In deciding whether to hire an applicant, employers would not be allowed to consider crimes committed more than 10 years previously except for certain offenses: murder or attempted murder, arson, sex offenses that carried prison time and required an applicant to register as a sex offender, and terrorism.
Employers - who would be required to provide an applicant written notification of the reason for rescinding an offer - would be subject to civil fines of $500 to $7,500 for violating the regulations.
Supporters of the bill say it would protect those with criminal records from discrimination and help the economy by addressing unemployment.
"One of the greatest barriers to a second chance in New Jersey is a barrier to employment," Assemblywoman Bonnie Watson Coleman (D., Mercer), one of the bill's sponsors, said during Monday's hearing.
Coleman said the bill would ensure that job applicants receive fair treatment while also protecting businesses. Businesses with fewer than 15 employees would be exempt from the requirements, as would law enforcement agencies and fire departments.
Proponents said the bill would shield employers from lawsuits. Cornell Brooks, executive director of the New Jersey Institute for Social Justice, said he and others involved with the bill had worked for "months and months" with corporate lawyers to "ensure no undue risk" to businesses.
But business groups, including the New Jersey Chamber of Commerce and New Jersey Business and Industry Association, voiced concerns about liability while objecting to the regulations.
Michael Egenton, senior vice president of government relations for the chamber, proposed that lawmakers "ban the box" - referring to the section of a job application relating to criminal record - rather than limit an employer's ability to consider that information. He said other states have offered tax credits as an incentive to businesses to hire employees with records.
Egenton also questioned whether discrimination in hiring through applicant criminal records was an issue in New Jersey.
"We have not seen anything - strong reports or empirical data - to show this is indeed an ongoing problem," he said.
Brooks said one out of four American adults has a criminal record. He referenced research by a Princeton University sociologist that found that a white man with a criminal record was 50 percent less likely to get a callback for a job.
For a black man with a record, the callback rate dropped more, Brooks said. Job applicants with criminal histories face "nearly insurmountable barriers," he said.
In a Statehouse news conference, Assembly Minority Leader Jon Bramnick (R., Union) attacked the bill while criticizing Democratic priorities during the lame-duck session.
"As an employer, if you've got a violent past or serious criminal history, I think maybe they should know about it," Bramnick said.
He called the bill "a regulatory nightmare" for businesses.
Ten states have banned background checks at the start of the application process, according to the National Employment Law Project, which advocates policies benefiting lower-wage workers.