0 comments on “Job Applicant’s Criminal Conviction: When Can it be a Reason to Deny Employment?”

Job Applicant’s Criminal Conviction: When Can it be a Reason to Deny Employment?

By Leonard Brazil 

Effective April 1, 2016, California Regulation 11017.1 was amended to further limit an employer’s policy to consider criminal convictions in rejecting a job applicant or take adverse employment action against an existing employee.  The amended regulation arose out of the California Legislature’s concern that reliance on criminal convictions has had a disproportionate and adverse impact on individuals on the basis of their gender, race, national origin or other protected classification.

Certain Criminal History Excluded from Consideration:  The following types of criminal history cannot be considered by an employer or requested of an applicant or employee:

  • An arrest or detention that did not result in a conviction;
  • Referral to or participation in a pre-trial or post-trial diversion program;
  • A conviction that has been judicially dismissed or ordered sealed, expunged or statutorily eradicated pursuant to applicable law; and
  • A non-felony conviction for possession of marijuana that is two or more years old.

Limitations on Employer Policies Regarding Other Criminal Convictions:  If an employer has a policy to rely on other criminal convictions in deciding whether to hire an applicant or take adverse employment action against an employee (e.g., deny a promotion), the company must be able to demonstrate the policy is job related, consistent with business necessity and appropriately tailored.  The amended regulation states that to satisfy this criteria, the policy must take into account at least the following factors:

  • The nature and gravity of the offense or conduct;
  • The time that has passed since the offense or conduct occurred and/or the completion of the sentence; and
  • The nature of the job held or sought.

The amended regulation indicates that if an employer has a “bright-line,” across the board policy that a criminal conviction disqualifies an applicant or employee, the employer must satisfy a very high standard to demonstrate that such a rigid policy is appropriately tailored  Alternatively, an employer who conducts an individualized assessment of the qualifications of the applicant or employee and the circumstances surrounding the criminal conviction in deciding whether to rely upon the conviction will typically find it easier to demonstrate that the policy is appropriately tailored.

For example, if a person applies to be a delivery driver, a criminal conviction for theft a year ago may be an improper basis to deny employment because it is not job-related, consistent with business necessity or appropriately tailored.  However, if the criminal conviction were vehicular manslaughter for driving under the influence, denial of employment would likely be deemed to be job-related, consistent with business necessity and appropriately tailored.  Yet, if that conviction were 20 years old, the decision to not hire the applicant may not be appropriately tailored because of the passage of time from the conviction to the application for employment.

Employer Notice of Reliance on Criminal Conviction:  If an employer refuses to hire an applicant or takes adverse employment action against an employee based on a conviction obtained through a third-party background report or employer generated internal report, the employer must notify the person of the disqualifying conviction and provide a reasonable opportunity for the individual to present evidence that the criminal conviction information is inaccurate.  If it is established that the employer has inaccurate information, the criminal history cannot be considered in the employment decision.

What You Should Do

  1. Ensure that your criminal conviction policy is (i) job-related, (ii) consistent with business necessity and (iii) appropriately tailored.
  1. Review your job application form to ensure it does not inquire about:

(a)        An arrest not leading to a conviction;

(b)        Referral to or participation in a pre-trial or post-trial diversion program;

(c)        A conviction that has been judicially dismissed or ordered sealed, expunged or statutorily eradicated pursuant to applicable law; or

(d)        A non-felony conviction for possession of marijuana that is two or more years old.

An application that states “Have you ever been convicted of a felony?” might be deemed a violation of the amended regulation because it would cause an applicant to answer “yes” even if the conviction had been expunged.

  1. Educate those involved in the hiring process regarding the new limitations and requirements related to criminal convictions.

Thank you for joining us on ClarkTalk!  We look forward to seeing you again on this forum.  Please note that the views expressed in the above blog post do not constitute legal advice and are not intended to substitute the need for an attorney to represent your interests relating to the subject matter covered by the blog.  You should certainly consult legal counsel of your choice when considering this or any other employment issue.  If you wish to consult with the author of this post or another attorney at Clark & Trevithick, please contact Debbie Petito dpetito@clarktrev.com or Leonard Brazil lbrazil@clarktrev.com by email at or telephonically by calling the author at (213) 629-5700.

0 comments on “Can I Use My Spouse’s Estate Tax Credits? What is Portability and Why Does It Matter to Me?”

Can I Use My Spouse’s Estate Tax Credits? What is Portability and Why Does It Matter to Me?

By Tiffany A. Halimi 

Have you had an estate plan check-up recently?  If you or a client of yours has not had your trust reviewed by an estate planning attorney recently, your trust may be structured in a way that may be more complicated and cost your surviving spouse and your beneficiaries more than what might be necessary.

Current Transfer Tax Exemptions:

In 2016, each individual has a $5.45M exemption from federal transfer tax that they can apply to transfers of assets made during life or upon death.  Any transfer made in excess of the exemption will result in a 40% transfer tax (also known as an “estate tax” for transfers at death or “gift tax” for transfers during life).  A married couple can apply both spouses’ $5.45M exemption towards their joint estate, for a total exemption amount of $10.9M.

As of this year, an individual can transfer up to $14,000 to any number of recipients without using any of their gift or estate transfer tax exemption.  However, any transfers in a calendar year that exceed $14,000 to the same individual will result in the using of a person’s lifetime transfer tax exemption.

Prior to 2010, an individual’s exemption was personal to that individual  — either they would use it during life or use it at their death.  Either way, their exemption could not be transferred to any other individual’s use, not even their spouse.

Because an individual’s exemption needed to be used upon their death, at the very latest, in order for a married couple to take advantage of using their joint exemption amount, they would need to establish a trust with subtrusts.  The subtrusts may have required a separate tax identification number for each subtrust, a separate tax return filed annually and care by the surviving spouse  not comingle assets between the subtrusts.

Portability is Changing the Way Individuals Can Take Advantage of Their Spouse’s Unused Exemptions.

A concept called “portability” was adopted effective January 1, 2010 and made permanent by the 2012 American Taxpayer Relief Act.  With portability,  the surviving spouse can use the deceased spouse’s unused exemption against the surviving spouse’s future gift or estate taxes.  This allows trusts to be more simply constructed, as the surviving spouse can utilize the entire unused exemption amount of the deceased spouse without necessarily creating a subtrust (often called a Bypass Trust, Credit Shelter Trust or Exemption Trust).

Today, spouses can enjoy the simplicity and flexibility of just one trust while still taking advantage of their joint transfer tax exemption through the use of portability.

This structure has advantages and disadvantages that should be discussed in detail with your estate planning attorney to determine if it is compatible for your situation.

Thank you for joining us on ClarkTalk!  We look forward to seeing you again on this forum.  Please note that the views expressed in the above blog post do not constitute legal advice and are not intended to substitute the need for an attorney to represent your interests relating to the subject matter covered by the blog.  You should certainly consult legal counsel of your choice when considering this or any other trust and estate issue.  If you wish to consult with the author of this post, please contact Tiffany Halimi by email at thalimi@clarktrev.com or telephonically by calling her at (213) 629-5700.

Circular 230 Disclaimer: To comply with IRS requirements, please be advised that, any tax advice contained in this article is not intended or written to be used, and cannot be used, by the recipient to avoid any federal tax penalty that may be imposed on the recipient, or to promote, market or recommend to another any referenced entity, investment plan or arrangement. For more information, please go to www.ClarkTrev.com

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