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Compliance Roundup: You’ve Asked – We’ve Answered!

Navigating compliance in the HR world can be difficult - we can help. We compiled up the top questions we receive from HR professionals in our quarterly compliance webinar, and provided responses.

June 19, 2022
Alonzo Martinez, Associate General Counsel at HireRight
6.19.22 2022-06 Blog-Complliance-Roundup Youve-Asked Weve-Answered

We know how difficult it can be to navigate the ever-changing legislation around HR compliance. HireRight hosts a webinar covering emerging legislation and litigation that impact employers’ screening programs each quarter. During the webinar, we field questions directly from HR professionals.  Here, we have compiled the top questions asked during the webinar and our responses. Some questions have been edited for brevity or clarity.

Background Screening Compliance

Question: What are pre-adverse action and adverse action notices?

Answer: Numerous federal and state laws prescribe the processes that must be followed when an employer may negatively impact an individual’s employment. 

Before taking any adverse employment action, like withdrawing a candidate’s job offer or terminating an existing employee based in whole or in part on the results of a background check, the Fair Credit Reporting Act, or FCRA, requires that an employer provide the candidate or employee with a “pre-adverse action notice” that includes:

  1. A copy of the background report; and

  2. A copy of the Consumer Financial Protection Bureau’s “A Summary of Your Rights Under the Fair Credit Reporting Act.” 

There are limited exceptions to the pre-adverse action process made available to Department of Transportation regulated positions, which are covered under FCRA §604(b)(3)(B).

If after an employer has provided the candidate or employee a reasonable opportunity to review and take action on the pre-adverse action notice (at least 5 business days or longer as required by local law), the employer proceeds to take an adverse action concerning the individual’s employment, then the employer must provide the individual with an “adverse action notice” that includes:

  1. Notice of the adverse employment action;

  2. The name, address, and telephone number of the background check vendor also known as a Consumer Reporting Agency (“CRA”) that furnished the consumer report;

  3. A statement that the CRA did not make the decision to take the adverse action and is unable to provide the consumer the specific reasons why the adverse action was taken;

  4. Notice to the consumer of their right (pursuant to Section 612(b) of the FCRA) to obtain a free copy of the consumer report from the CRA within sixty (60) days after receipt of the adverse action notice; and

  5. Notice to the consumer of their right (pursuant to Section 611 of the FCRA) to initiate a dispute with the CRA regarding the accuracy or completeness of any information in a consumer report furnished by the CRA.

More information can be found in our FCRA Basics video and whitepaper.

Ban-the-Box and Criminal Reform

Question: What are Ban-The-Box laws?

Answer: Ban-the-box laws delay an employer’s inquiry into a candidate’s criminal history until later in the vetting process – generally, after the candidate has been deemed qualified for the position or after a conditional offer of employment has been extended. Ban-the-box laws differ in complexity. Some laws require that an employer notify the candidate of the specific criminal records that may cause them to be denied employment. Other laws require that an employer assess the individual’s criminal history in relation to their prospective job.

Question: Are independent contractors subject to ban-the-box laws?

Answer: The ban-the-box laws of the jurisdictions identified below generally identify that the laws apply to any work for compensation. Therefore, if an organization pays an independent contractor for their services, the ban-the-box law applies.

  • Colorado

  • Maryland

  • New Jersey

  • Washington

  • Austin, TX

  • De Soto, TX

  • Baltimore, MD

  • Buffalo, NY

  • Los Angeles, CA

  • Montgomery County, MD

  • New York City, NY

  • Philadelphia, PA

  • Prince George’s County, MD

  • Rochester, NY

  • San Francisco, CA

  • Spokane, WA

  • Washington, DC

  • Waterloo, IA

Pay Equity and Transparency Laws

Question: Are pay equity and pay transparency laws the same thing?

Answer: Pay equity laws promote equal pay for equal or comparable work. Pay transparency laws require that employers post or share pay scales for positions that are often, but not always, included within pay equity laws. More information can be found in our Pay Equity whitepaper.

QuestionDoes an employer need to disclose benefits in addition to salary or wages within pay transparency laws?

Answer: Employers in Colorado and Washington must include a general description of benefits and other compensation in addition to salary or wages. Other jurisdictions with pay transparency laws have not specifically identified benefits or other compensation within their definitions of salary or wages that must be disclosed. 

Question:  Are pay equity, pay transparency, and salary history bans based on a candidate’s residence or potential work location?

Answer: In general, pay equity, pay transparency, and salary history bans apply to a candidate’s work location.

Question: Does the NYC pay transparency law apply to remote workers?

Answer: NYC’s amended pay transparency law expressly states that positions that cannot or will not be performed, at least in part, in New York City are exempt from the posting requirement. Therefore, it can be inferred that if work could be performed remotely within NYC, the pay transparency law applies.

Question: My company is based outside of NYC, but we have one worker in NYC. Does the NYC wage transparency law apply to us?

Answer: Guidance published by the NYC Commission on Human Rights notes, “All employers that have four or more employees…are covered by the NYCCHRL [New York City Human Rights Law]…owners and individual employers count towards the four employees. The four employees do not need to work in the same location, and they do not need to all work in New York City. As long as one of the employees works in New York City, the workplace is covered.”

Question: Who does the Illinois Equal Pay Reporting law apply to?

Answer: Private employers with 100 employees or more who are required to file an EEO-1 with the Equal Employment Opportunity Commission must obtain an Equal Pay Registration Certificate. Please review the FAQs published by the Illinois Department of Labor for more information. 

Question: In states with equal pay reporting laws (e.g., CA and IL) are the reports made public?

Answer The California Department of Fair Employment and Housing and the Illinois Department of Labor reserve the right to publicly publish aggregate pay reporting data. However, a specific employer’s pay data is not made public but may be provided to other agencies or regulators for an investigation.

