Effective October 1, 2023, California employers must follow modified regulations under the California Fair Chance Act ("FCA") when attempting to use an applicant's criminal history to inform their employment decisions.
Enacted in 2018, the FCA (also known as the “Ban the Box” law) prohibits California employers with five or more employees from inquiring about a job applicant’s criminal history before making a conditional job offer. It also requires covered employers to perform an individualized assessment before refusing to hire an applicant with a known criminal record.
The FCA modifications include a variety of changes that affect the hiring process from start to finish, placing more stringent burdens and restrictions upon employers. The modifications can be found in California Code of Regulations Title 2, Section 11017.1 (click here). The California Civil Rights Department (“CRD”) has posted its own FCA page here. The modifications to the existing FCA rules are summarized below.
The term "employer" has been expanded to include “any direct or joint employer; any entity that evaluates the applicant’s conviction history on behalf of an employer, or acts as an agent of an employer, directly or indirectly; any staffing agency; and any entity that selects, obtains, or is provided workers from a pool or availability list.” In other words, an employer may not hire a third party to act on its behalf to circumvent the requirements of the FCA. (This does not apply to employers required by law to conduct a criminal background check, such as state or local agencies, criminal justice agencies, or Farm Labor Contractors.)
The term "applicant" has been expanded to include not only individuals applying for a position, but also existing employees applying for a new position or who are subject to review after a change in management, ownership, policy or practice. An employer also cannot evade the requirements of the FCA by letting the applicant start working before reviewing their criminal history.
Advertisements, job postings, and recruiting material cannot include statements that suggest the employer will not consider applicants with a criminal history, such as “No Felons” or “Must Have Clean [Criminal] Record.”
An employer may not consider an applicant’s criminal history before making a conditional offer of employment. This prohibition includes information voluntarily provided by the applicant or gained from any other source (such as an internet search). An employer may consider an applicant's criminal history only after extending a conditional offer, subject to the restrictions below.
After making a conditional offer of employment and upon learning of an applicant's criminal history, the employer must make an individualized assessment, which is a “reasoned, evidence-based determination” of whether the applicant’s criminal history has a direct and adverse relationship with the duties of the job which would justify denial.
The employer must consider the following general factors: (1) the nature and gravity of the offense or conduct; (2) the time passed since the offense or conduct; and (3) the nature of the job held or sought. The new regulations also provide a non-exhaustive list of sub-factors that may be included when making an individualized assessment; employers conducting an individualized assessment should review these factors.
Certain types of criminal history, such as non-felony marijuana convictions over two years old and non-conviction arrests, can never be considered in a hiring decision.
This section of the FCA was not modified by the new rules. If the employer wishes to revoke the conditional offer after the individualized assessment, the employer must notify the applicant in writing of its preliminary decision to revoke. That notification must cover a series of specific requirements.
The applicant must be given five business days to respond to the employer's notice by challenging the accuracy of the information considered, including submitting evidence of rehabilitation and/or mitigating circumstances. If the applicant timely notifies the employer of the need for additional time to respond, the employer must grant at least five additional business days to the employee to do this before the decision becomes final.
If an applicant challenges the employer’s preliminary decision to revoke the offer, the employer must perform a reassessment, including considering any evidence of rehabilitation or mitigating circumstances.
After reassessment, if the employer still wishes to rescind the conditional offer, it must provide written notification to the applicant and include information on how to challenge the decision and the applicant's right to file a complaint with the CRD.
Even if the employer is able to justify its revocation decision as job-related and necessary, an applicant still may file a claim for discrimination under the California Fair Employment and Housing Act (“FEHA”), arguing that there were less discriminatory alternative actions the employer could have taken. To be able to defend against such claims, employers are strongly encouraged to follow all of the steps discussed above, and maintain good documentation of each step along the way.
In addition to following these changes to the California law effective October 1, 2023, employers must review any local ordinances that apply to their various locations. Local jurisdictions such as Los Angeles and San Francisco have enacted their own local rules on the use of criminal history in the hiring process.
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