New Jersey layers several of its own rules on top of the federal Fair Credit Reporting Act (FCRA), and an employer that only follows the federal steps can still run into a state violation. The state regulates when a criminal history question can be asked, how job ads can be worded, how cannabis use factors into hiring and discipline, and how expunged or sealed records are supposed to be treated. None of this replaces the FCRA disclosure, authorization, and adverse action process. It sits alongside it. This guide walks through the main New Jersey statutes that employers with any operations or applicants in the state generally need to know, with links to the primary sources rather than summaries of summaries.
The Opportunity to Compete Act: New Jersey’s ban the box law
New Jersey’s version of a ban the box law is the Opportunity to Compete Act, codified at N.J.S.A. 34:6B-11 to 19. The act applies to any employer with 15 or more employees over 20 calendar weeks that does business, employs people, or takes applications for employment in New Jersey, and the statute’s definition of employer expressly includes job placement and referral agencies and other employment agencies acting on a client’s behalf.
Under the act, a covered employer generally may not require an applicant to complete an application that asks about criminal history, and may not ask about criminal history orally or in writing, during what the statute calls the initial employment application process. That process runs from the first inquiry between the applicant and employer about the job until the employer has conducted a first interview, whether in person or by any other method such as a phone or video screen. Once the first interview has happened, an employer may ask about criminal history. If an applicant volunteers criminal history information earlier in the process on their own, the employer may then discuss it.
The law also restricts job advertising. A covered employer may not knowingly publish an ad that explicitly states people with an arrest or conviction will not be considered. That restriction does not apply to law enforcement, corrections, judiciary, homeland security, or emergency management postings, or to any position where a background check is already required by law or where a conviction could legally disqualify the applicant. Ads can still list legitimate qualifications, such as a required license or a minimum level of experience.
The Opportunity to Compete Act also addresses expunged records directly: an employer may decline to hire someone based on a criminal record, but not based on a record that has been expunged or erased through executive pardon. Local governments in New Jersey are barred from passing their own, separate criminal history hiring ordinances, since the state law preempts them except for rules that regulate a municipality’s own internal operations.
Violations carry a civil penalty collectible by the Commissioner of Labor and Workforce Development, starting at up to 1,000 dollars for a first violation and rising for repeat violations. The statute does not create a private right of action, meaning an applicant generally cannot sue an employer directly under this specific law, though other claims may still be available depending on the facts.
New Jersey background screening laws at a glance
| Law | What it covers | Who it generally applies to |
|---|---|---|
| Opportunity to Compete Act, N.J.S.A. 34:6B-11 to 19 | Timing of criminal history questions, job ad wording, expunged record treatment | Employers, including staffing and referral agencies, with 15 or more employees over 20 weeks |
| CREAMMA employment provisions, C.24:6I-52 | Adverse action limits tied to cannabis use, drug test and physical evaluation requirements | Employers with employees or applicants in New Jersey |
| Clean Slate Act, C.2C:52-5.3 | Petition based and, once implemented, automatic expungement of eligible convictions | Applies to what a background check can lawfully surface, not just employers directly |
| Federal FCRA, enforced through CFPB Regulation V and FTC and EEOC guidance | Disclosure, authorization, and adverse action process for any consumer report | Any employer that orders a background check through a consumer reporting agency |
Cannabis, CREAMMA, and workplace testing
New Jersey’s cannabis law, the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA), was enacted as P.L. 2021, c.16, with its employer provisions codified at C.24:6I-52. Under that section, an employer generally may not refuse to hire, fire, or take another adverse action against someone solely because that person does or does not use cannabis items, or solely because of the presence of cannabinoid metabolites in a bodily fluid sample, when the underlying conduct is otherwise permitted under the law. Employers keep the right to maintain a drug and alcohol free workplace and to prohibit use or impairment during work hours, and the law does not require an employer to accommodate use, possession, or impairment on the job.
Where CREAMMA gets more technical is workplace testing. If an employer orders a drug test based on reasonable suspicion of impairment, observable signs of intoxication, a workplace accident, or as part of routine or pre-employment screening, the statute calls for the test to combine a scientific method, such as blood, urine, or saliva testing, with a physical evaluation of impairment performed by someone with the required certification. The law directs the state’s Cannabis Regulatory Commission, working with the Police Training Commission, to set standards for that certification, described in the statute as a Workplace Impairment Recognition Expert, or WIRE. The commission’s own guidance, published at nj.gov/cannabis, currently frames this in practice around in house or contracted drug recognition experts who can evaluate someone who appears impaired at work or who was involved in a workplace accident. Employers that rely on impairment based testing should confirm current commission guidance before finalizing a testing policy, since certification standards in this area have continued to develop since the law passed.
Medical cannabis raises a related but separate question under New Jersey’s Jake Honig Compassionate Use Medical Cannabis Act, which the Cannabis Regulatory Commission also references on the same guidance page. Employers evaluating how a registered patient’s cannabis use interacts with a drug free workplace policy should treat that as a distinct compliance question and may want to consult counsel given the interaction with disability accommodation law.
