Seyfarth Synopsis: California’s ban-the-box law strictly regulates how employers may obtain and consider background check information when hiring and making personnel decisions. What’s more, Los Angeles and San Francisco have their own ban-the-box ordinances. These ordinances and the California Labor Code create a patchwork of rules that put employers at risk when checking whether an applicant has a criminal record. Here are some tips on when and how may consider criminal histories in employment while avoiding liability themselves.

Before 2014, when San Francisco enacted a city-wide 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. Then, Los Angeles and the State of California joined San Francisco with their own ban-the-box laws, which markedly differ from San Francisco’s.

This blog highlights the substantive rules restricting what criminal records can be considered as well as the procedural steps employers must take if they intend to reject an applicant or dismiss an employee with a criminal record. Our blog discussing the process for ordering the background check in the first instance can be found here. As litigation against employers in this space continues to skyrocket, it is critical that California employers 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.

How Does an Employer Know If a Criminal Record is Disqualifying?

Employers no longer can reject job applicants or discharge employees simply because they have a criminal record. More and more laws now require employers to carefully evaluate the criminal record and assess whether it relates to the position.

California’s statewide ban-the-box law (Gov’t Code § 12952) requires employers with five or more employees (subject to few exceptions) to 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.” The Los Angeles ordinance requires that as part of the assessment the employer consider the following factors, taken from the Equal Employment Opportunity Commission’s guidance:

  • the facts or circumstances surrounding the offense or conduct;
  • the number of offenses for which the individual was convicted;
  • age at the time of conviction or release from prison;
  • evidence that the individual performed the same type of work, post-conviction, with the same or a different employer, with no known incidents of criminal conduct;
  • the length and consistency of employment history before and after the offense or conduct;
  • rehabilitation efforts, e.g., education and training;
  • employment or character references and any other information regarding fitness for the particular position; and
  • whether the individual is bonded under a federal, state, or local bonding program.

Unlike the Los Angeles ban-the-box ordinance, the California law does not require employers to provide the applicant with their assessment.

A wide range of criminal records are off-limits to California employers (unless the employer qualifies for very narrow exceptions identified in the Labor Code). Records that cannot be used are:

  • arrests that did not lead to a conviction;
  • non-felony marijuana convictions that are older than two years;
  • juvenile records; and
  • diversions and deferrals.

In San Francisco, covered employers are barred from considering a separate group of criminal records, even though these records are not off-limits in other California cities. These include (i) infractions, (ii) convictions that are older than seven years (measured from the date of sentencing), and (iii) any conviction that arises 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).

What Steps Must Employers Take to Disqualify Applicants with a Criminal Record?

Once an employer decides that a criminal record is potentially disqualifying, the minefield of potential hazards grows. At the federal level, the Fair Credit Reporting Act mandates a highly technical notice process. First, before an employer relies on a background check report to take an “adverse action” (e.g., rescinding a conditional job offer or discharging an employee), the employer must provide the individual with a “pre-adverse action” notice, and include with it a copy of the report and the Consumer Financial Protection Bureau’s Summary of Rights. This notice gives the individual an opportunity to discuss the report with the employer before the adverse action. Then, once the employer is prepared to take the adverse action, it must give the individual an “adverse action” notice, containing certain FCRA-mandated text.

In California, employers that rely on criminal information for employment purposes must also consider state and local laws. Statewide, employers that believe a criminal record is disqualifying must do the following:

  • 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, of any existing procedure the applicant has to challenge the decision or request reconsideration, and of the applicant’s right to file a complaint with the Department of Fair Employment and Housing.

California goes beyond the FCRA. FCRA notices are required only if an adverse decision is based on information obtained from a background check company (“consumer reporting agency).” California requires notices no matter where or how the employer learns of the criminal history (i.e., applicant self-disclosure, Google, etc.).

In addition, for jobs in the City of Los Angeles, the city’s ordinance imposes the following onerous steps on employers who have considered 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 that contains the relevant factors can be found on the city’s website.
  • Provide the applicant a “Fair Chance Process”—giving the applicant an opportunity to provide information or documentation the employer should consider before making a final decision, including evidence that the criminal record is inaccurate, or evidence of rehabilitation or other mitigating factors. As part of this process, the employer must include with the pre-adverse action notice a copy of the written assessment and any other information supporting the employer’s proposed adverse action.
  • Wait at least five business days to take adverse action or fill the position. If the applicant provides additional information or documentation, the employer must consider the new information and perform a written reassessment, which is at the bottom of the form mentioned above. If the employer still decides to take adverse action against the applicant, the employer must notify the candidate and attach a copy of the reassessment with the adverse action notice.

California Workplace Solutions

Class actions against employers for failing to follow hyper-technical requirements for background checks have come to dominate the news. Employers in California and elsewhere will want to conduct (privileged) assessments to strengthen their compliance with the myriad laws that regulate use of an individual’s criminal history. Suggested next steps include:

  • Assess coverage under the California, Los Angeles, and San Francisco ban-the-box laws.
  • Review job advertisements and postings both for unlawful and mandatory language regarding criminal history.
  • Review job application and related forms for unlawful inquiries regarding criminal history.
  • Train employees who conduct job interviews and make or influence hiring and personnel decisions, regarding inquiries into, and uses of, criminal history, including best practices for documentation and record retention.
  • Review the hiring process to ensure compliance, including the timing of criminal history background checks, the distribution of mandatory notices, and the application of necessary waiting periods.