Steering around the Staffing Rapids

Navigating the legal landscape has always been challenging for employers in the contact center industry, but a wave of new laws affecting hiring and management practices will complicate matters further.

Handling these additional requirements introduces more challenges for centers as they struggle to recruit and retain employees amidst shrinking labor pools and the Great Resignation.

This article reviews new and emerging employment-related legislation, and the steps employers can take to comply.

First, societal attitudes towards marijuana have evolved, prompting a bevy of laws. The tension between jurisdictions creates unique challenges for companies operating in multiple locations.

Second, growing awareness of the deleterious impact implicit biases have on women and minorities has led to legislation addressing common employment practices, such as collecting salary and criminal histories.

Finally, new technologies combined with the transition to work-from-home (WFH) introduced new, unexpected issues for applicants, employees, and employers. Corporations’ responses to these issues have raised unforeseen privacy and fairness questions.

Governments at all levels are scrambling to keep pace with these changes by enacting laws and policies at a dizzying rate, creating numerous compliance-related challenges for companies.

Workplace Drug Testing

“Why is there such controversy about drug testing? I know plenty of guys who’d be willing to test any drug they can come up with.”
- George Carlin

Two issues in the early 1980s launched workplace drug testing. First, the U.S. military recognized a burgeoning drug problem during the Vietnam conflict. A 1973 study found that 42% of military personnel in Vietnam used an opioid at least once, with half of those dependent.

The military responded to the crisis by creating testing programs to identify and treat drug use. However, in 1981, after concluding marijuana use contributed to a plane crash that killed 14 people and damaged or destroyed 18 aircraft, the Department of Defense (DoD) authorized military branches to take punitive action against service members who tested positive for drug use.

Second, the President’s Commission on Organized Crime, established by President Ronald Reagan in 1983, concluded that drug trafficking was the most prominent and profitable organized criminal activity in the U.S.; the commission recommended that state and local agencies and private employers adopt drug testing.

Based on the commission’s findings, President Reagan issued Executive Order 12564 in 1986, establishing a drug-testing program for federal civilian employees, excluding postal workers. The private sector followed the public sector’s lead, resulting in wide-scale drug testing.

There is no single federal law regulating private sector drug testing in the U.S. The Drug-Free Workplace Act of 1988 demands federal contractors establish drug-free workplace policies, develop educational programs, and make employment conditional on remaining drug-free. Surprisingly, though, the act does not require drug testing.

However, government agencies may adopt drug-testing regulations for private-sector employers under their jurisdiction. For example, the Department of Transportation requires employees who work in private sector jobs involving the transportation of goods or people to complete drug testing. Similarly, the DoD requires contractors working in national security jobs to be drug-free.

With 37 states, four territories, and the District of Columbia legalizing medical or recreational marijuana in recent years, state-level drug testing laws are changing rapidly. Although I cannot review every state’s requirements in this article, the American Civil Liberties Union summarizes state-specific drug testing laws; the National Conference of State Legislatures describes state marijuana laws.

The courts often allow drug testing as a condition for employment...

Companies that administer drug tests to applicants or employees should prepare and follow a policy aligned with federal and state laws.

The courts often allow drug testing as a condition for employment, though employers can strengthen their case by demonstrating that testing aligns with job duties. The courts have also upheld drug testing in public safety, law enforcement, and national security jobs, though companies must consistently administer the programs.

Banning Salary History During the Application Process

At least 21 states and local governments have ratified laws that make it illegal to ask job applicants about their salary histories.

The driving force behind these laws is that pay inequality for women and minorities is a systemic issue and allowing employers to ask about past wages inadvertently perpetuates the problem.

Employers may struggle to navigate the piecemeal legal landscape. For example, state and local laws range from a ban against asking about or using salary history (e.g., Illinois) to allowing companies to ask about salary history but prohibiting retaliation against applicants who refuse to provide it (e.g., Alabama).

Complicating matters further are states, such as Michigan and Wisconsin, that enacted laws preventing legislatures from passing future laws restricting an employer’s ability to ask about salary history.

