New & Developing HR Trends

Going Local

While the Trump administration is certain to be making changes going forward that will impact HR and employment practices; today's most significant HR trends are coming increasingly from the state and local level. Employers are already facing a proliferation of new and expanded employment regulations and requirements across the country. At least 20 states have new or expanded regulations going into effect this year, and there are hundreds more pending bills in over 40 states and municipalities.[1] And while there are a significant number of new or expanded laws being proposed, there are also a few clear trends that are having a growing impact and gaining momentum.[2] A few of these trends are discussed below.

"Ban the Box" refers to the check off box that is traditionally found on employment applications that asks applicants if they have ever been convicted of a crime. There is a drive to eliminate this question not only on application forms, but also during the interview process or at any point before the hiring decision has been made. There is also a movement to prohibit criminal background checks being conducted prior to the hiring decision.

The objective is to increase employment among individuals who have criminal convictions. After a hiring decision has been made, or in some cases after a conditional offer has been extended, criminal conviction inquiries can be made. But, just as the law currently is in most places, only having a criminal conviction cannot automatically disqualify a candidate. There has to be a clear business reason to reject that candidate and each situation must be reviewed on a case by case basis.

Nine states (CT, HI, IL, MA, MI, NJ, OR, RI, VT), have Ban the Box regulations, with several more considering similar regulations. In addition to the nine states, 29 cities and counties now extend Ban the Box regulations to government contractors or private employers. Fifteen of those localities—Austin, Baltimore, Buffalo, Chicago, Columbia (MO), the District of Columbia, Los Angeles, Montgomery County (MD), New York City, Philadelphia, Portland (OR), Prince George's County (MD), Rochester (NY), San Francisco, and Seattle extend Ban the Box regulations to private employers in the area.[3]

Eleven states (CA, CO, CT, DE, HI, IL, MD, NV, OR, VT, WA), along with Washington, D.C. and New York City, have enacted credit check restrictions during the interview and selection process for job candidates. There are several more states and localities with pending bills. The intention is to prevent employers from using a candidate's credit history and score in the selection process. There are exemptions for certain types of employees; for example, employees who handle cash and financial information. However, there is an increasing effort to remove a person's credit history as criteria for employment.

On average, women earn 79% of what men earn for similar jobs.[4] To close this gap, many states and cities have enacted or are considering new laws aimed at preventing companies from discriminating in pay on the basis of gender. While the requirement of equal pay between men and women is already the law in most states, many cities and states are trying to put more teeth into their laws, both by specifying how salary history can be used in making initial salary offers, as well as by increasing penalties for non-compliance.[5] New York and California have already passed strong laws restricting the use of salary history in making initial salary determinations and Massachusetts and Philadelphia have passed laws banning the inquiry and use of salary history altogether.

The argument with respect to eliminating the use of salary history in making initial salary offers is that women traditionally start their careers at a lower salary than men, and that this pay differential compounds throughout their careers. Lawmakers intend that by - limiting or even outright banning an employer's consideration of a prospective employee's salary history when making initial salary determinations, equally qualified candidates will receive similar offers regardless of their gender.

Many states and localities have passed laws that prohibit employers from enacting policies that restrict employees from discussing their salary with each other. This enables employees to more freely discuss their salary and compare how much they are being paid. The intention is that employees will be able to more easily discover inequities in pay for performing similar duties, which may lead to more employees (particularly women) making complaints to company leadership and exercising their rights under the equal pay laws.[6]

Over 30 states and cities have enacted some level of paid family or sick leave. This is a growing trend. For example, CA, CT, DC, NJ, MA, NYC, and OR already have paid leave laws. Over a dozen more states currently have bills under consideration.[7]

The increased localization of employment laws adds complexities in how companies manage HR and makes compliance more difficult, particularly for companies in multiple jurisdictions. Below are several recommendations for companies to address these HR compliance concerns based on the many variations between federal, state and local laws:

• Review the hiring process and documents such as applications to identify where modifications should be made in relation to questions about criminal convictions, credit history, and pay history.
• Review the background check process to ensure that if and when background checks are performed in the hiring and promotion process, they meet state and local regulations.
• Eliminate automatic disqualification policies for criminal convictions and put in place a case by case review process. Ensure that criminal conviction checks are only being performed in accordance with applicable state and local laws.
• Review compensation policies with regard to how salary history is used in making initial salary offers and policies that restrict employees from discussing their salaries with each other. Consider revisions based on applicable state and local laws.
• Provide training for managers and hiring managers on acceptable questions and criteria in the recruiting, interviewing and hiring processes.
• Review employee handbooks to identify areas that need to be updated and include disclaimer language that allows for exceptions based on state and local laws.

[1] National Conference of State Legislators: http://www.ncsl.org/
[2] Society of Human Resources Management (SHRM): https://www.shrm.org/hr-today/public-policy/state-affairs/pages/pendingusandstatelegislation.aspx
[3] National Law Employment Project: http://www.nelp.org/publication/ban-the-box-fair-chance-hiring-state-and-local-guide/
[4] Joint Economic Committee, U.S. Congress: https://www.jec.senate.gov/public/_cache/files/0779dc2f-4a4e-4386-b847-9ae919735acc/gender-pay-inequality----us-congress-joint-economic-committee.pdf
[5] Law.com: http://www.law.com/sites/almstaff/2016/10/21/states-look-to-give-teeth-to-national-pay-equity-legislation/
[6] NY Law Journal: http://www.newyorklawjournal.com/id=1202771508651/Why-NYs-New-Pay-Equity-Law-May-Be-a-GameChanger
[7] Better Balance: http://www.abetterbalance.org/resources/paid-sick-time-legislative-successes/

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