Seasonal Hiring Concerns: How Pay Transparency, Privacy, and AI Laws Still Apply

Quick Hits

• It may be a mistake to assume that state and federal laws governing pay transparency, privacy, background checks, and the use of AI do not apply to seasonal hires.
• The variation in state laws can complicate compliance efforts for multistate employers.

Job Listings

The requirements of pay transparency laws can vary significantly by state and locality, often requiring employers to disclose a wage range in all job postings, regardless of whether a position is seasonal or permanent. Currently, fourteen states and the District of Columbia have enacted such pay transparency laws.

Data Privacy

It is important for employers to adhere to the relevant state privacy laws. While some states’ privacy laws do not cover the data collected by employers on job applicants and employees, California’s law does. In California, employers must provide a privacy notice at the point of data collection of job applicant data; allow individuals to access and correct their data; and permit individuals to opt out of the sharing or sale of their data.

Background Checks and Obtaining Required Documentation

Although the demands of the season might create pressure to “fast-track” the hiring process, neglecting to conduct compliant background checks can increase legal risk—ranging from potential negligent hiring liability to exposure related to the laws governing what can and cannot be asked during the hiring process. Moving too fast could also lead to unintended violations of immigration laws or child labor laws, especially if proper documentation is not obtained.

Generally, employers must obtain consent before conducting a criminal background check on a job applicant. Several states and cities prohibit employers from asking about criminal histories on initial job applications. In such jurisdictions, employers may be required to wait until after extending a job offer to initiate a background check.

Artificial Intelligence

Employers occasionally leverage AI to streamline the hiring process by screening job applications, evaluating skills through gamified tests, and scheduling follow-up interviews. This approach can prove to be an efficient method for recruiting a sufficient workforce during the busy season.

As companies increasingly rely on AI, including algorithms and automated decision-making tools to facilitate hiring decisions, they may inadvertently risk violating state and federal antidiscrimination laws, particularly under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, and the Americans with Disabilities Act. Certain state laws require human involvement and oversight in hiring decisions to prevent discrimination based on age, race, gender, disability, or other protected characteristics. These laws typically apply whether the job opening is seasonal or permanent.

Next Steps

Amid the flurry of seasonal hiring, employers must not presume that laws governing pay transparency, data privacy, background checks, and the use of artificial intelligence are inapplicable to seasonal employees. It is prudent for employers to review and update their hiring policies and practices, ensuring that managers are thoroughly trained on recent changes to state laws. This diligence can help to mitigate the risk of claims or enforcement related to discrimination, immigration violations, child labor violations, negligent hiring, or other liability.

Ogletree Deakins will continue to monitor developments and will provide updates on the Background Checks, Cybersecurity and Privacy, Employment Law, Hospitality, Pay Equity, Retail, and Technology blogs as additional information becomes available.

Further information is available in the Ogletree Deakins Client Portal under the Background Checks topic. (Full law summaries are available for Premium-level subscribers; Snapshots and Updates are available for all registered client-users.) For more information on the Client Portal or a Client Portal subscription, please reach out to clientportal@ogletree.com.

Brandon R. Sher is a shareholder in Ogletree Deakins’ Philadelphia office.

R. Scott DeLuca is of counsel in Ogletree Deakins’ Buffalo office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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