Employers have faced increasing pressure over the past few years to keep up with a rapidly shifting compliance landscape. In addition to federal regulations, state and local governments are introducing a growing number of laws to protect workers' rights and ensure fair employment practices. This trend has made compliance more complex, particularly for businesses that operate across multiple states. Employers must now be more vigilant than ever to avoid costly fines and legal consequences that come with non-compliance.
State-Specific Regulations and Their Impact on Employers
Traditionally, compliance challenges have stemmed from laws related to criminal background checks, such as "Ban the Box" initiatives, and marijuana legalization. However, newer regulations focusing on issues like data privacy, wage transparency, and artificial intelligence (AI) usage in hiring processes are adding more layers to the compliance puzzle. Employers who fail to adhere to these evolving standards could face significant penalties, especially as states ramp up their enforcement efforts.
The consequences of non-compliance can be severe. Several states have created agencies tasked with enforcing these laws, and the financial penalties are becoming more substantial. For example, in Washington D.C., a 2019 enforcement of the Ban the Box law resulted in fines totaling $500,000. The majority of violations were due to employers including criminal history questions on job applications, highlighting the importance of adhering to these laws from the very first step of the hiring process.
Joint Federal and State Efforts on Data Protection
In addition to individual state actions, there are growing collaborations between federal and state authorities to enforce data protection laws. One notable example is the partnership between the Federal Communications Commission (FCC) and the attorneys general of Connecticut, Illinois, New York, and Pennsylvania. This first-ever partnership, announced in December 2023, aims to enhance enforcement of data privacy and cybersecurity regulations. These joint efforts are a clear signal that both state and federal governments are prioritizing consumer protection and are willing to work together to hold employers accountable for any lapses in compliance.
State-Level Examples of Enforcement Actions
California, known for its stringent employment laws, recently filed a lawsuit against a popular grocery store chain for violating the state’s Fair Chance Act. This law restricts employers from inquiring about an applicant’s criminal history before making a conditional job offer. The lawsuit accuses the grocery chain of unlawfully denying employment to candidates based on irrelevant criminal backgrounds, in violation of the law. This case serves as a stark reminder of the risks employers face if they do not comply with state-specific regulations.
New Jersey has also demonstrated its commitment to enforcing compliance through its Fair Chance Housing Act, which mirrors employment laws by preventing housing providers from asking about criminal histories. In 2022, the state issued 30 notices of violation to landlords for asking prohibited questions on rental applications. These violations resulted in fines of up to $10,000 for repeat offenders.
Another example is Colorado’s enforcement of its Wage Transparency Law, one of the most rigorous in the country. The state’s Department of Labor and Employment has fined multiple companies for failing to include salary ranges in job listings, issuing more than 200 compliance notices to employers. As wage transparency becomes a growing priority, it’s clear that non-compliance could result in significant financial penalties.
Staying Ahead of Compliance Challenges
As the examples above show, states are taking employer compliance very seriously. To avoid penalties and legal battles, employers need to take a proactive approach to monitoring legislative changes and ensuring their hiring and employment practices align with state and local laws. Key strategies include:
- Conducting regular reviews of application and interview processes
- Staying informed about updates in employment and data privacy regulations
- Collaborating with legal counsel or compliance experts to ensure adherence to all applicable laws
How Can DISA Help?
Compliance is not optional; employers must remain vigilant and proactive to stay ahead of these growing threats. DISA Global Solutions offers comprehensive support to help employers navigate the ever-changing compliance landscape for background screening. DISA’s industry expertise provides legally compliant background checks, ensures adherence to evolving regulations like Ban the Box and Fair Chance Acts, and offers expert guidance on data privacy and wage transparency laws. In addition, DISA assists with developing compliant hiring policies, conducts regular audits, and provides training to keep HR teams up-to-date on the latest legal requirements. By partnering with DISA, businesses can focus on their core operations, confident that their compliance needs are expertly managed.
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About DISA Global Solutions
Founded in 1986, DISA is the industry-leading provider of employee screening and compliance services. Headquartered in Houston, with more than 35 offices throughout North America and Europe, DISA’s comprehensive scope of services includes drug and alcohol testing, background screening, occupational health, and transportation compliance. DISA assists employers in making informed staffing decisions while building a culture of safety in their workplace.