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New California Background Check Requirements Take Effect Oct. 1

A person filling out a background check form.

​California employers will need to make changes to their background check and criminal history review process thanks to new Fair Chance Act (FCA) regulations taking effect Oct. 1.

You should begin to prepare now for these new compliance obligations,

The California Fair Chance Act went into effect in 2018. It prohibits employers from asking about an applicant's criminal history until after a conditional offer of employment has been made to the applicant. If an employer contemplates not hiring an individual because of their criminal history, the company must perform an individualized assessment as to whether the applicant's criminal history "has a direct and adverse relationship with the specific duties of the job that justify denying the applicant the position." The assessment is done considering the following factors:

  • The nature and gravity of the offense or conduct.
  • The time that has passed since the offense or conduct and/or completion of the sentence.
  • The nature of the job held or sought.

If an employer believes an individual should not be hired after completing an individualized assessment, it must send written notice to the individual of the potential adverse action (commonly referred to as a pre-adverse action letter) and give them an opportunity to respond. The applicant must be given at least five business days to respond with additional information, such as rehabilitation efforts or mitigating circumstances.

The employer must consider any new information provided and conduct a reassessment. If the employer then decides to not hire the individual, it must send a notice to the applicant regarding its decision and notify the applicant of their rights.

However, the law will change as of Oct. 1

Previously, the FCA was interpreted to only apply to applicants or current employees seeking a position within the company. The term "applicant" now also includes an employee who undergoes a background check in connection with a change in ownership, a change in management, or a change in policy or practice.

The term "employer" now includes not only direct employers but also entities acting as agents or evaluating an applicant's criminal history on behalf of an employer, staffing agencies, and entities obtaining workers from a pool or availability list.

Employers cannot include statements in job advertisements, postings, applications, or other materials that persons with criminal history will not be considered for hire.

If an applicant voluntarily offers information about their criminal history prior to receiving a conditional offer, the new regulations make clear that the employer still cannot consider such information.

The new regulations provide a list of sub-factors that employers must consider at a minimum as part of the individualized assessment, including:

  • Whether the harm was to property or people.
  • The degree of the harm (e.g., amount of loss in theft).
  • The permanence of the harm.
  • The context in which the offense occurred.
  • Whether a disability contributed to the offense or conduct.
  • 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 when the conduct occurred.
  • The amount of time that has passed since the conduct underlying the conviction, which may significantly predate the conviction itself.
  • The amount of time that has passed since the applicant's release from incarceration.
  • The specific duties of the job, including whether the context in which the conviction occurred is likely to arise in the workplace and whether the type or degree of harm that resulted from the conviction is likely to occur in the workplace.

Since most of this information is not readily available, you should consider asking for this information before conducting an individualized assessment and sending a pre-adverse action letter. You can request this information from an individual with criminal history. However, you cannot require that an individual respond. The individual has the choice as to what information to provide. Further, you must consider any information provided by the individual.

After sending a pre-adverse action letter, you must wait at least five business days from the individual's receipt of the pre-adverse action letter before taking action and making its decision final. However, if an employer cannot show when the letter was received, it must assume as follows based on the method of delivery: email (two business days); mailing to a California address (five calendar days); mailing to address elsewhere in the United States (10 calendar days); or mailing outside of the United States (20 calendar days).

Under the FCA, employers must consider evidence of rehabilitation and mitigating circumstances provided from the individual. This has always been a requirement, but the new regulations set forth a fairly broad list of examples of such evidence that employers should consider.

Before Oct. 1, you should revise your background check policies for compliance and educate any individuals involved in the applicant screening/background check process. This includes coordinating with any third-party services you enlist to assist you with this process.

Shannon N. Cahill and Spencer W. Waldron are attorneys with Fisher Phillips in Irvine, Calif. © 2023. All rights reserved. Reprinted with permission.


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