To comply with the evolving legal landscape, employers should revisit their recruiting and human resource practices. (The recommendations in the box that outlines Five Suggestions should help companies comply with state and local salary history laws).

“Ban the Box”: Elimination of Arrest and Conviction History

Criminal background checks may unintentionally discriminate against minority job applicants. 94% of companies conducted background checks on applicants to reduce liability and improve workplace safety in 2019.

However, since nearly 70 million people, or 27% of adults living in the U.S. have arrest or conviction records, background checks introduce stigma into the hiring process, creating a barrier to employment.

Department of Justice (DOJ) research shows that applicants with an arrest or conviction are 50% less likely to advance in the hiring process. Compounding matters is that 49% of Black versus 38% of white males have an arrest record by age 23.

The disproportionate number of Black applicants with arrest records amplifies the risk of discrimination, particularly in light of the DOJ’s finding that employers are twice as likely to callback or offer jobs to white applicants with arrests or convictions as Black applicants with arrests or convictions.

Yet such discrimination is counterproductive for employers. Preliminary research suggests that employees with criminal histories may outperform those without criminal histories. For example, a recent contact center study found that agents with criminal records had 10% longer tenure than employees without a criminal record.

A new stream of laws and policies, known as “Ban the Box,” gives applicants with a criminal history a fairer chance of getting jobs by moving background checks later into the hiring process.

For example, The Fair Chance Act prohibits federal agencies and contractors from requesting an applicant’s criminal history information before presenting a conditional offer of employment. At last count, 37 states and 150 cities have adopted ban-the-box policies, encompassing nearly 80% of the U.S. population. The Restoration of Rights Project provides a summary of state-level ban-the-box policies.

The Equal Employment Opportunity Commission (EEOC) published a guide to help employers use arrest and conviction records fairly; (a summary of the recommendations appears in the Employer Best Practices box). However, any employer should consult an attorney to ensure they comply with all applicable state and local laws when using arrest and conviction records.

Workplace Surveillance

“You had to live – did live, from habit that became instinct – in the assumption that every sound you made was overheard, and, except in darkness, every moment scrutinized.”
-George Orwell

The COVID-19 pandemic exposed corporations’ unpreparedness to handle the abrupt large-scale shift from office to remote work.

Four months after lockdowns began in the U.S., 70% of companies had adopted or planned to implement technology to track employee performance, protect sensitive data, and monitor policy compliance.

Most employers incorporated electronic surveillance – probably reflexively – to reduce their risk and liability when employees WFH. Although well-intended, these employee monitoring technologies introduced a wide range of privacy-related issues for companies and employees.

Employee monitoring technologies are entering the market at a surprising rate. Companies are adopting these new products, which Negrón refers to as “little tech,” with little scrutiny by companies. (The box on the Rise of Little Tech illustrates popular surveillance tools.)

One example of potentially invasive employee monitoring technology is video and audio recording.

An NBC report describes a global business processing outsourcer’s (BPO) program to install artificial intelligence (AI) -driven video and audio monitoring on WFH employees’ devices. The workers’ contracts allows the BPO to track and store data about the employees and their family members, including minors.

Complicating matters further is that 31% of American WFH employees use their bedrooms as their offices; the percentage of workers who use a bedroom as an office is likely higher in near- and offshore locations.

U.S. employers have broad latitude to monitor employee behavior while using companies’ equipment and networks. Courts have upheld an employer’s right to monitor employees when an explicit policy exists, though specific requirements vary by jurisdiction.

...employees who give consent lose their rights...

However, U.S. law generally prohibits companies from accessing an employee’s private password-protected accounts without express permission, regardless of whether the employee used a personal or company-owned device. At least 27 states have passed laws to prevent employers from requesting social media login information to safeguard employees further.

A summary of several relevant federal and state laws appears in the box about them on employee monitoring. Despite the number of legislatures enacting workplace privacy laws, employees who give consent lose their rights, a point not lost on employers that may use their power to influence workers.

While state and federal governments try to catch up with surveillance technology in the workplace, employees are left to endure at least three significant consequences.

