New Employment Laws Create Roadblocks

Hiring the right people has always been a challenge, and it’s especially difficult in a low-unemployment environment. Yet that hasn’t stopped some state and local governments from doing their best to complicate the hiring process.

In recent years, one of the biggest issues has been so-called "ban the box" laws that prohibit employers from asking about criminal history on applications. Now it appears that data about past salaries is becoming another taboo subject.

In 2016, Massachusetts joined several other states and cities in enacting laws that prohibit employers in those jurisdictions from asking job applicants about their previous salaries. In effect, the timeless application request for a prospect’s salary history just became illegal.

It’s yet another example of the laws and the courts shifting legal rights and protections away from employers to individuals. The larger goal of most of these laws is laudable: reducing the potential for discrimination from the hiring process. “Ban the box” laws are intended to protect members of minority groups, who are statistically more likely to have faced criminal prosecution in the past. Similarly, the salary disclosure laws are designed to protect groups of people who may have earned lower wages in the past (such as women and minority groups), by reducing the potential to perpetuate those wage gaps.

No matter what you think of these laws, as an employer you’re bound to follow them if you hire people in the states and municipalities where they’ve been enacted. And, as more companies do business across the country, they find themselves subject to laws they didn’t realize existed. Suppose, for example, your company is headquartered in in Indiana, but you have a call center in Minnesota, which has a ‘ban the box” law; a distribution facility in Massachusetts, with its new prohibition on salary information; and another distribution facility in California, where records of some misdemeanor drug convictions are off-limits for employers after just two years. Can you use a single application and hiring process for all your facilities? I think it’s pretty clear that you’d be treading on shaky ground.

That’s why it’s so important to work with knowledgeable business partners, and to draw upon their expertise. Background screening companies must juggle the laws and other requirements from jurisdictions throughout the nation so that we can investigate the personal histories of an ever-more-mobile population. If a candidate for a job opening with your company has worked in Alabama, California, Illinois, and Florida during the last six years, we have to be cognizant of the relevant laws in each of those states when sharing information with you. We may have access to all sorts of information about that candidate, but we’re required to scrape off anything that you’re not allowed to see. Much as we may think you should be aware of the details about her arrest for misdemeanor possession in Sacramento four years ago, giving you that information would violate the law there.

We frequently become a legal resource for our clients and work with legal counsel throughout the U.S. who keep us up-to-date on changes in the law. Because we’re careful about complying with laws and regulations, our clients are less likely to find themselves on the wrong side of legal disputes.

That’s why it can be dangerous to choose vendors for critical services such as background screening by price alone, or by assuming that one vendor is just like another. When a prospective client tells me that their primary goal is to minimize the costs associated with background screening, I know we’re not going to be a good match. There’s always someone who will do the work more cheaply, but if they’re not familiar with or following all the rules, they could hurt your company – either by failing to identify a prospective hire as a poor choice, or by landing you on the losing side of a lawsuit.

Thanks to the internet, your company can do business with more vendors than ever. That access can be a wonderful thing, but convenience doesn’t replace good-old-fashioned due diligence. As doing business becomes more complex, you need to be certain that the companies who claim to work as your partner really are looking out for your best interests. It’s a lot more prudent to ask tough questions up front than to find yourself being asked even tougher ones in court.

Mike McCarty is CEO of Danville-based Safe Hiring Solutions.