California background checks should be conducted with extreme care because California has a unique set of rules.

“The rules in California go beyond the other 49 states.” Lester S. Rosen confirmed in a recent CER webinar. They also go beyond the restrictions imposed by the federal Fair Credit Reporting Act (FCRA). And it’s important to follow California’s rules to the letter, since applicants can sue for up to $10,000 for any violation—even if there were no damages and it was just a technical error.

California background checks: What rules are different?

First of all, employers need to understand what rules apply and what agencies are involved in regulating California background checks:

• The California Investigative Consumer Reporting Agencies Act (ICRA) is similar to, but different from, FCRA.
• Other regulations come directly from the California Labor Code.
• Regulations from the California Department for Fair Employment and Housing (FEHA) also limit some things that employers can and can’t ask.

Here are some of the differences for California employers to consider:

In California, all background checks are considered to be Investigative Consumer Reports (ICR). This is a different term than FCRA uses. In fact, the term investigative consumer report is also used at the federal level, but is distinct from other consumer reports; in California, all consumer reports are called investigative consumer reports, which can be confusing.

There are special rules for notice and disclosure.These include:

• There is a special checkbox that allows the applicant to ask for a copy of the report being obtained and the employer must give it. There is also a second checkbox to use if the employer obtains public records directly instead of via a reporting agency.
• “There are special California rules for the Consent and Disclosure forms. Only in California [do they] require the name, address and phone number of the background firm—no place else.” Rosen advised.
• Consent is needed before each ICR.
• There is a requirement to provide a Spanish language form if requested.

There is a 7-year limit on the use of criminal records, which holds unless a longer time frame is required (typically under a separate government regulation) for specific roles. However, the math is tricky – it depends in part when they got out of jail, not when the crime was committed, and this is tougher to tell in public records.

California is a “No Arrest” state (but a pending case can be reported). This means that employers cannot use arrest records to take adverse employment action, and should not ask for such information.

There are significant limitations on the use of databases. “California, very critically – and this is one of the biggest reasons that California background checks tend to be much more accurate than the rest of the country – has a special rule (opposed to the federal rule) that says that information that’s given to an employer must be verified as being complete and up-to-date as of the time of the report.” Rosen advised.

“What that means, essentially, is that if a firm is operating under a California rule . . . [it] cannot simply report stale data or use a database. It has to be information that is complete and up-to-date. Which, typically can only be done by re-verification at the courthouse.”

This differs significant from the FCRA rules. Under FCRA you can either re-verify or give notice to an employer that a person appeared in a database as long as the person in question receives notification that their name has appeared—which gives the applicant the chance to object if the information is incorrect. California does not allow that option.

The above information is excerpted from the webinar “Background Checks in California: How To Comply with the EEOC’s Recently Issued Enforcement Guidance.” To register for a future webinar, visit CER webinars.

Lester S. Rosen, the founder and CEO of Employment Screening Resources, is a consultant, writer, and frequent presenter nationwide on pre-employment screening and safe hiring issues.