Title: 2024 Employment Background Check Compliance: A Year in Review for Employers
In the past year, significant strides have been made in employment compliance, revolutionizing background checks, hiring processes, and workplace policies. Let's dive into the latest developments:
Criminal History Reform
Various states have enacted reforms to grant individuals with criminal histories second chances and promote fair employment opportunities. Key updates include:
- Idaho introduced petition-based expungement for non-violent offenses, making it easier for individuals to clear their records.
- Pennsylvania expanded automatic sealing, now including pardoned crimes, non-violent drug felonies, and summary offenses.
- New York enacted the Clean Slate Act, providing full sealing for misdemeanors and non-violent felonies in 2027.
- Minnesota will introduce automatic expungement for misdemeanors and certain felonies in 2025, streamlining the process for individuals to clear their records.
- Virginia prioritizes the automatic sealing of marijuana-related offenses and dismissed charges, aligning with broader cannabis reforms.
- Washington, D.C., will phase-in record sealing, starting with decriminalized offenses, and gradually expand to misdemeanors.
- Colorado expanded protections to include non-conviction records and non-drug-related felonies, emphasizing fairness in hiring decisions.
Employers must refine adjudication processes to account for discrepancies between available records and candidate claims, and provide training to hiring managers for scenarios involving sealed or expunged records.
Ban-the-Box Laws
Ban-the-box laws delay inquiries into a candidate's criminal history, promoting fair hiring practices and ensuring individualized assessments for adverse decisions. Notable updates include:
- Unincorporated Los Angeles County extended protection to all paid work, including contractors, gig workers, and freelancers.
- Philadelphia strengthened protections by barring adverse decisions based on exonerated records, such as pardons or dismissed charges.
- Prince George's County, Maryland, lowered the employer threshold from 25 to 10 employees and excluded non-violent felonies older than five years.
- Unincorporated San Diego County enhanced California's Fair Chance Act by requiring individualized assessments of criminal records.
- US Virgin Islands Fair Chance Act requires salary disclosures, promoting equal pay practices and employee rights.
To comply with these laws, employers should tailor hiring processes for jurisdiction-specific requirements, update pre-adverse and adverse action notices, and leverage compliance tools.
Pay Equity and Transparency
Salary History Bans
Salary history bans aim to eliminate wage disparities by prohibiting employers from using past compensation to determine future pay. Key updates include:
- Columbus, Ohio, prohibited employers with 15 or more employees from asking about salary history.
- Lehigh County, Pennsylvania, added salary history restrictions as part of its broader anti-discrimination ordinance.
- Minnesota applied salary history bans to in-state and remote positions.
Pay Transparency Laws
Pay transparency laws require employers to disclose salary information and promote equitable pay practices. Notable updates include:
- Colorado maintains one of the most detailed laws, requiring salary disclosures, internal promotion notifications, and application deadlines for all job opportunities.
- Hawaii, effective January 2024, requires employers with 50 or more employees to include salary ranges in job postings.
- Maryland updated pay transparency laws to cover positions with any time in the state, not just those fully within its borders.
Employers must now audit job postings, ensure salary disclosures are accurate, and prepare for demographic pay reporting requirements in jurisdictions like Massachusetts.
Cannabis Legalization
Cannabis legalization has given rise to complex challenges for employers, particularly around drug testing and workplace policies.
Medical Marijuana Updates
- Pittsburgh prohibited pre-employment testing for medical marijuana patients, except in safety-sensitive positions.
- Kentucky and South Dakota allowed employers to enforce zero-tolerance policies while exempting safety-sensitive roles from certain protections.
Recreational Adult-Use Cannabis
- California and Washington prohibited actions based on non-psychoactive THC metabolites and encouraged oral fluid testing to identify current impairment.
- Ohio legalized recreational marijuana but allowed employers to maintain strict drug-free workplace policies.
Employers should focus on impairment testing rather than zero-tolerance policies and ensure drug testing practices align with state laws.
AI and Privacy Laws
The rapid adoption of AI in hiring has necessitated new regulations aimed at boosting transparency, minimizing bias, and ensuring ethical AI use.
State-Specific AI Laws
- New York City mandated annual bias audits for AI hiring tools and required disclosure to candidates.
- Illinois enacted HB 3773, prohibiting AI practices that result in discriminatory impacts, and banning ZIP code proxies for protected characteristics.
- Colorado introduced a comprehensive AI Act regulating high-risk systems, requiring risk assessments and documentation of AI processes.
Federal Updates
- The CFPB classified AI-generated worker dossiers as consumer reports under the FCRA, necessitating accuracy, disclosure, and dispute resolution.
- The Department of Labor encouraged transparency and worker involvement in AI development.
