California is only one of 34 states that have ban-the-box laws. While this article deals with California-specific interactions between ban-the-box laws and the Fair Credit Reporting Act (FCRA), it provides a useful lesson for any employer who deals with similar issues.
California is rife with regulation of how employers may obtain and consider background check information for use in hiring and personnel decisions. The state’s ban-the-box law and the Los Angeles and San Francisco ordinances and amendments to the California Labor Code set strict rules on when and how employers can consider criminal history in employment.
Before 2014, when San Francisco enacted a citywide ban-the-box law, criminal history background checks were largely unregulated in California, except for a handful of Labor Code provisions that barred consideration of certain types of criminal records. Los Angeles and the state of California have now joined San Francisco with their own ban-the-box laws, which markedly differ from San Francisco’s.
This article highlights the laws concerning criminal history background check reports in California, after briefly discussing the decades-old federal Fair Credit Reporting Act (FCRA). It’s important for California employers to understand the basics of all laws affecting employment screening programs and determine what changes to policies, forms, and practices will ensure compliance and reduce the risk of claims.
Generally speaking, before obtaining a consumer report (aka a “background check report”)—which may include criminal or credit history from a third-party background check company (“consumer reporting agency” or CRA)—the employer must make a clear and conspicuous written disclosure to the applicant or employee in a separate document that a background check may be conducted. California’s fair credit reporting statute also requires a separate, standalone disclosure that can’t be combined with the FCRA disclosure.
The candidate must provide written consent for the employer to obtain a background check report. There are other requirements for “investigative consumer reports” (those based on interviews with the individual’s friends, neighbors, and associates) and employers regulated by the Department of Transportation.
Before an employer relies in whole or part on a background check report to take an “adverse action” (e.g., rescinding a conditional job offer or discharging an employee), it must provide the individual with a “pre-adverse action” notice and include a copy of the report and the Consumer Financial Protection Bureau’s Summary of Rights. The notice gives the individual an opportunity to discuss the report with the employer before it takes an adverse action.
Once the employer is prepared to take the adverse action, it must give the individual an adverse action notice containing certain FCRA-mandated text.
California employers that rely on criminal history information for employment purposes also must consider state and local laws imposing additional compliance obligations, regardless of whether the information is obtained from a CRA.
State, Local Ban-The-Box Laws Restrict Use of Criminal History
California’s statewide ban-the-box law requires employers with five or more employees (subject to few exceptions) to follow certain procedures when requesting and using criminal history information for prehire purposes. Specifically, regardless of the source of the criminal history information, employers must do the following:
- Wait until after a conditional job offer before inquiring about criminal history, which means asking applicants directly whether they have been convicted of a crime, ordering a criminal history background check, or making any other inquiry about their criminal history.
- Conduct an individualized assessment of an applicant’s conviction to determine whether it has a “direct and adverse relationship with the specific duties of the job that justify denying the applicant the position.” Unlike the Los Angeles ban-the-box ordinance (discussed below), the California law doesn’t require employers to provide the applicant with their assessment.
- Notify the applicant of any potential adverse action based on the conviction history. The notice must identify the conviction, include a copy of any conviction history report (regardless of the source), and state the deadline for the applicant to provide additional information, such as evidence of inaccuracy, rehabilitation, or other mitigating circumstances.
- After waiting the requisite time period, notify the applicant of any final adverse action, any existing procedure the applicant has to challenge the decision or request reconsideration, and the individual’s right to file a complaint with the California Department of Fair Employment and Housing.
In contrast to the FCRA preadverse and adverse action notices—required only if the adverse decision is based on information obtained from a background check report provided by a CRA—the California notices are mandated even if the employer doesn’t order criminal background check reports from a CRA but learns of the criminal history from a different source (such as an applicant’s self-disclosure).
Substantively, a wide range of criminal records are off-limits to California employers (unless they qualify for very narrow exceptions identified in the Labor Code). Records that can’t be used are:
- Arrests that didn’t lead to a conviction;
- Nonfelony marijuana convictions that are older than two years;
- Juvenile records; and
- Diversions and deferrals.
Although complying with the California law can be challenging, employers that hire in the cities of Los Angeles and San Francisco also must look to the ban-the-box ordinances in those jurisdictions, which exceed the requirements found in the FCRA and the state’s ban-the-box law.
LA Fair Chance Ordinance
The Los Angeles ordinance goes beyond the state of California’s requirements by imposing the following steps on employers when considering criminal history (regardless of the source):
- Perform a written assessment that “effectively links the specific aspects of the applicant’s criminal history with risks inherent in the duties of the employment position sought by the applicant.” The assessment form containing the relevant factors can be found on the city’s website.
- Provide the applicant with a “fair chance process” allowing the opportunity to offer information or documentation the employer should consider before making a final decision, including evidence the criminal record is inaccurate, proof of rehabilitation, or other mitigating factors. As part of the process, the employer must include with the preadverse action notice a copy of the written assessment and any other information supporting the proposed adverse action.
- Wait at least five business days to take an adverse action or fill the position. If the applicant provides additional information or documentation, the employer must consider it and perform a written reassessment, which is at the bottom of the form mentioned above. If the employer still decides to take action against the applicant, it must notify the individual and attach a copy of the reassessment with the adverse action notice.
Los Angeles also requires all solicitations and advertisements for city opportunities to state the employer will consider qualified candidates with criminal histories in a manner consistent with the law. The city also has certain notice posting requirements.
San Francisco’s Fair Chance Ordinance
In addition to any California requirements, employers with five or more employees working in San Francisco that intend to inquire about and consider criminal history (regardless of the source) must provide the applicant or employee with a copy of the Office of Labor Standards Enforcement’s (OLSE) Fair Chance Act Notice before inquiring about criminal history or ordering a criminal history background check. The city also has certain notice posting requirements.
Covered San Francisco employers are barred from considering the following types of criminal records (even though the records aren’t off-limits in other California cities), subject to narrow exceptions:
- Convictions that are older than seven years (measured from the date of sentencing); and
- Any conviction arising out of conduct that has been decriminalized since the date of the conviction measured from the date of sentencing (which would include convictions for certain marijuana and cannabis offenses).
Employers in California will want to conduct (privileged) assessments to strengthen their compliance with the myriad laws regulating the use of an individual’s criminal history.