It’s already hard enough for California employers to keep track of and comply with the myriad federal and state background check laws. There’s California’s Investigative Consumer Reporting Agencies Act (ICRAA), California Labor Code Section 1024.5, California’s Consumer Credit Reporting Agencies Act (CCRAA), and the federal Fair Credit Reporting Act (FCRA) to name a few. The City of San Francisco is piling on. Say hello to the amendments to the San Francisco Police Code, Article 49, and Administrative Code, Article 12, which restrict an employer’s use of criminal records. San Francisco’s Mayor signed off on (enacted) the new rules on February 14, 2014 – a sweet Valentine’s Day gift from the Mayor. The new rules go into effect on August 13, 2014.

The changes to the Police Code and Administrative Code are very similar. The Administrative Code changes primarily apply to businesses that have certain minimum dollar value contracts with the City of San Francisco and subcontractors, including “any person or entity who enters into an agreement with any Subcontractor for the performance of 10 percent or more of any Subcontract.” The restrictions “only apply to a Contractor’s or Subcontractor’s operations to the extent those operations are in furtherance of performing a Contract or Property Contract with the City” with some narrow exceptions and waivers. This post will instead focus on the Article 49 Police Code changes.

Will my business need to comply? Yes, if your business is located or doing business in the City of San Francisco and employs at least 20 employees, including owners, managers, and supervisors, in our outside of the City. The new rules also cover every single type of employment, paid or unpaid, you can think of, as long as the location for the employment or prospective employment is in whole, or in substantial part, within the City of San Francisco (Section 4903).

So what can’t my business do? Good question. For example, under Section 4904 of Article 49 of the San Francisco Police Code, employers cannot ask, inquire, or consider (for employees and applicants):

  1. An Arrest not leading to a Conviction, excepting under circumstances identified in this Section as an Unresolved Arrest;
  2. Participation in or completion of a diversion or a deferral of judgment program;
  3. A Conviction that has been judicially dismissed, expunged, voided, invalidated, or otherwise rendered inoperative, by way of example but not limitation, under California Penal Code sections 1203.4, 1203.4a, or 1203.41;
  4. A Conviction or any other determination or adjudication in the juvenile justice system, or information regarding a matter considered in or processed through the juvenile justice system; or
  5. A Conviction that is more than seven years old, the date of Conviction being the date of sentencing; or (6) Information pertaining to an offense other than a felony or misdemeanor, such as an infraction.

There are some exceptions to these restrictions, like when these types of inquiries are required by federal or state law or a government agency implementing federal or state law.

But wait, there’s more, much more. While the San Francisco Board of Supervisors’ findings, associated with the new rules state that an employer is not required to give preference to or hire an unqualified person with an arrest or conviction record, and an employer can still hire the most qualified and appropriate candidates, employers still have certain and very specific obligations when making employment decisions based on a conviction history. For example, if you use background checks to get criminal conviction histories, you are going to need to first provide the employee or applicant with a specific notice (Section 4905(b)), which, thankfully, the Office of Labor Standards Enforcement (OLSE) will provide to employers. And you still need to comply with the notice and authorization requirements of the ICRAA and FCRA for these background checks. There are also posting and job advertisement requirements (Section 4904). And no new rules like these would be complete without the requisite non-retaliation and record retention provisions (Sections 4908 and 4910).

What happens if I screw this up? The OLSE and the City Attorney can enforce the new rules. The City Attorney can initiate a civil action, and if it prevails can obtain “legal or equitable relief as may be appropriate to remedy the violation including, but not limited to: reinstatement; back pay; the payment of benefits or pay unlawfully withheld; the payment of an additional sum as liquidated damages in the amount of $50.00 to each employee, applicant or other person whose rights under this Article were violated for each day such violation continued or was permitted to continue; appropriate injunctive relief; and, further shall be awarded reasonable attorney’s fees and costs” (Section 4909(b)).

Don’t panic. It’s going to be okay. These new rules are relatively consistent with the current related federal and state laws that employers already need to comply with, but they do create more administrative headaches, including tracking compliance. It will be important for affected businesses to take steps to ensure that these rules are followed and implemented on a consistent basis, e.g. training, revision of employment and recruiting documents and applications, updating job postings and advertisements, etc. Get together with your human resources personnel and your employment counsel and discuss what these new requirements mean for your business and how to cost effectively and efficiently comply.