them in a difficult decision,” Wieland said.
AB 168 makes it illegal for employers, regardless of size, to ask for salary history of an applicant. In conjunction with AB 1676 passed last year, AB 168 makes deciding salary very different from how it was determined in the past.
Assembly Bill 1676 essentially said that prior history could not be the only factor in deciding pay for applicants, and AB 168 went beyond that to require businesses to offer applicants a pay scale upon request.
A pay scale, according to Wieland, is essentially a range of compensation a company is willing to pay for a certain job. Criteria such as education, experience and skill are usually determining factors that decide placement on that scale.
Employers are permitted to ask how much an applicant is expecting, but they cannot use that information to decide eligibility.
What makes AB 168 different from the others is that it amended the labor code, opening up employers to lawsuits under the Private Attorney General Act.
What makes PAGA lawsuits different is that they work like class-action lawsuits without needing the same amount of plaintiffs to bring cases to trial.
Any employee has up to a year to file suit on behalf of everyone working at the company.
For small businesses, this could mean an exponentially larger payout, according to Ian Wieland, managing partner at Sagaser, Watkins and Wieland PC.
The bill authored by State Senator Hannah-Beth Jackson (D-Santa Barbara) extends current legislation requiring unpaid leave for new parents to companies with 20 or more employees.
Previously, only businesses with more than 50 employees were required to grant employees the 12 weeks of leave to bond with their child and still guarantee them a job when they come back.
“In small business, it’s important for parents to feel protected in their workplace, and no one should fear having to lose their job,” said Elizabeth Campos, community relations director for First 5 Fresno County. “This law will increase the number of families in our community that will have the opportunity to take advantage of family leave.”
In an interview with KQED news, Sen. Jackson said that that would mean an additional 2.7 million parents would have time to spend with their children, which Campos says is the most important time of a new child’s life.
There are some, however, who feel that this leaves a lot of employers vulnerable.
Twelve weeks is a lot of time for a small business to be without an employee, according to the NFIB’s Scott. His organization deals directly with such employers.
“There is a cost and it’s a huge cost,” Scott said. “This leave must be given at the employees request, regardless of the hardship of the employer.”