On March 24, 2016, the Austin City Council passed a “ban-the-box” ordinance, the Fair Chance Hiring Ordinance, which took effect on April 4, 2016. The final version of the ordinance was released on April 12, 2016. It prohibits covered employers from inquiring about an individual’s criminal history information, including running background checks, until after a conditional offer of employment has been made. 

Covered employers are defined by the ordinance as employers (including staffing agencies) with at least 15 individuals who primarily work in Austin for each working day for 20 or more calendar weeks in the current or preceding calendar year. The ban-the-box ordinance applies to both employees and independent contractors. Federal, state, and local governments and agencies are exempt from the ordinance, as are bona fide private membership clubs (other than labor organizations) that are tax exempt under Internal Revenue Code section 501(c). Additionally, the prohibitions of the ordinance do not apply to jobs for which a federal, state, or local law, or compliance with a legally mandated insurance or bond requirement, disqualifies a person based on his or her criminal history.   

For jobs covered by the ordinance, employers may not state in a job posting that an individual’s criminal history disqualifies him or her from employment consideration. Before extending a conditional offer of employment, an employer may not:

• inquire about an applicant’s criminal history on an employment application;
• solicit or consider criminal history information about an individual; or
• disqualify an individual for not disclosing criminal history information.

When an employer receives criminal history information about an individual being considered for employment, it must conduct what the ordinance describes as “an individualized assessment” to determine whether the individual is unsuitable for the job before making an adverse employment decision. Austin’s individualized assessment is similar to the U.S. Equal Employment Opportunity Commission’s (EEOC) 2012 three-factor screening process (which is different from the EEOC's individualized assessment) and requires an evaluation of the following:

1. the nature and gravity of any offenses in the individual’s criminal history;
2. the length of time since the offense occurred and the sentence was completed; and
3. the nature and duties of the job for which the individual applied.

If an employer takes adverse action based on an individual’s criminal history, it must inform the individual in writing that the adverse action was based on his or her criminal history. This provision of the Austin ordinance does not impose more extensive requirements than the federal Fair Credit Reporting Act. The ordinance prohibits retaliation for reporting a violation.

While the ordinance does not provide individuals with a private civil right of action, individuals may report violations to the City of Austin Equal Employment and Fair Housing Office. Individuals must bring their complaints under the ordinance within 90 days of discovering an alleged violation and within one year of the date of the violation. Employers that fail to cease a violation of the law within 10 business days of receiving written notice from the city are subject to a civil penalty of up to $500 per violation. However, administrative penalties against employers will not be assessed before April 4, 2017; until then, the city’s Equal Employment and Fair Housing Office will only issue written warnings. 

The Austin Fair Chance Hiring Ordinance and other background check laws, as well as all federal and state background check requirements, are summarized in the firm’s O-D Comply: Background Checks and O-D Comply: Employment Applications subscription materials, which are updated and provided to O-D Comply subscribers as the law changes.