In prior posts, we have noted that HR professionals should acknowledge the tension between making hiring decisions based on an applicant’s criminal history and avoiding Title VII liability, if refusing to hire certain individuals based on these prohibitions results in disparate treatment of or disparate impact on protected classes of individuals under Title VII (e.g., race, national origin, gender). In recent years, the “Ban the Box” Movement has gained traction in an effort to place restrictions on the types of criminal conduct that employers may consider and how they may consider it, with the stated goal of affording persons with histories of criminal conduct opportunities for gainful employment. At the federal level, the EEOC complemented these efforts when it issued its 2012 Enforcement Guidance entitled, “Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964.” In this Guidance, the EEOC emphasized that criminal background check practices may have a disparate impact on, for example, African American and Hispanic men who have a statistically higher arrest and incarceration rate than other classes of individuals. Accordingly, the EEOC’s Guidance outlined what it believes to be an employer’s best practices for complying with Title VII when handling an applicant’s criminal history. In 2015, the Obama Administration adopted a “ban the box” policy in federal employment by modifying certain rules to delay inquiries into an applicant’s criminal history until later in the hiring process.

At the state level, according to the National Employment Law Project, 25 states have adopted policies that prohibit inquiring into or considering an applicant’s criminal history until after consideration of the applicant’s qualification, largely in the public employment sector. In nine of those states, private employers also are prohibited from requesting criminal history information until later in the hiring process. South Carolina currently is not one of those states.  However, if any one of the four bills (H. 3059, H. 3062, S. 191, S. 192) currently pending before the South Carolina General Assembly is passed, “ban the box” could be a statutory, statewide policy in South Carolina.

Collectively, all 4 bills propose to codify in statute the following general concepts:

  • “Conviction of crime”   The types of criminal history that an employer is permitted to consider is specifically defined. The House bills seek to limit criminal convictions to felonies, “gross misdemeanors” and misdemeanors involving possible incarceration. The Senate bills involve convictions, guilty pleas, nolo contendere pleas and bond forfeitures for crimes involving possible incarceration. All of the bills specifically exclude consideration of any arrests that did not result in a conviction, expunged convictions and/or charges that were not pressed or dismissed.
  • Ban the Box         No public or private employer may inquire, consider or require disclosure of an applicant’s criminal record until after either (1) the applicant is selected for an interview, or (2) if interviews are not conducted, a conditional offer of employment is made to the applicant. Employers exempt from this prohibition include the S.C. Department of Corrections, financial institutions (H. 3062 only) and employers with a statutory duty to conduct a criminal background check or otherwise inquire into an applicant’s criminal history.
  • Denial of Employment or Licensure       No public employer or professional licensing authority[i] may deny employment or licensure on the basis of the applicant’s criminal conviction unless the crime “directly relates” to the position or occupational license sought. Factors that an employer must consider to determine whether a crime “directly relates” to the position or license sought are: (1) the nature and seriousness of the crime; (2) the relationship between the crime and the purposes of regulating the position of public employment or occupation for which licensure is sought; (3) the relationship between the crime and the ability, capacity and fitness required to perform the duties of the position or occupation; and (4) the amount of time since the crime was committed.
  • Opportunity to Demonstrate Rehabilitation      For public employment, even if a crime is “directly related” to the position, the applicant has an opportunity to present “competent evidence of his sufficient rehabilitation and present fitness to perform the duties of employment.” The bills enumerate several types of evidence, including U.S. Department of Defense Form 214 indicating an honorable discharge or separation under honorable conditions following a criminal conviction, and a statement from a correctional institution at least one year after release showing compliance with all terms and conditions of probation or parole. The public employer must also consider other individualized assessment factors, including all circumstances surrounding the crime and conviction and the applicant’s age at the time the crime was committed.
  • Grievance Rights and Enforcement       Under the House bills, if an applicant for public employment or occupational licensure ultimately is denied based on his or her criminal history, the applicant may pursue a grievance process under the Administrative Procedures Act. In addition, violations of the “ban the box” provisions by private employers will be enforced by the South Carolina Human Affairs Commission through the imposition of monetary penalties.
  • Tax Incentives     Under S. 191, an employer is eligible for a state income tax credit for hiring a “qualified ex-felon” for certain threshold amounts of hours. A “qualified ex-felon” is an individual who was convicted of any felony codified under state law and if hired less than 2 years after release from prison, has not been convicted of another criminal offense. At this time, it is difficult to determine whether or when any of the bills will move forward during the Legislative Session, either in their current versions or modified. Although the bills are an attempt to further the goal of gainful employment of individuals with criminal histories, the bills as written appear to be an overreach into the discretion that an employer – whether public or private – exercises in the hiring process. The codification of an employer’s hiring processes and procedures, and the factors that the employer can – and importantly, cannot – take into consideration appear to impose a one-size-fits-all approach to hiring. What’s more, if the proposed requirements are passed primarily in the context of public employment, there is a risk that those requirements will be extended to private employers in the future.

