This past month, Maryland joined Illinois, Washington, Oregon, and Hawaii by passing new legislation limiting employers' use of credit checks in the hiring process. The next day, Philadelphia became the newest city to enact Ban the Box legislation.

CREDIT CHECKS - MARYLAND
On April 12, Maryland Governor Martin O'Malley signed the Job Applicant Fairness Act, prohibiting most employers from using credit information for decisions regarding employees or applicants. The law goes into effect October 1 leaving 25 other states with similar legislation still pending in the 2011 legislative session.

According to the Job Applicant Fairness Act, financial institutions and employers required under the law to check credit history are exempt from the Act. There are also exceptions for employers who need to request credit information pertaining to employees that handle the finances or confidential duties of the company.

BAN THE BOX - PHILADELPHIA
Just a day later on April 13, Philadelphia Mayor Michael Nutter signed Bill No. 110111-A, enacting the Fair Criminal Record Screening Standards Act in the city of Philadelphia. The law establishes new provisions for employers' use of criminal history in the hiring process including a "Ban the Box" rule, which prohibits employers from inquiring about criminal history on employment applications. In addition, employers are restricted from questioning charges or arrests that are no longer pending and that did not result in convictions.

Effective July 12, the law prohibits both public and private employers with more than 10 employees from inquiring about an applicant's criminal history until after the application is accepted and after the first telephone or in-person interview is conducted. Proponents say the intent is to encourage employers to fully consider all qualified candidates and to prevent early elimination of qualified candidates that may ultimately have a discriminatory impact.

Ban the Box legislation is rising in popularity and has already been enacted in some form on the state-wide level in California, Connecticut, Hawaii, Massachusetts, Minnesota, and New Mexico. With a number of cities enforcing the laws as well, Philadelphia has become the first major city government to cover public as well as private employers.

WHAT DOES IT MEAN TO YOU?
It is important to point out that the Philadelphia law and others like it only delay the time frame for criminal inquiries and the use of criminal record information. Employers may still inquire about criminal history after the initial interview and are still encouraged to conduct necessary background checks and criminal history checks on applicants for the safety of their employees and corporate environment, but also to protect themselves from potential negligent hiring litigation caused by hiring high-risk candidates without performing an appropriate background check.

Maintaining compliance during the hiring process is crucial, so employers should always be conscious of current state and local laws relating to criminal record and credit report use. OPENonline will continue to provide updates on the continuously-changing landscape of employment law as it pertains to your background screening process.