This blog was originally published in Forbes on November 3, 2020.
Bolstering Covid-19 worker protections, the California Department of Fair Employment and Housing (“DFEH”) recently clarified the state’s criminal background check regulations. The new guidance expands the scope of California’s Fair Chance Act and places employers on notice regarding DFEH’s intended enforcement of the law.
The California Fair Chance Act
Initially enacted in 2018, the Fair Chance Act prohibits most employers with at least five employees from inquiring into a candidate’s criminal record before a conditional offer of employment has been made. Employers may not include any question that requests the disclosure of criminal history on an initial employment application. The purpose of the law is to encourage employers to assess candidates’ merits and not their criminal past.
When assessing the results of a criminal background check, employers may not consider an arrest that did not result in a conviction, subject to certain exceptions, referral to or participation in a pretrial or post-trial diversion program, and convictions that have been sealed, dismissed, expunged, or eradicated by statute.
An employer considering denying a candidate a position after reviewing the candidate’s conviction history must conduct an individualized assessment and provide the candidate with an opportunity to respond before making a final employment decision. The employer cannot revoke the conditional job offer without considering the nature and gravity of the criminal history, the time that has passed since the conviction, and the nature of the job sought by the candidate. If, after conducting an individualized assessment, an employer decides to revoke a job offer based on a candidate’s criminal history, the employer must inform the candidate in writing, provide a copy of any conviction history report relied upon, and give the candidate at least five business days to respond.
During the five business day period, an employer may not adversely affect the candidate’s employment. If the candidate disputes the accuracy of the conviction history and is obtaining evidence to support the dispute and notifies the employer, the candidate has five additional business days to respond to the employer’s notice.
If the employer decides to deny employment after the interactive fair chance process is exhausted, the employer must notify the candidate in writing. This notice must identify that the offer is being revoked based on the candidate’s criminal history, any existing procedure that the employer has for the candidate to challenge the decision or request reconsideration, and the right to file a complaint with the DFEH.
DFEH Clarifies Act
As a result of the pandemic, some employers have modified their hiring procedures to permit candidates to begin work while their background checks are in process. This process allows the employer to address its staffing needs while mitigating the impact from courts that are closed or who have limited resources to respond to background check requests.
In response, the DFEH has expanded the definition of “applicant” to include individuals who are conditionally offered employment but that begin working while an employer assesses a candidate’s criminal history post-offer. The revised regulations clarify that an employer must follow the Fair Chance Act’s requirements even if the candidate has been conditionally hired. The DFEH noted that a candidate does not “lose their status as an ‘applicant’ by working before undertaking a post-conditional offer review of the individual’s criminal history.”
Newly issued Frequently Asked Questions (“FAQ”) also clarify that California’s Fair Chance Act does not apply to certain health care positions with patient access, labor contractors on farms, roles with state criminal justice agencies, where an employer must bar employment based on specific criminal history, or where the employer must perform a background check as required by law or regulation. However, the FAQ specifies that even if an employer is exempt from the Fair Chance Act, assessing a candidate’s criminal history may be discriminatory if it adversely impacts the candidate based on a protected basis, such as race. The DFEH notes, “Even if the consideration of criminal history is job-related and consistent with business necessity, it will be unlawful if there is a less discriminatory way to meet the business necessity.”
Next Steps for Employers
California’s Fair Chance Act is one of more than three dozen ban the box measures that restrict a private employer’s inquiry in a candidate’s criminal history. The DFEH’s new guidance reminds employers that they must comply with all applicable laws, including the notice and individualized assessment steps required by the Fair Chance Act, as well as the Act’s restrictions on the consideration of specific criminal history. FAQs also clarify that employers must comply with the Act for individuals hired before their criminal background check is completed. Employers in Los Angeles and San Francisco must also comply with additional notice and assessment requirements beyond those promulgated by California’s Fair Chance Act.
Employers should ensure that all screening and hiring policies and processes are revised to align with the DFEH’s guidance. Employers who rely on a candidate’s criminal history to make a hiring decision must follow the Act’s specific individualized assessment and notice requirements. Background screening solutions that help identify the potential impact of a ban the box law or fair chance act and tools that help an employer comply may mitigate the risks of regulatory action, litigation, or other exposure that can damage an employer’s brand and reputation.