Expungement and the Clean Slate law
New Jersey has expanded how criminal records can be cleared from public view. The Clean Slate Act, enacted as P.L. 2019, c.269 and codified in part at C.2C:52-5.3, created a path for a person to petition a court for expungement of most convictions after a set crime free period has passed, and directed the state to eventually build an automated process that renders eligible convictions inaccessible to the public without requiring a petition at all. The statute measures the waiting period from whichever comes latest among the conviction date, completion of any financial obligations, completion of probation or parole, or release from incarceration.
For employers, the practical point is the one already built into the Opportunity to Compete Act: a record that has been expunged, sealed under Clean Slate, or erased through executive pardon should not be a permitted basis for a hiring decision. A background check that surfaces a record that should have been expunged does not change that legal treatment, and employers should have a process for handling that scenario if it comes up, rather than treating the report as the final word.
Credit history and other consumer report considerations
Some states place specific limits on when an employer can use a credit report in a hiring decision, and those rules differ significantly from state to state. Employers with New Jersey operations should confirm the current status of any state specific credit history rule before pulling a credit report as part of screening, since these rules are amended periodically and vary in scope. What does not vary is the federal layer: a credit report used for employment purposes is a consumer report under the FCRA, which the Consumer Financial Protection Bureau’s Regulation V implements, and the same standalone disclosure, signed authorization, and pre-adverse and adverse action notice steps apply regardless of whether the report is a criminal history check, a credit report, or another type of background screening.
The Equal Employment Opportunity Commission has also cautioned that using credit history or criminal history as a blanket screening filter can raise disparate impact concerns under Title VII if the criteria are not tied to the specific job, a point covered in the EEOC’s own background check guidance. Limiting credit checks to roles where financial responsibility is genuinely job related, such as positions with cash handling or financial authority, is a common way employers manage that risk.
How the FCRA framework still applies
Nothing in New Jersey’s state laws removes the baseline federal process. Before ordering a background check, an employer needs to give the applicant a clear, standalone disclosure that a consumer report may be obtained, separate from the job application itself, and get written authorization. If the employer is considering an adverse decision based on the report, it must send a pre-adverse action notice with a copy of the report and the Summary of Rights, allow a reasonable opportunity to respond, and only then send a final adverse action notice if it proceeds. The Federal Trade Commission’s guidance on using consumer reports walks through each of these steps in plain terms. New Jersey’s rules layer on top of this process. They do not substitute for it.
Background checks in New Jersey do not automatically reveal every past arrest or conviction. What typically appears on a report depends on the type of search performed, the record’s disposition, whether it has been expunged or sealed, and state reporting rules that can limit how far back certain information may be reported. Employers should not assume a check will surface a specific record, and applicants should not assume a record will stay hidden. The safest approach is to rely on what a properly conducted, FCRA compliant report actually returns rather than assumptions in either direction.
Frequently asked questions
Does the Opportunity to Compete Act apply to every New Jersey employer?
No. It generally applies to employers with 15 or more employees over 20 calendar weeks that do business or take job applications in New Jersey, which includes staffing and referral agencies acting for a client employer. Smaller employers fall outside the statute’s specific threshold, though the FCRA and other laws may still apply.
When can a New Jersey employer ask about an applicant’s criminal history?
Generally, a covered employer may not ask about criminal history on the application or in interviews until after the first interview has taken place, unless the applicant volunteers the information earlier or an exception applies, such as law enforcement, corrections, or a position where a background check is already required by law.
Can a New Jersey employer take action against an employee for using cannabis outside of work?
Under CREAMMA, an employer generally may not take an adverse action solely because an employee uses cannabis items or has cannabinoid metabolites present, when the underlying conduct is legal. Employers may still enforce a drug and alcohol free workplace and address impairment or use during work hours, and testing that relies on a physical impairment evaluation is expected to follow the certification framework the law describes.
Do expunged or Clean Slate sealed records show up on a background check?
They are not supposed to be part of the public record once expunged, sealed, or erased through pardon, and the Opportunity to Compete Act specifically bars using an expunged or pardoned record as a basis to decline to hire someone. State law and reporting practices can vary, so employers should treat any such record they encounter according to its proper legal status rather than at face value.
Does New Jersey restrict employer credit checks?
Rules on employer use of credit history vary by state and can change, so employers should confirm the current status of any state specific limit before relying on a credit report in a hiring decision. Regardless of state rules, any credit report used for employment is a consumer report under the federal FCRA and requires the standard disclosure and authorization process.
Does the federal FCRA still apply on top of New Jersey law?
Yes. New Jersey’s statutes add requirements about timing, advertising, cannabis, and expungement, but they do not replace the FCRA’s standalone disclosure, signed authorization, and pre-adverse and adverse action notice process, which applies to any employer using a consumer report in New Jersey or elsewhere.
Related reading: Ban the Box and Fair Chance Hiring Laws: An Employer Guide and Marijuana Convictions and Background Checks: What Employers Need to Know cover related ground in more depth. For FCRA compliant screening built for employers who need to move quickly without cutting corners, visit Reveal Background.
This article is for general informational purposes only and is not legal advice. Employers should consult qualified counsel about how these laws apply to their specific situation.
