The real estate industry and the people employed in it build and maintain communities that fuel domestic growth. Naturally, employers in the real estate industry want to know that their employees are reliable and trustworthy. Therefore, employers take measures such as conducting background checks to ensure that one hire is not negligent and liable.
Background checks have been the traditional means of ensuring quality hiring. Background checks are regulated by the Fair Credit Reporting Act, which imposes specific requirements on employers and background check companies. For example, requesting permission, providing independent disclosure forms to employees and job applicants before requesting a background check report, and potential liability for non-compliance.
In light of ongoing labor shortages and ever-changing legal requirements, employers in all areas of the real estate industry are responding to changing hiring standards and standards. In some cases, employers relax previous standards as obsolete, or in response to requests from state and local agencies to be more lenient in selecting candidates. In contrast, at least one state has enacted legislation requiring enhanced background screening of employees for certain segments of the real estate industry. Regardless of how employers decide to conduct background checks, the following recent legal developments should be kept in mind.
“Ban the Box” Laws Enacted in States and Cities
“Ban the box” laws (or “Fair Chance Acts”) restrict employers’ access to pre-criminal offers for job seekers. These laws generally require employers to consider qualifications first when considering an applicant’s employment qualifications. Various states and even some local governments have enacted their own requirements. Therefore, multi-state employers should be careful to check the requirements, if any, of state or local laws before conducting background her screening. With many employers now hiring nationally in response to labor shortages, employers should be aware of the laws of the state in which they are hiring.
Additionally, the federal Fair Chance Act, effective December 20, 2021, requires only a post-offer background check. Federal contractors must comply with that requirement.
Employers who make employment decisions based on criminal record are required to conduct an individual evaluation if necessary (this step is required in certain jurisdictions). The Equal Employment Opportunity Commission (EEOC) has issued guidance to assist employers in this regard.
Balancing all these considerations, employers must protect against potential liability in the form of negligent employment and retention claims. Negligence hiring and retention claims scrutinize an employer’s hiring and employment practices and attempt to hold an employer accountable for an employee’s harmful conduct, and an attempt by the employer to punish the employee. that could be dangerous or otherwise harm others if they did not take reasonable steps to ensure that the employee was not an employee when hiring and retaining them;
In the real estate industry, in most cases, employers coordinate the interests of employees, businesses and third parties. “Ban the box” laws and the potential for negligent hire and retention claims further complicate this balancing act.
Changes to Marijuana Drug Screening Guidelines
It’s been almost a decade since Colorado and Washington became the first states to legalize recreational cannabis use. Many other states have followed suit since then. Additionally, the U.S. House of Representatives passed the Marijuana Opportunity Reinvestment and Cancellation Act (MORE Act) on April 1, 2022. The MORE Act aims to decriminalize cannabis use nationwide and remove cannabis from the federal schedule of controlled substances. In July 2022, the U.S. Senate released its own bill, the Cannabis Control and Opportunity Act, to decriminalize marijuana.
Whether or not these proposed federal laws are enacted, the legal landscape governing cannabis use has changed significantly over the past decade and is likely to continue to do so. For example, some states that have relaxed cannabis regulations have enacted laws prohibiting discrimination against employees and job applicants on the basis of their legal use of cannabis for both medical and recreational purposes. As states continue to legalize or ease restrictions on cannabis use, employers in the real estate industry are taking precautions, state and local authorities controlling cannabis use in relation to drugs and background checks and treatment of job applicants. make sure you understand the laws of Failure to do so may expose employers to discrimination, failure to respond, and claims for retaliation. In contrast, employers must balance the risks created by their employees (for example, Persons in positions of safety concern) use cannabis and may expose employers to other liability claims.
equal employment opportunity
Employers must take proactive steps to ensure that their employment practices comply with federal, state, and local equal employment opportunity laws, especially as they relate to criminal records. In the past, the EEOC has noted that even if employers have legitimate work-related reasons to conduct background checks, such practices tend to affect protected classes of job seekers differently. Employers should review existing policies to ensure that they do not unduly adversely affect certain classes of people, even if they are ostensibly neutral. , should minimize the risk of allegations of discrimination. For example, some automated screening processes using artificial intelligence can inadvertently produce disproportionate results in recruitment and require careful design and review. Such results, though unintentional, may be perceived as discriminatory. Additionally, the inconsistent application of these policies and practices, such as making exceptions for some applicants and employees and not others, may create additional liability issues. .
Employers should carefully consider the impact their policies may have on applicants to avoid unintentionally different results when considering and making hiring decisions based on an applicant’s background. should be monitored.
Jackson Lewis PC © 2022National Law Review, Vol. XII, No. 221