Employers must audit AI tools for bias, comply with disclosure requirements, and stay up-to-date on emerging state and federal regulations.
E-Verify Updates
E-Verify compliance saw key updates, emphasizing employee protections and record retention:
- Illinois requires employers to notify employees of E-Verify discrepancies within five business days, provide clear explanations, and allow adequate time for resolution.
- USCIS retains E-Verify records beyond the 10-year deletion cycle, requiring employers to retain records linked to I-9 forms effectively for audit readiness.
Employers must establish clear procedures for notifying employees of E-Verify discrepancies, securely retain records, and train HR teams to handle discrepancies effectively. Regular internal audits of E-Verify and I-9 processes can help identify and resolve compliance gaps, reducing risk.
Compliance is not just a legal obligation—it's an opportunity to strengthen organizational values. Romper Room syndrome is old hat; it's time to embrace the evolution of employment compliance and build trust with workforce and stakeholders by focusing on fairness and transparency.
Enrichment Data:
Overall
The newest employment compliance updates for 2024 and 2025 consist of critical shifts in background checks, hiring processes, and workplace policies. Key areas include:
Background Checks and Hiring Processes
- Automated Background Screening:
- Automation Benefits: Automated background screening utilizes AI and RPA to streamline the process, offering faster and more accurate results. Technologies like NLP, computer vision, OCR, and intelligent document processing are used to process unstructured documents and extract data[2].
- Continuous Monitoring: Automated processes permit ongoing monitoring of an individual’s background, helping identify any changes or developments that might be relevant to employment. However, adherence to regulations such as the FCRA is crucial[2].
- Background Screening Compliance:
- Ban-the-Box Laws: These laws restrict the use of criminal history in the initial stages of the hiring process. Employers must comply with these laws to avoid discrimination[3].
- Clean Slate Laws: Certain states have adopted clean slate laws that delete or obscure criminal records, affecting how employers can utilize this information in background checks[3].
Workplace Policies
- Cannabis Legalization:
- State and Federal Discrepancies: Although cannabis is legalized in many states, it remains a Schedule I substance federally. This poses challenges for employers, especially those with federal contracts or multi-state operations. Compliance with both state and federal regulations is essential for balancing employee rights with safety[4].
- Pay Equity and Transparency:
- Salary Transparency: Employers, particularly those with multistate operations, are required to post salary and wage information proactively. This is part of new laws promoting pay transparency[3].
- Exempt Employee Salary Thresholds: The U.S. Department of Labor raised the salary threshold for exempt employees. Workers must still meet applicable duties tests to be classified as exempt. Employers must reassess their workforce and adjust classifications accordingly[5].
- AI and Privacy:
- Background Check Automation: The use of AI in background checks boosts efficiency but raises privacy concerns. Compliance with relevant regulations, such as the FCRA, is crucial for employers utilizing automated tools[2].
- E-Verify:
- No Specific Updates: There are no specific updates mentioned regarding E-Verify in the sources provided. However, employers should continue to comply with federal regulations concerning the use of E-Verify for verifying the employment eligibility of new hires.
Summary
- Background Checks: Automated background screening offers benefits through AI and RPA, processing unstructured documents and data for faster and more accurate checks. Continuous monitoring is feasible, but regulatory compliance is critical.
- Hiring Processes: Ban-the-box laws and clean slate laws impact how employers use criminal history in hiring. Pay transparency is becoming essential, particularly for multistate employers.
- Workplace Policies: Cannabis legalization poses challenges due to federal-state discrepancies. Compliance with both state and federal regulations is essential to balancing employee rights with safety.
- AI and Privacy: The use of AI in background checks raises privacy concerns, necessitating compliance with relevant regulations.
These updates highlight the importance of employers staying informed and adapting to changing laws and regulations to maintain compliance and uphold fair hiring practices.
- Companies need to revise their hiring processes in light of the AI hiring regulations, which require annual bias audits and disclosure of AI tool usage to candidates in cities like New York City.
- Employers should comply with e-verify compliance updates in states like Illinois, where employers are now required to notify employees of any E-Verify discrepancies within five business days and retain E-Verify records beyond the 10-year deletion cycle.
- Employers operating in Colorado need to abide by the state's pay equity and transparency laws, which include disclosing salary ranges for all job postings, internal promotion notifications, and application deadlines for all opportunities.
- To adapt to fair hiring practices, organizations must consider the ban-the-box updates and adjust their hiring processes for jurisdiction-specific requirements, updating pre-adverse and adverse action notices, and leveraging compliance tools.
- As cannabis legalization policies evolve, employers must focus on impairment testing instead of zero-tolerance policies and ensure drug testing practices align with state laws in cities like California, Washington, and Ohio.