[i]              Only the House bills address occupational licensing authorities.

Employers engaged in heavily-regulated businesses understand that compliance with a myriad of regulatory schemes is critical to their continued operations and their bottom line. HR professionals for these employers must ensure that they are aware of all applicable requirements related to prospective and current employee criminal background checks, especially those requirements affecting who can and cannot be hired.

In particular, long-term care facilities (i.e. assisted living facilities, nursing homes, and retirement communities), are subject to specific federal and state law requirements that prohibit them from hiring individuals with certain criminal histories to serve in certain positions. Compliance with these requirements affects whether the facility is permitted to operate in the state as well as whether the facility is paid for the care it provides to residents.

For example, as a condition to simply maintaining a state license to operate an assisted living facility in South Carolina, the facility cannot hire anyone who has ever been convicted of abuse, neglect, or exploitation of a child or vulnerable adult under South Carolina state law. In addition, if the facility wants to participate in the Medicaid Optional State Supplementation Program and receive reimbursement for certain services provided to its residents, then the applicable South Carolina Medicaid Provider Manual prohibits anyone from working in the facility who has been convicted of a felony within the last 10 years if that individual would provide “administrative support/services to SCDHHS participants.” Likewise, in order to obtain and keep a state license to operate a nursing home, the facility cannot hire anyone who has ever been convicted of “child or adult abuse, neglect, or mistreatment, or any other felony.” At the federal level, in order for a nursing home to participate in the Medicare Program and receive reimbursement for services provided to residents, it “must prohibit the employment of individuals with a conviction or prior employment history of child or client abuse, neglect or mistreatment.”

Even if these employers can maintain their licenses because none of their employees has the above-listed criminal history, it is important to note that South Carolina law also requires that criminal background checks be conducted for certain individuals, and employers are subject to civil penalties imposed by the South Carolina Department of Health and Environmental Control (SCDHEC) for failure to do so.   Specifically, “direct care entities” are required to conduct criminal background checks for prospective employees or contractors to work as “direct caregivers,” as defined below, pursuant to certain SCDHEC-specified procedures.

 

Direct Care Entities

Direct Caregivers

  • nursing homes
  • assisted living facilities
  • adult daycare facilities
  • home health agencies
  • hospice programs
  • in-home care providers (a/k/a private duty nursing)
  • psychiatric residential treatment facilities for children and adolescents
  • residential programs operated or contracted for operation by the South Carolina Department of Mental Health or Department of Disabilities and Special Needs

 

 

  • a registered nurse, licensed practical nurse, or certified nurse assistant;
  • any other licensed professional employed by or contracting with a direct care entity who provides to patients or clients direct care or services and includes, but is not limited to, a physical, speech, occupational, or respiratory care therapist;
  • a person who is not licensed but provides physical assistance or care to a patient or client served by a direct care entity;
  • a person employed by or under contract with a direct care entity who works within any building housing patients or clients;
  • a person employed by or under contract with by a direct care entity whose duties include the possibility of patient or client contact.

HR professionals should acknowledge that there may exist a “Catch-22” between complying with the above-cited requirements and avoiding Title VII liability if refusing to hire certain individuals based on state law prohibitions results in disparate treatment of or disparate impact on protected classes of individuals under Title VII (e.g., race, national origin, gender). Specifically, in its 2012 Enforcement Guidance entitled, “Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964,” the EEOC emphasized that criminal background check practices may have a disparate impact on, for example, African American and Hispanic men who have a statistically higher arrest and incarceration rate than other classes of individuals. Although the EEOC advised that an employer’s compliance with federal law prohibitions against hiring individuals with certain criminal histories will be recognized as an absolute defense to claims brought under Title VII, the EEOC refused to afford that same level of deference to state law prohibitions. See http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm.  Thus, despite the mandatory requirements of South Carolina-specific law identified above, these requirements may not provide employers with an absolute defense to allegations of Title VII discrimination based on a refusal to hire individuals with certain criminal histories.

Employers should be aware of absolute legal prohibitions against hiring individuals with certain criminal histories as well as any legal requirements to conduct criminal backgrounds checks regardless of their results. Although there is risk that state law prohibitions may not provide an absolute defense to any potential discrimination claims based on failure to hire, employers should still engage in efforts to preserve state law requirements as a defense. Therefore, employers are advised to ensure that their hiring practices related to absolute denials of employment based on state law requirements are tailored to those specific legal requirements and that they are applied consistently.