First, monitoring technologies increase psychological strain, resulting in poorer performance and higher turnover.

Second, tracking employees opens the door to worker exploitation, according to Negrón, through wage suppression and collusion.

Finally, it is difficult – and becoming more critical – for workers to disconnect, especially when employees rely on personal and employer-owned devices.

Employer-sponsored surveillance is generally well-intended, but it has uncovered many legal and ethical privacy-related issues that will dramatically alter the future of work.

Artificial Intelligence and Automated Decision Making

Corporate thirst for faster, more accurate ways to improve employment-related decisions, including hiring and promotion, launched a data-driven technological revolution.

Many big data and AI companies captured businesses’ and the media’s imagination by painting a vivid picture of a world where self-learning, “objective” algorithms that draw on massive data stores would dramatically improve hiring accuracy.

Unsurprisingly, though, the promise of a panacea for one of the biggest problems facing companies – talent – soon encountered regulatory and legislative headwinds due to bias and ambiguity over how the tools operate.

One of the most sobering lessons AI recruitment solutions have taught us is that the algorithms don’t always like people because of their race, age, gender, or disability.

Due to the risks of using these technologies, private organizations, federal agencies, and state and local governments are taking steps to protect applicants and employees from discriminatory practices. The National Conference of State Legislatures summarizes the ever-changing state laws.

AI technology is not inherently discriminatory. The unfairness generated by some AI algorithms reflects implicit biases in the data used to build the predictive models.

For example, the longstanding pay differential favoring white men over equally educated, qualified, and performing women and minorities means inquiries about previous wages can perpetuate discriminatory pay practices; biased data produce biased outcomes.

Employers and regulators are taking steps to combat the risks of AI-based decision-making.

The Data & Trust Alliance (DTA), for example, is a consortium of 23 corporations committed to the responsible use of data and intelligent systems. In December 2021, DTA adopted criteria to reduce bias in recruiting, development, and compensation; the alliance published safeguards to help companies evaluate vendors’ products and solutions more objectively.

Similarly, the EEOC announced an initiative to study AI-related technologies’ impact and how to use them responsibly in November 2021. (The box on the Responsible Use Of AI Tools presents recommendations employers can use to evaluate these solutions and reduce bias; the suggestions partially reflect The Data & Trust Alliance guidelines).

Americans with Disabilities Act

Although not a new or emerging issue, the Americans with Disabilities Act (ADA) is a far-reaching equal opportunity law that ensures people with a disability experience the same opportunities as those without a disability.

The ADA covers anyone with “a physical or mental impairment that substantially limits one or more major life activities, a person who has a history or record of such an impairment, or a person who is perceived by others as having such an impairment.”

The ADA encompasses employment, state/local government, public accommodations, commercial facilities, transportation, and telecommunications. (The boxes on Employer Tips and on Require Medical Exams summarizes ways to help adhere to the ADA).

Final Thoughts

The flood of legislative issues and new technologies impacting applicants, employees, and employers are changing how businesses operate in four critical ways.

First, the tension between federal, state, and local laws on marijuana – medically or recreationally – creates ambiguity for employees and employers. Navigating the patchwork of legislation is becoming increasingly difficult for companies with operations in multiple jurisdictions.

Second, greater recognition of the impact implicit biases have on women and minorities has sparked a wave of legislation to combat systemic issues. Laws targeting salary and criminal histories hold the potential to create more equitable opportunities for people who may have been unintentionally disadvantaged by “traditional” hiring practices.

Third, corporations looking for ways to reduce risks and manage WFH employees adopt technologies that sometimes create benefits at the expense of privacy. Federal, state, and local governments are attempting to enact laws and policies to protect workers’ rights to privacy as traditional barriers to work and home fade.

Finally, the ADA aims to ensure everyone experiences the same opportunities, regardless of whether one has an impairment or not. One of the most comprehensive pieces of equal opportunity legislation on record, the ADA outlines specific steps companies must take to guarantee fair treatment for individuals with a disability.

Each of the laws reviewed in this article, though unique, attempts to protect individual freedoms and the right to privacy in a rapidly changing employment environment.