Popularly known as the “ban the box” law, the FCA prohibits employers from inquiring about an applicant’s criminal history until after a conditional offer of employment is made.

On October 1, 2023, changes to the California Fair Chance Act (FCA) went into effect. Since 2018, the FCA has governed how and when employers may inquire about and consider job applicants’ criminal history. With these new changes, employers have new clarity as well as new obligations in this area.

Summary of the FCA

Popularly known as the “ban the box” law, the FCA prohibits employers from inquiring about an applicant’s criminal history until after a conditional offer of employment is made. It also prohibits employers from inquiring about or considering certain types of criminal convictions in employment decisions, such as juvenile offenses or misdemeanor marijuana convictions more than 2 years old.

Once a conditional offer of employment is made and a background check reveals a criminal history that causes the employer to reconsider the offer, the employer must engage in a three-step assessment before making any final decision regarding the job offer:

Step 1: The employer must first consider all of the following factors with regard to any criminal history:

• The nature and gravity of the offense or conduct;
• The amount of time that has passed since the offense or conduct and/or completion of the sentence;
• The nature of the job held or sought; and
• To the extent that any evidence of rehabilitation or mitigating circumstances is voluntarily provided by the applicant or by another party at the applicant's request, before or during the initial individualized assessment, that evidence must be considered as part of the initial individualized assessment.

Step 2: If the employer is considering rescinding the offer after completing step 1, it must notify the applicant in writing and give the applicant at least five business days to respond with additional information and documents, including rehabilitation efforts or mitigating circumstances.

Step 3: If, after receiving and considering any new information or a lack of response, the employer decides not to hire the individual, it must send a written notice to the applicant regarding its decision and notify the applicant of their rights, including the right to file a charge with the California Civil Rights Department.

Summary of the 2023 Changes to the FCA

Clarification of Definitions

The 2023 changes to the FCA do not change the three-step process described above, but they do offer clarity to employers:

• Broader definition of “employer”: The new regulations broadened the definition of “employer” to include 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 selecting workers from a pool or availability list.
• Broader definition of “applicant”: In addition to applicants or current employees who were applying for a position within the company, the term “applicant” now includes existing employees who undergo a background check in connection with a change in ownership, a change in management or a change in policy or practice.
• Voluntarily disclosed information cannot be considered: Information about criminal history that is voluntarily disclosed prior to receiving a conditional offer cannot be considered by the employer.
• Restrictions on advertisements, applications or other materials: Employers must not include statements in job advertisements, applications or other material that persons with criminal history will not be considered for hire (e.g., “Must have clean record” or “No felons”).
• Employers who violate this prohibition waive the ability to consider criminal history: Employers who violate the prohibition on inquiring into criminal history prior to making a conditional offer of employment may not, after extending a conditional offer of employment, use an applicant's failure to disclose criminal history prior to the conditional offer as a factor in subsequent employment decisions, including denial of the position conditionally offered.

Clarification of How Employers Should Conduct Individualized Assessments of Applicant Criminal Histories

Additionally, the new FCA now provides additional guidance on how the analysis in step 1 above must be conducted:

• The nature and gravity of the offense or conduct: Consideration of this factor may include, but is not limited to:
  • The specific personal conduct of the applicant that resulted in the conviction;
  • Whether the harm was to property or people;
  • The degree of harm;
  • The permanence of the harm (e.g., amount of loss in theft);
  • 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; and/or
  • The age of the applicant when the conduct occurred.
• The amount of time that has passed since the offense or conduct and/or completion of the sentence: Consideration of this factor may include, but is not limited to:
  • The amount of time that has passed since the conduct underlying the conviction; and/or
  • The amount of time since release from incarceration.
• The nature of the job held or sought: Consideration of this factor may include, but is not limited to:
  • The specific duties of the job;
  • Whether the context in which the conviction occurred is likely to arise in the workplace; and/or
  • Whether the type or degree of harm that resulted from the conviction is likely to occur in the workplace.
• Any evidence of rehabilitation or mitigating circumstances: Consideration of this factor may include, but is not limited to:
  • Facts/circumstances surrounding the offense or conduct;
  • Participation in self-improvement efforts;
  • Length and consistency of employment history before and after the offense/conduct; and
  • Certificates of participation in, enrollment in, or completion of an educational, vocational or rehabilitation program.

Given that much of this information is not publicly available or provided in background check reports, employers should consider requesting this information from applicants before conducting the analysis in step 1. However, the applicant is not required to respond, and any information provided by the applicant must be taken into consideration.

Clarification of Timeframes for Applicants to Respond to Pre-Adverse Action Notices

Finally, the FCA requires that employers allow applicants at least five business days from receipt of the pre-adverse action letter to provide a response. Employers are advised to obtain delivery and read receipts for emails, or to send letters via certified mail or other trackable shipping method that confirms the date and time of delivery. The new regulations provide employers with guidelines to determine when this five-day period starts in situations where the employer cannot confirm when the letter was received:

• If notice is transmitted through email, the notice shall be deemed received two business days after it is sent.
• If notice is sent through the mail, the notice shall be deemed received:
  • Five calendar days from the date of mailing if sent to an address in California;
  • 10 calendar days from the date of mailing if sent to a U.S. address outside of California; and
  • 20 calendar days from the date of mailing if sent to an address outside of the United States.

Note that if the applicant timely notifies the employer in writing that the applicant disputes the accuracy of the conviction history being relied upon and that the applicant is taking specific steps to obtain evidence supporting the applicant's assertion, then the applicant shall be permitted no fewer than five additional business days to respond to the notice before the employer's decision to rescind the employment offer becomes final.

What Does This Mean for Employers?

With the new regulation already in effect, employers must act fast. Given the complexities of the existing law, along with its amendments, employers should work with legal counsel to ensure that their current background check policies are reviewed and updated. Employers should ensure that employees who are involved in recruitment and hiring are trained in these updates and are monitored to ensure that they comply accordingly.

For More Information

If you have any questions about this Alert, please contact Lori Ocheltree, Brooke B. Tabshouri, Poline Pourmorady, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.