On April 3, 2018, the San Francisco Board of Supervisors passed notable amendments to the city’s existing Fair Chance Ordinance (“Ordinance”), a municipal measure that limits the timing and scope of inquiries into an applicant’s or employee’s criminal history. These amendments will take effect on October 1, 2018.

The Ordinance applies to employers with five or more employees nationwide that have at least one San Francisco employee (defined as someone who works eight or more hours per week in San Francisco, on average). Covered employers will need to review their existing hiring policies and procedures for their San Francisco workforce and train (or retrain) their hiring personnel in order to ensure compliance with the amendments to the Ordinance.

Increased Coverage and Decriminalized Behavior

The amendments make several changes to the Ordinance, including modifying the timing and scope of inquiries into an applicant’s or employee’s criminal history and increasing the number of employers that will be covered:

Existing Law

Amendments

Covers employers that have 20 or more employees, regardless of the employees’ locations

Reduces coverage threshold to employers that have five or more employees, regardless of the employees’ locations

Employers may inquire about, require disclosure of, or base employment decisions on convictions for decriminalized behavior—i.e., behavior that was unlawful at the time of conviction but is no longer a crime under California law—that is seven years old or less.

Employers may not inquire about, require disclosure of, or base employment decisions on convictions for decriminalized behavior—such as convictions for the non-commercial use and cultivation of cannabis—at any time.

Employers may inquire about, require disclosure of, or base employment decisions on a person’s conviction history after either a live interview or a conditional offer of employment is made.

Employers may inquire about, require disclosure of, or base employment decisions on a person’s conviction history after a conditional offer of employment only.

Some of these revisions conform the Ordinance to changes in California law that took effect on January 1, 2018. As we previously discussed, the California Fair Chance Act (formerly AB 1008) went into effect on January 1, 2018. Like the amended Ordinance, the statewide law applies to California employers with five or more employees and restricts the ability of employers to consider conviction history until after making a conditional offer of employment.

However, parts of the Ordinance, as amended, are more onerous than the California statute in some respects. For example, while employers hiring outside of San Francisco will be able to inquire about, and base an employment decision on, decriminalized behavior after making a conditional offer of employment, employers hiring for positions in San Francisco will be unable to consider decriminalized behavior at any time—even after making a conditional offer of employment.

Increased Fines and a New Private Right of Action

The amendments to the Ordinance also permit the imposition of penalties for first-time violations, increase penalties for subsequent violations, authorize the payment of penalties to the victims of those violations, and permit employees or applicants to enforce the law:

Existing Law

Amendments

No penalty for the first violation

$500 penalty for the first violation

$50 penalty for a second violation

$1,000 penalty for a second violation

$100 penalty for subsequent violations

$2,000 penalty for subsequent violations

A procedural violation affecting multiple employees or applicants at the same time (e.g., all applicants for a certain job opening are asked for their conviction history on the initial application) is treated as a single violation rather than multiple violations.

If multiple employees or applicants are impacted by the same procedural violation at the same time, an employer is liable for an administrative penalty for each of the employees or applicants affected by the procedural violation.

Penalties are paid to the city.

Penalties are paid to the employee or applicant.

Only the city can sue for violations of the Ordinance.

Any employee covered by the Ordinance or applicant whose rights have been violated can sue, after filing a complaint with the San Francisco Office of Labor Standards Enforcement (“OLSE”).

Given that there was no private right of action with individual recovery for violations of the Ordinance previously, San Francisco employers may now see an uptick in ban-the-box litigation because of these amendments. Moreover, the penalties imposed by the Ordinance are in addition to what an employee or applicant may recover for violations of the California statute, which includes the remedies available under the Fair Employment and Housing Act (Government Code § 12940 et seq.). Therefore, employees and applicants may have two bites at the apple over the same conduct.

What San Francisco Employers Should Do Now

As noted above, the amendments to the Ordinance will take effect on October 1, 2018. In the meantime, all San Francisco employers should familiarize themselves with the amendments and revisit their hiring policies and procedures to ensure compliance with the amended Ordinance.

Employers that were not previously covered by the Ordinance, but will be under the amendments (i.e., those with more than five employees but less than 20), should review two of our previous Act Now Advisories: “San Francisco’s Fair Chance Ordinance—New Workplace Law Regulates Criminal Background Inquiries” and “Another Tidal Wave of New California Laws Will Impact Employers in 2018 and Beyond.” Additionally, these employers should do the following:

  • Review and, if necessary, revise hiring policies and practices, including job applications, job postings, and disclosure and authorization forms, to make sure that they comply with the Ordinance and California law.
  • Post and distribute all notices published by the OLSE that are required by the Ordinance.
  • Develop strict policies and protocols for conducting interviews, inquiring into criminal history, conducting individualized assessments, obtaining information that mitigates the conviction history of an applicant, and retaining documents.
  • Train hiring personnel as to what questions may be asked during the initial interview and how to process an individualized assessment when evaluating an applicant’s conviction history.