Effective January 1, 2018 California employers can no longer ask an applicant for employment to disclose information about criminal convictions.  The new law (added as Section 12952 to the Government Code) applies to employers with 5 or more employees.  Once an offer of employment has been made, employers can conduct criminal history background checks, but only when the conviction history has a “direct and adverse relationship with the specific duties of the job,” and requires certain disclosures to the applicant if employment is denied based on the background check.  This Friday’s Five covers five areas of the new law that California employers should be aware of when hiring employees:

1. Employers may not include on any application for employment “any questions that seeks the disclosure of an applicant’s conviction history.”

2. Employers may not inquire into or consider this conviction history of the applicant, including any inquiry about conviction history on any employment application, until after the employer has made a conditional offer of employment to the applicant.

3. Employers can only research certain areas of an applicant’s background after a conditional offer has been made.

Employers may not “consider, distribute, or disseminate information” relating to any of the following areas when conducting a conviction history background check:

(A) Arrest not followed by conviction, except in some limited circumstances set forth in Labor Code section 432.7.

(B) Referral to or participation in a pretrial or posttrial diversion program.

(C) Convictions that have been sealed, dismissed, expunged, or statutorily eradicated pursuant to law.

4. If an employer intends to deny employment based on the applicant’s conviction history, it must make an “individualized assessment” if the conviction history “has a direct and adverse relationship with the specific duties of the job.

In making his determination, the employer shall consider all of the following:

(i) The nature and gravity of the offense or conduct.

(ii) The time that has passed since the offense or conduct and completion of the sentence.

(iii) The nature of the job held or sought.

The employer is not required to record these results of this individualized assessment in writing. However, employers that are governed by local city and county background checks must be careful to follow those requirements as well.  For example, Los Angeles’ ordinance requires that employers provide this assessment in writing to applicants. 

5. If the employer preliminary disqualifies the applicant based on a conviction history, the employer is required to provide written notice to the applicant.

The notice must contain all of the following items:

(A) Notice of the disqualifying conviction or convictions that are the basis for the preliminary decision to rescind the offer.

(B) A copy of the conviction history report, if any.

(C) An explanation of the applicant’s right to respond to the notice of the employer’s preliminary decision before that decision becomes final and the deadline by which to respond. The explanation shall inform the applicant that the response may include submission of evidence challenging the accuracy of the conviction history report that is the basis for rescinding the offer, evidence of rehabilitation or mitigating circumstances, or both.

The applicant then has five business days to respond to the notice before the employer makes a final decision.  If the employee responds within this time limit, and states that they dispute the accuracy of the conviction history report and is in the process of obtaining evidence to support their position, the applicant will have an extra five business days to respond.  The employer must consider the information provided by the applicant before making a final decision.

If the employer makes a final decision denying the applicant employment solely or in part because of the applicant’s conviction history, the employer is required to provide a second written notice to the applicant containing the following:

(A) The final denial or disqualification. The employer may, but is not required to, justify or explain the employer’s reasoning for making the final denial or disqualification.

(B) Any existing procedure the employer has for the applicant to challenge the decision or request reconsideration.

(C) The right to file a complaint with the Department of Fair Employment and Housing.

In addition to this new law, California employers need to be sure they are in compliance with the Federal Fair Credit Reporting Act (FCRA) and the California Investigative Consumer Reporting Agencies Act (ICRAA) when conducting any background checks.

LA City HallLos Angeles City begins enforcement on July 1, 2017 of its Fair Chance Initiative for Hiring Ordinance that prohibits employers from seeking criminal background information prior to offering a job to applicants.  The ordinance was effective in January 2017, but to give employers time to become compliant with the new hiring prohibitions, the City delayed enforcement until July 1.  This Friday’s Five discusses five issues Los Angeles City employers need to understand prior to the July 1 deadline:

1. Employers are prohibited from inquiring into a job applicant’s criminal history until a conditional offer of employment has been made.

Employers cannot conduct any “direct or indirect” activity to gather criminal history from or about any applicant using any form of communication, including on application forms, interviews or Criminal History Reports.  This includes searching the internet for information pertaining to the applicant’s criminal history.

2. Review the Fair Chance Initiative for Hiring Ordinance Guideline for Employers

The City published a flow-chart setting out a guideline for employers to follow to comply with the Ordinance [update: the City has since removed this flow-chart from its website – for additional information, see updated links below].

Employers should review the Ordinance, and if they will be conducting background checks make sure to implementing processes to meet the requirements of the Ordinance.

3. Post the notice to applicants and employees and ensure documents are retained for three years.

Employers are required to post a notice informing applicants of the law at each workplace, job site or other location in the City of Los Angeles under the employer’s control and visited by the applicants.

In addition, employers are required to retain applications and related information for three years.

4. Develop a process to comply with ordinance if revoking conditional offer based on criminal history report.

The City published a sample notice to rescind employment offer that employers can utilize to comply with the Ordinance after an employee’s criminal history background check reveals information that may allow the employer to revoke the conditional offer of employment.  The sample letter can be downloaded here.

