New Jersey ban-the-box law: the Opportunity to Compete Act

New Jersey's ban-the-box law, the Opportunity to Compete Act, stops employers with 15 or more employees, including staffing and placement agencies, from asking about an applicant's criminal record on an application or in conversation during the "initial employment application process," which ends when the employer has conducted a first interview. After that, the employer may ask, and may refuse to hire because of a record unless it has been expunged or pardoned. The Act also bans job ads that say people with arrests or convictions will not be considered. It does not require an individualized assessment or a waiting period, which makes the federal FCRA steps the main process after a check.

The statute

The Act was approved August 11, 2014 as P.L.2014, c.32 and is codified at N.J.S.A. 34:6B-11 through 34:6B-19. The enacted text is published on the State of New Jersey's site. The core rule in section 34:6B-14:

• An employer "shall not require an applicant for employment to complete any employment application that makes any inquiries regarding an applicant's criminal record during the initial employment application process."
• An employer "shall not make any oral or written inquiry regarding an applicant's criminal record during the initial employment application process."
• If the applicant voluntarily discloses information about their record during that process, the employer may then ask about it.
• After the process has concluded, the employer may ask, and the Act does not stop it refusing to hire because of the record, "unless the criminal record or relevant portion thereof has been expunged or erased through executive pardon," provided the refusal is consistent with other laws.

"Criminal record" is broad: arrests, detentions, indictments and other charges and any disposition, including acquittal. The Department's definition in N.J.A.C. 12:68-1.2 adds that it "shall include an expunged criminal record."

Who is covered

• Employers with 15 or more employees over 20 calendar weeks that do business, employ people or take applications in New Jersey. The rules explain this means 15 or more employees for each working day in each of 20 or more workweeks in the current or preceding year, and that the employees may work inside or outside New Jersey.
• Agencies. The statute's definition of employer "shall include job placement and referral agencies and other employment agencies."
• New Jersey jobs. The job must be located in whole or substantial part in New Jersey. Under the rules, that is met if the employer has reason to believe at the outset that the successful candidate will spend 50 percent or more of work hours in New Jersey.
• Current employees count as applicants when they apply for another role.

When the initial process ends

The "initial employment application process" begins when the applicant or employer first makes an inquiry about a position and ends "when an employer has conducted a first interview, whether in person or by any other means." The rules define an interview as "any live, direct contact by the employer with the applicant, whether in person, by telephone, or by video conferencing, to discuss the employment being sought or the applicant's qualifications," and say it does not include an exchange of emails or a written or electronic questionnaire.

Because an agency is an "employer" under the Act and a phone call can be an interview, a recruiter's live screen could arguably end the initial process. We did not find guidance that settles how that applies when an agency and a client both interview, so the safer practice is to leave criminal history to the client's process after its own interview, or after an offer.

Exceptions

Section 34:6B-16 allows earlier inquiry where:

• the job is in law enforcement, corrections, the judiciary, homeland security or emergency management;
• a criminal history background check is required by law, rule or regulation, an arrest or conviction would or may preclude the person from holding the job under a law, or a law restricts the employer's business activities based on employees' records; or
• the job is designated by the employer as part of a program designed predominantly or exclusively to encourage employment of people with arrests or convictions.

What New Jersey does not require

Unlike California, Illinois or Washington, the Act does not require an individualized assessment, a preliminary notice or a response period before rejecting someone because of a record. That does not leave the decision unregulated: federal Title VII and EEOC guidance still apply, and if a screening company supplies the report the FCRA pre-adverse action process applies. The Act also preempts local ordinances on criminal history in employment, except those regulating a municipality's own operations (34:6B-17).

Penalties and enforcement

Under 34:6B-19, an employer that violates the Act is liable for a civil penalty of up to:

• $1,000 for the first violation;
• $5,000 for the second violation; and
• $10,000 for each subsequent violation,

collectible by the Commissioner of Labor and Workforce Development. Section 34:6B-18 makes those penalties the sole remedy and says the Act creates no private cause of action. For agencies, note also New Jersey's separate licensing and registration rules, covered in employment agency license requirements.

How it fits with FCRA adverse action

Because the Act has no notice procedure of its own, the federal FCRA is the process to follow when a report comes back with something: stand-alone disclosure and authorization first, then a pre-adverse action notice with the report and the summary of rights, a reasonable wait, and a final adverse action notice. Many employers still apply an individualized review and a five business day response period as good practice, consistent with EEOC guidance. The steps are in the FCRA background check process.

Questions to settle with a New Jersey client at intake

• Does the client have 15 or more employees for each working day in 20 or more weeks this year or last, counting employees outside New Jersey?
• Will the successful candidate spend at least half of their work hours in New Jersey?
• Does an exception in 34:6B-16 apply, and which law, rule or regulation supports it?
• Who conducts the first interview, and is criminal history raised only after it?
• Who orders any background check and sends the FCRA notices?

A script for New Jersey screens

Candidate volunteers a record: "Thanks for telling me. It isn't part of my screening, so I'll leave it there and won't note it. If there's a background check it happens later, and you'd have a chance to see the report."

Candidate asks whether a record rules them out: "I don't assess that, and there's no blanket rule. Anything like that is looked at later in the process."

Client asks you to check before submitting: "New Jersey doesn't allow criminal record questions until after a first interview, and that applies to agencies too. Your process after the interview or offer is the right place for it."

A New Jersey checklist for recruiting desks

1. Remove criminal record questions from applications, online forms and screening questionnaires for New Jersey roles.
2. Strip "no felons" or "clean record" language from ads unless an exception applies and is documented.
3. Keep the topic out of recruiter screens; let the client handle it after its interview or offer.
4. Never base a hiring decision on a record that has been expunged or erased through executive pardon.
5. Keep volunteered information out of notes and submittals. See what not to write in interview notes.
6. For federal guidance and general scripts, see ban-the-box laws and interview questions.