By Melanie M. Ghaw, Esq., Rachel H. Khedouri, Esq., and Stacy L. Fode, Esq.
On January 1, 2018, California enacted its Fair Chance Act (“FCA”) – also known as a “ban the box” law – which limits the ability of employers with five or more employees to consider an applicant’s or employee’s conviction history in connection with employment. The California FCA and similar laws prohibit employers from asking job candidates about conviction history before making offers, compel employers to conduct initial individualized assessments to determine whether there is a direct and adverse relationship between the history and the specific duties of the job at issue, require employers to provide a “pre-adverse action letter” giving notice to and opportunity to respond by the candidate prior to taking action based on conviction history, and contain other provisions intended to reduce barriers to employment for individuals with criminal histories.
On October 1, 2023, the State implemented revised regulations interpreting the FCA, significantly changing the criminal background check process and imposing additional obligations on employers. In sum, the amended regulations expand coverage of the law, add restrictions on employer advertisements, provide clarification on employer considerations prior to taking adverse action based on conviction history, and extend the length of time for applicants to respond to pre-adverse action letters. Key points and highlights of the new regulations of particular importance to employers are summarized below.
1) Coverage of the FCA is extended beyond traditional “applicant”/“employer” definitions.
Previously, the FCA was interpreted to apply only to applicants and to current employees seeking another position within the company. The amended regulations now expand the definition of “applicants” to include employees who are undergoing a background check due to changes in ownership or management, or changes to employer policies or practices. Additionally, the term “employer” has been redefined to include, not only direct employers, but also entities that evaluate an applicant’s conviction history on behalf of an employer, or directly or indirectly act as an agent of an employer; staffing agencies; and entities that select, obtain, or provide workers from a pool or availability list.
2) Indirect no-hire statements are prohibited.
The new regulations emphasize indirect as well as direct barriers to employment for individuals with criminal histories. Employers are prohibited from implying in job advertisements, postings, applications, or other materials that individuals with a criminal history will not be considered for hire, including statements such as “No Felons” or “Must Have Clean Record.”
3) Employers may not consider criminal history prior to issuing a conditional offer, even if the information is provided voluntarily.
The new regulations make clear that employers may not consider criminal history information prior to extending a conditional offer, even if that information is provided voluntarily by applicants or employees.
4) Employers must assess the relationship of the conviction history to the specific duties of the job prior to denying employment.
Once an employer has extended a conditional offer of employment, the company now cannot revoke the offer based, in whole or in part, on conviction history without conducting a “reasoned, evidence-based determination” to assess whether there is a “direct and adverse relationship” between the conviction history and the specific duties of the job. The new regulations set forth specific factors to be considered in this initial individualized assessment (or any subsequent reassessment), including:
- The nature and gravity of the offense or conduct, which may include consideration of whether the harm was to people or property, whether a disability (e.g., past drug addiction or mental impairment) contributed to the offense or conduct, and whether trauma, domestic or dating violence, sexual assault, stalking, human trafficking, duress, or other similar factors contributed to the offense or conduct;
- The age of the applicant at the time and how much time has passed since the offense or conduct and completion of the sentence; and
- The nature of the job held or sought, particularly whether the type or degree of harm that resulted from the conviction is likely to occur in the workplace.
Notably, employers likely will not have this type of information at the offer stage. Employers may consider inviting applicants or employees to provide this information prior to conducting the assessment and issuing a pre-adverse action letter. However, under the new regulations, employers may not either require that such information be provided or refuse to consider any such information, if provided.
5) Employers must consider additional evidence of rehabilitation or mitigating circumstances if provided by the applicant or employee.
In addition to the factors to be considered during the initial individualized assessment, employers must also consider any evidence of rehabilitation or mitigating circumstances provided at the applicant’s or employee’s discretion. Although this has always been required under the FCA, the updated regulations set forth a list of examples, including documentary evidence, that employers should consider as evidence of rehabilitative efforts, including:
- The length and consistency of employment history before and after the offense or conduct;
- The applicant’s current or former participation in self-improvement efforts;
- Whether the applicant is bonded;
- The fact that the applicant is seeking employment;
- Successful completion, or compliance with the terms and conditions, of probation or parole;
- If the conviction led to incarceration, the applicant’s conduct during incarceration, including participation in work and educational or rehabilitative programming and other prosocial conduct;
- The applicant’s employment history since the conviction or completion of sentence; and
- The applicant’s community service and engagement since the conviction or completion of sentence.
This evidence must be considered during the initial individualized assessment if provided by the applicant or employee at that time, or upon reassessment if the individual chooses to provide such information in response to a pre-adverse action letter.
6) Applicants and employees now have more time to respond to a pre-adverse action letter.
The new regulations provide an extension of time for applicants and employees to respond to a pre-adverse action letter of at least five business days from the date of receipt of the letter. Employers may offer additional time at their discretion. If the letter is transmitted through a format that does not provide a confirmation of receipt, the notice is deemed received five calendar days following the date of deposit for delivery to California addresses, ten calendar days following the date of deposit for addresses outside of California, and twenty calendar days following the date of deposit for addresses outside the United States. Email notices are deemed received two business days after sending. In light of these new regulations, employers should immediately revise their criminal background check policies to ensure compliance with the law. Additionally, employers should make sure that any individuals or third-party entities involved in the applicant screening and background check process are aware of their updated obligations under the FCA.
If you have any questions relating to compliance with the amended California Fair Chance Act regulations, please feel free to reach out to the NFC Attorney with whom you typically work with or call Stacy Fode, Partner at NFC West at 619.292.0515.