The City also published an individual assessment and reassessment form for employers to use in conducting the required review of whether the employee’s criminal history is job-related and can be used to revoke the offer of employment.  Employers should review this document, understand the required steps to comply with these requirements, and seek help from qualified employment lawyers if/when this assessment must be done in making a determination of whether to revoke a job.

5. Place disclosures in all job-wanted ads to ensure compliance with ordinance.

The Ordinance requires that employers state “in all solicitations or advertisements seeking Applicants for Employment that the Employer will consider for employment qualified Applicants with Criminal Histories in a manner consistent with the requirements of this article.”

The City has proposed the following sample language to comply with this requirement:

We will consider for employment all qualified Applicants, including those with Criminal Histories, in a manner consistent with the requirements of applicable state and local laws , including the City of Los Angeles’ Fair Chance Initiative for Hiring Ordinance.

It is important to remember that this requirement applies to all online advertisements and solicitations.

Employers should review the City’s website for more information as well as the City’s Frequently Asked Questions.

Mayor Garcetti signed into law the “Los Angeles Fair Chance Initiative for Hiring” ordinance on December 7, 2016.  The law takes effect January 22, 2017.  The Mayor’s holiday gift to employers leaves only a couple of weeks to them to change applications and hiring processes to comply with the new ordinance.  This Friday’s Five lists five aspects of the ordinance employers operating in the City need to understand:

1. New law applies to employers with 10 or more employees.

The new law applies to any individual, firm, corporation, partnership, labor organization, group of persons, association, or other organization however organized, that is located or doing business in the City of Los Angeles and employs ten or more employees.  The owners, management, and supervisory employees are counted when determining if the employer has ten employees.

Employers cannot inquirer into criminal backgrounds of applicants until after a conditional offer of employment is made.

2. The ordinance limits employers’ ability to gather information about applicants’ criminal history.

Employers cannot conduct any “direct or indirect” activity to gather criminal history from or about any applicant using any form of communication, including on application forms, interviews or Criminal History Reports.  This includes searching the internet for information pertaining to the applicant’s criminal history.

3. Employers must revise applications to remove any questions seeking information about criminal history.

The ordinance provides: “An Employer shall not include on any application for Employment any question that seeks the disclosure of an Applicant’s Criminal History.”

4. Employers must comply with stringent notice and written obligations if employment is not offered to applicant based on their criminal history.

Employers can require disclosure of an applicant’s criminal history only after a conditional offer of employment has been made.  The only condition on the offer of employment can be the review of the applicant’s criminal background.  There cannot be any other conditions on the offer.

If the conditional offer is made, but employment is denied, employer must perform “written assessment that effectively links the specific aspects of the Applicant’s Criminal History with risks inherent in the duties” of the job.  In conducting the assessment, employers must consider the factors set forth by the U.S. Equal Employment Opportunity Commission and other factors set out by the City.

Prior to taking any adverse employment action against the applicant, employers are required to provide a “Fair Chance Process,” which includes a written notification of the proposed adverse action, a copy of the written assessment performed by the employer, and any other information or documents supporting the employer’s action.  The employer then must wait at least 5 business days for employee to provide additional information.  If the applicant provides additional information, the employer then must perform a written reassessment of the adverse action.  If the employer continues with the adverse action, it must provide the applicant with the written reassessment.

The process has many requirements employers must be careful to follow, and it is recommended that employers relying upon an applicant’s criminal background to deny employment should seek legal counsel to ensure compliance with the ordinance.

5. Employers’ other requirements to comply with the law

Some other obligations the ordinance creates for employers:

  • Employers “[s]hall state in all solicitations or advertisements… that the Employer will consider for employment qualified Applicants with Criminal Histories in a manner consistent with the requirements of this article.”
  • Post a notice informing applicants of the law at each workplace, job site or other location in the City of Los Angeles under the employer’s control and visited by the applicants.
  • Employers must retain applications and related information for three years.

Happy Friday!

Generally, California employers must comply with the following rules governing whether they may obtain criminal history information when conducting background checks for applicants or employees:

  1. Employers cannot consider prior arrests not leading to conviction in employment decisions.
  2. Employers cannot seek information or rely on information pertaining to referral to diversion programs.
  3. California prohibits employers from relying on information about expunged or sealed records.
  4. Employers cannot collect or rely on information about misdemeanor convictions for marijuana possession more than two years old.
  5. Employers may consider arrests for which the applicant is waiting for trail, and convictions.

In regards to item number 5, employers must be aware that California’s Fair Employment & Housing Council has proposed regulations that could make employer’s use of any criminal history in the employment context if the use of the information would “have an adverse impact on individuals on a basis protected by the Act, including, but not limited to, gender, race, and national origin.”  Employers would be prohibited from using criminal information in employment decisions if it would create an adverse impact on individuals and the employer cannot demonstrate that the criminal history is job-related with business necessity or if the employee can show that there is a less discriminatory means of achieving the business necessity.  The Council is considering written comments about this proposed regulation from any interested party until April 7, 2016.  Comments can be submitted by e-mail to FEHCouncil@dfeh.ca.gov.

Employers must also be aware of their local ordinances, such as those in San Francisco, that create additional prohibitions, Federal requirements and the changing legal landscape in this area.