Privacy, Tech, And Employment

Question: What does Baltimore’s facial surveillance law prohibit?

Answer: Baltimore’s ordinance prohibits “obtaining, retaining, accessing, or using certain face surveillance technology or any information obtained from certain face surveillance technology.”  “Face surveillance” means an automated or semi-automated process that assists in identifying or verifying an individual based on the physical characteristics of the individual’s face. “Face surveillance system” does not include a biometric security system designed specifically to protect against unauthorized access to a particular location or an electronic device. Employers who use facial surveillance technologies not specifically exempted by the ordinance are encouraged to review the permissible use of that technology within Baltimore with their legal counsel.

QuestionWhat does New York City’s AI law prohibit?

Answer: Effective January 1, 2023, NYC will restrict an employer’s ability to use an “automated employment decision tool”  (AEDT), defined as “any computational process, derived from machine learning, statistical modeling, data analytics, or artificial intelligence (AI), that issues simplified output, including a score, classification, or recommendation, that is used to substantially assist or replace discretionary decision making for making employment decisions that impact natural persons.”  The law requires that candidates subject to the use of AEDTs are provided with advance notice that identifies “job qualifications and characteristics that such automated employment decision tool will use in the assessment of such candidate or employee.”  Alternate accommodations must be made for individuals who refuse to permit the use of an AEDT.  Employers who an AEDT must submit the AEDT to a “bias audit conducted no more than one year prior to the use of such tool.”

Marijuana And The Workplace

Question: Do any laws permit a worker to be under the influence of marijuana while at work?

Answer: No. All laws that have legalized marijuana in either medical or recreational form permit employers to prohibit an individual from possessing or being under the influence of marijuana while at work, on duty, or on call.

Question: How should an employer address the marijuana use of an employee who works at home?

Answer: The lines can become blurred when addressing an employee’s marijuana use at home. Employers are encouraged to work with their legal counsel to develop remote work marijuana policies that address this issue. The New York Department of Labor issued guidance, which notes that covered employers can prohibit marijuana impairment during work hours, including work performed remotely or at home.

Question: How are “safety-sensitive” roles exempt from legal protections defined?

Answer: Each jurisdiction’s statute defines “safety-sensitive” or other roles exempted from the prohibitions of that law. In general, exceptions exist where:

  • An employer is/was required to prohibit marijuana use by state or federal statute, regulation, or ordinance, or other state or federal governmental mandate; or

  • The employer would be in violation of federal law; or

  • The employer would lose a federal contract or federal funding.

Question: How can an employer identify marijuana impairment?

Answer: No irrefutable and comprehensive list of symptoms of impairment exists. Articulable symptoms of impairment are objective observations that indicate decreased performance by an employee when fulfilling their role. Employers should consult with legal and medical professionals when devising and implementing impairment procedures and policies. More information can be found in HireRight’s Reasonable Suspicion Policies and Procedures Best Practices webinar.

I-9 and E-Verify

Question: What is the “virtual I-9 inspection process?”

Answer: As a result of the Covid-19 pandemic, Immigration and Customs Enforcement issued guidance to employers noting that, “as of April 1, 2021, the requirement that employers inspect employees’ Form I-9 identity and employment eligibility documentation in-person applies only to those employees who physically report to work at a company location on any regular, consistent, or predictable basis.”  Employees who work exclusively in a remote setting due to Covid-19-related precautions are temporarily exempt from in-person inspection of a worker’s employment authorization documents. Employers can review the worker’s employment authorization documents virtually and enter “COVID-19” as the reason for the physical inspection delay in Section 2 of Form I-9. 

Question: Once an employer returns to in-person operations, how does an employer correct an I-9 that they completed “virtually”?

Answer: Immigration and Customs Enforcement guidance notes, “Once normal operations resume, all employees who were onboarded using remote verification, must report to their employer within three business days for in-person verification of identity and employment eligibility documentation for Form I-9, Employment Eligibility Verification. Once the documents have been physically inspected, the employer should add “documents physically examined” with the date of inspection to the Section 2 additional information field on the Form I-9, or to section 3 as appropriate.”

Question: How should an employer complete I-9s if its offices are reopened with restrictions but not returned to “normal operations?”

Answer: Per Immigration and Customs Enforcement guidance, an employer may continue to utilize the virtual inspection process until normal operations have resumed.

Question: How should employers with no physical workspace and 100% remote workers complete I-9s?

Answer: Employers who are fully remote despite the pandemic should follow guidance issued by the US Citizenship and Immigration Services for completing Form I-9 for remote workers. Employers may also consider leveraging a service to help complete Form I-9 for remote workers.


HireRight’s 2022 Q2 Compliance Webinar

As the legislative season winds down, we invite you to register for our upcoming Q2 compliance webinar presented on Thursday, July 21, 2022, at 11 AM PST. All registrants will get a link to a recording of the webinar. Live attendees will receive 1.0 general recertification credit hour toward PHR, SPHR, and GPHR through the HR Certification Institute. We hope you’ll join us!

Release Date: June 19, 2022

Alonzo Martinez profile image

Alonzo Martinez

Alonzo Martinez is Associate General Counsel at HireRight. Mr. Martinez is responsible for monitoring and advising on key legislative and regulatory developments globally affecting HireRight’s service delivery. His work is focused on ensuring HireRight’s performance as a consumer reporting agency and data processor complies with relevant legal, regulatory, and data furnisher requirements. Mr. Martinez obtained his Juris Doctorate from the University of Colorado, and is licensed by the Supreme Court of the State of Colorado. He is a member of the Colorado Bar Association Employment Law Division, the Association of Corporate Counsel, and the Professional Background Screening Association.