California Updates Employment Regulations Concerning Criminal History

One of the latest in a series of “Ban the Box” style laws and amendments, California has updated its Fair Chance Act this year. On July 24, 2023, the Office of Administrative Law approved the California Civil Rights Council’s proposed modifications.

California’s Fair Chance Act aims to provide individuals with a prior criminal history a fair opportunity to start anew if the criminal history is not deemed a safety hazard and there is no directly relevant concern that negatively affects job performance.

The updates primarily clarify the original act and expand protections on individuals who possess a criminal history. There are also modifications aimed at protecting victims of domestic or dating violence, sexual assault, stalking or comparable statuses, and those with disabilities or certain diagnoses from discrimination.

History of the Fair Chance Act

Since 2018, the California Fair Chance Act has essentially required employers to wait until after a conditional offer of employment was made to inquire about criminal history. Under the act, employers must also conduct an individualized, job-related assessment before rejecting an applicant based on criminal history. Employers must also follow a two-step notice process if action is taken based on criminal history. Below is a history of the progression of this Act.

• Enacted in 2018: The first version of California’s Fair Chance Act was instated on January 1, 2018, and it prohibits employers from:
  • Including questions about conviction history on a job application before a conditional job offer is made;
  • Asking about or considering criminal history before a conditional job offer is made; and
  • Considering information about arrests not followed by conviction; participation in pretrial or posttrial diversion programs that have been completed; and the underlying pending charges or conviction dismissed, sealed, or eradicated, or convictions that have been sealed, dismissed, expunged, or statutorily eradicated.
• New enforcement efforts released in 2021: On October 20, 2021, we reported on an announcement released by the California Department of Fair Employment and Housing (DFEH) addressing regulations on the Fair Chance Act in a new effort to identify and correct violations of the act.
• Amendments in 2023: On July 24, 2023, the amended Act was approved and will take effect on October 1, 2023. This amendment further restricts employers’ use of criminal history in making employment decisions.

What Does the Fair Chance Act’s Amendment Include?

The latest update to the Act includes, but is not limited to, the following changes:

• Initial assessment before preliminary decision: Employers must conduct an initial, individualized assessment before issuing a notice of preliminary decision based on criminal history.  This means the employer may need to contact the applicant before sending the first notice or collect relevant information in some other way.
• Clarifications on individualized assessment standards: The assessment must be a “reasoned, evidence-based determination,” and the amendment modification also includes details on three considerations to ensure any potentially adverse decisions are not based on bias. This is intended to base potential adverse decisions on objective evidence that the applicant’s criminal history has a direct damaging relationship with the job.
• Updates to Rehabilitation and Mitigating Circumstances: Employers are prohibited from:
  • Requiring additional evidence of rehabilitation or further related documentation;
  • Refusing to accept additional evidence of rehabilitation that the applicant voluntarily gives; and
  • Requiring applicants to disclose their status as a survivor of domestic or dating violence, sexual assault, stalking or comparable statuses, and/or requiring an applicant to produce medical records and/or disclose the existence of a disability or diagnosis.

To read the full details on the modifications of the CA Fair Chance Act, take a closer look here.

How Might This Update Affect Employers?

In the most recent update to the act expands the definition of “employer” from “a labor contractor and a client employer” 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.”

The amendment states that employers who violate the act are subject to fines up to $1,000, while employers with 100 or more employees are subject to penalties up to $5,000. The act also includes additional consequences including training requirement guidelines for employers that repeatedly violate the Act.

This act directly applies to California, but by extension, it may also apply to employers regarding applicants who have previously lived in or have had applicable experiences within the state which fall under the umbrella of the CA Fair Chance Act. Employers may want to review their current job postings with their legal team to ensure they comply with the updated act.