Navigating the complexities of state laws that impact employment policies and procedures, including background checks, poses increased challenges for employers. What’s permissible in one state may not be so in another, creating an intricate web of rules, requirements, and nuances. These include differences in how employers should be defining past compensation, accessing criminal records, and handling personal identifying information. With varying laws and regulations, staying compliant requires meticulous attention to detail and adaptability. To that end, we are compiling the most impactful laws for employers on a quarterly basis.
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States hit the ground running in the first quarter of 2024. Newly enacted laws impacting employers include pay transparency, clean slate, and data privacy among various states.
Pay Transparency
Pay transparency laws have gained momentum recently as salary history laws of years past evolved and broadened. These laws require employers to disclose information about employee compensation, including salaries, wages, bonuses, and other forms of compensation, with the goal of promoting fairness and equity in the workplace. Some laws require employers to provide salary ranges for job openings, while others require disclosure of pay scales within the organization, and still others prohibit retaliation against employees who discuss their compensation with coworkers. Some encompass all three, as well as other requirements.
Washington, D.C.
On January 12, 2024, the Wage Transparency Omnibus Amendment Act was signed into law, requiring private employers of any size to disclose the minimum and maximum projected salary or hourly wage for a position in all job postings and advertisements. Further, D.C. employers also must include this range in any internal job postings of the position.
Beyond job postings, the law requires employers to disclose the existence of other benefits, including healthcare and bonuses, to prospective employees before the first interview, and prohibits employers from screening job applicants based on wage history. Employers will be required to post a notice in the workplace (in a conspicuous place in at least one location where employees congregate) notifying employees of their rights under the law. The effective date of June 30, 2024 is fast approaching.
Federal
The Federal Acquisition Regulatory Council (“FAR Council”) recently proposed a new rule similar to a pay transparency law and, as such, worth noting here. The proposed rule imposes certain requirements for contractor job advertisements involving work that is “on or in connection with” a government contract. All advertisements for job openings must disclose the salary or wages (or range) that the contractor believes in good faith it will pay for the advertised position. It must also include a general description of the job benefits and other compensation types offered.
Further, if 50% or more of the expected compensation is attributable to commissions, bonuses, and/or overtime pay, the contractor must indicate the dollar amount or percentage of overall compensation (or ranges thereof) for each type. The new FAR clause would also prohibit contractors from seeking or using an applicant’s compensation history as part of the hiring process for work “on or in connection with” a government contract. Contractors may submit comments on the proposed rule through April 1, 2024.
Clean Slate
Clean slate laws, designed to help individuals with criminal records obtain a fresh start by automatically sealing or expunging certain past convictions from their records, have also increased drastically. These laws typically apply to minor offenses or non-violent crimes, with the goal of removing barriers to employment, housing, and other opportunities. Although the details vary by jurisdiction, clean slate laws often involve an automated process for clearing eligible convictions after a certain period has passed without further criminal activity. While they are a part of broader efforts to promote reintegration and reduce recidivism among individuals with criminal histories, they often present a challenge for employers who are unable to gather information about those whom they are considering hiring.
Maryland
The Maryland Clean Slate Act of 2024 was recently proposed, setting forth a simplified expungement process for clearing criminal records. The law expands the eligibility criteria of the state’s previously enacted clean slate act, while establishing a system for automatically expunging certain offenses after specified timeframes if the person does not engage in additional criminal activity. The goal of this simplification is to reduce the need for individuals to file petitions for expungement. For example, non-domestically related misdemeanors would automatically be expunged seven years after disposition, while non-domestically related felonies would be after 20 or more years. The law would also expunge certain lesser offenses after three years. In Maryland, 410,000 people would be eligible to have their record fully cleared under this amendment. If enacted, this law would become effective January 1, 2027.
Data Privacy
Data privacy laws governing the collection, use, storage, and sharing of personal information by organizations have also increased considerably over the past couple of years. The goal of these laws is to protect an individual’s privacy rights and ensure that their personal data is handled responsibly and securely. Data privacy laws often require organizations to obtain consent from individuals before collecting their personal information, implement measures to safeguard data against unauthorized access or disclosure, and provide individuals with rights to access, correct, or delete their personal data.
New Jersey
On January 16, 2024, the New Jersey Data Privacy Law was signed into law, making New Jersey the first state this year and the thirteenth state overall to adopt comprehensive data privacy legislation. Under the law, “controllers” (individuals or legal entities that determine the purpose and means of processing personal information) that conduct business in the state (or produce products or services targeted to state residents) and within the calendar year (i) control or process personal data of at least 100,000 New Jersey consumers or (ii) control or process personal data of 25,000 New Jersey consumers and derive revenue (or receive discounts) from the sale of personal data, must provide consumers with certain rights.
Consumers, defined as “New Jersey residents acting only in an individual or household context,” may (i) confirm whether a controller accesses and processes their personal data; (ii) correct inaccuracies in their personal data; (iii) delete their personal data; (iv) obtain a copy of their personal data held by the controller in a readily usable format (i.e., data portability); and (v) opt out of processing of their personal data for the purposes of targeted advertising, the sale of their personal data, or profiling.
The law requires controllers to provide consumers a reasonably accessible, clear, and meaningful privacy notice that includes:
- the categories of personal data the controller processes;
- its purpose for processing the data;
- the categories of all third parties to which the controller may disclose the personal data;
- the categories of data the controller may disclose;
- information on how consumers may exercise their rights and appeal the controller’s decisions;
- the process by which the controller notifies consumers of material changes to their notice, along with the effective date of the notice; and
- an active email address or other online mechanism the consumer may use to contact the controller.
New Jersey’s data privacy law will become effective January 15, 2025.
What Employers Can Do
Compliance demands continuous vigilance. In a rapidly evolving regulatory environment, staying informed by proactively monitoring legislative changes is key for employers. As such, employers should consider developing a comprehensive strategy, including:
- Regular audits of hiring practices, covering application and interview criminal-related questions, job position salary ranges, and consumer data usage.
- Stay updated on new or amended laws in relevant jurisdictions.
- Maintain a compliance checklist to ensure alignment with legal requirements.
Employing these strategies facilitates an efficient and risk-averse navigation of regulatory complexities. But, as always, consulting legal counsel and a PBSA-accredited background screening partner on compliance matters is essential.
Why Orange Tree?
Orange Tree Employment Screening helps companies win their race to fill open positions by providing fast and easy background check and drug testing services. We are committed to helping our clients stay updated with compliance, create safer workplaces, mitigate financial risk, and avoid legal exposure. We forge long-term partnerships with our clients by offering a full range of technology-led screening solutions predicated on best practice and legally defensible screening programs. To get started with a background screening program tailored to your needs, you can schedule time to Speak with Our Team.
