Is your business in compliance with new state laws on paid leave, background checks?

As an employer, one of the toughest things to address is compliance with a patchwork of different laws at the local, state and federal levels. This year is no exception, with the topics of paid leave and criminal background checks coming to the fore in several states. 

As outlined below, a number of states have enacted new laws pertaining to leave and background checks. Meanwhile, several other states are reviewing similar legislation, so it’s important for employers not to become complacent.

Paid leave

There is no federal law in the U.S. guaranteeing paid family and medical leave. Over the past year, conservative-leaning legislators in states like New Hampshire, Vermont and Virginia have championed voluntary paid leave options.

However, in 11 states — California, Colorado, Connecticut, Delaware, Massachusetts, Maryland, New Jersey, New York, Oregon, Rhode Island and Washington — most private sector employees are covered by state-run, mandated paid family and medical leave programs that are funded by payroll deductions.

In 2023, new paid leave laws have taken effect in:

Colorado. On Jan. 1, 2023, Colorado’s paid Family and Medical Leave Insurance took effect. Premiums are set to 0.9% of the employee’s wage, with 0.45% paid by the employer and 0.45% paid by the employee. Premium increases are capped at 1.2%.

Small employers with 9 or fewer employees aren’t mandated to cover the employer share of premiums. Benefits will begin to be paid out in Colorado on Jan. 1, 2024.

Oregon. On Jan. 1, 2023, Oregon’s new Paid Leave Oregon took effect. The contribution rate is set to 1% of gross wages for 2023, split between employers and employees at 40% and 60%, respectively. 

Oregon’s law affects employers with 25 or more employees. Benefits start to be paid out on Sept. 3, 2023.

States considering paid leave laws

Private employers in Michigan and Minnesota are both expecting state-sponsored paid family leave plans to be announced in 2023. In December 2022, a study panel established by the Maine state legislature prepared its final recommendations for a paid leave program.

In October 2022, a similar study panel established by the New Mexico state legislature prepared its report and recommendations for a paid leave program. 

Criminal background checks

The U.S. Equal Employment Opportunity Commission allows employers to inquire about an applicant’s or employee’s background, or to demand that a background check be done, with some exceptions related to medical and genetic information. But employers are not allowed to conduct background checks, or use the data gathered from them, in a way that intentionally or unlawfully “denies equal employment opportunity to anyone on a protected basis.”

Before performing a criminal background check using a third-party vendor or consumer reporting agency, employers must also be sure they adhere to certain notification requirements of the federal Fair Credit Reporting Act.

That said, an array of states and municipalities have recently passed ban-the-box legislation prohibiting employers from inquiring about a job candidate’s criminal background during the early stage of a job application.

States with new or amended criminal background check laws taking effect in 2023

Arizona. Senate Bill 1294 allows individuals to petition to seal case records related to certain criminal offenses.

California. Assembly Bill 1270 offers “fair chance hiring” for individuals with criminal convictions on their record and who want to work in the caregiving or home health care industry. Senate Bill 1093 enables candidates for home health care licenses to submit requests for transfers of criminal record clearance online and does away with the requirement that the applicant provide a government issued identification document. 

Senate Bill 731 modifies the penal code to automatically erase criminal records for individuals convicted of crimes on or after January 1, 2005, provided they have fulfilled all the terms and conditions of their sentences and haven’t been convicted of another crime for a period of four years. Effective July 1, 2023, the law provides that some felony criminal records be automatically sealed, including arrests that do not end in conviction. 

Connecticut. Public Act No. 21-32, the “clean slate” law, provides for the automatic erasure of certain criminal records for individuals with misdemeanors and low-level felony records. Employers are prohibited from requiring applicants with erased criminal records to disclose them or denying employment based on an applicant’s erased criminal record, with certain exceptions.

Michigan. Expanding the state’s “clean slate” law, beginning April 2023, MCL 780.621g establishes automatic expungement of certain convictions. Up to two felony convictions may be automatically erased 10 years after the sentencing date or upon the release of the offender; up to four misdemeanor offenses will be automatically erased seven years after sentencing.

Looking ahead

Ban-the-box measures that prohibit employees from inquiring into applicants’ criminal history and/or expunge certain criminal records altogether continue to be a hot topic among legislatures around the country. At the same time, there is a growing call nationwide for paid family and medical leave, and state legislators are expected to continue to introduce measures in response.

For employers wrestling with the ever-changing compliance landscape that such state laws present, HR outsourcing services can help. Instead of manually checking off boxes, outsourced HR professionals manage compliance so business owners feel confident and can focus on revenue-generating activities. 

Want more? In addition to HR, benefits, recruiting and payroll through its PeopleOps, Escalon’s Essential Business Services include FinOps (CFO services, taxes, bookkeeping and accounting) and Risk (business insurance). Talk to an expert today.