Modifications to employment regulations regarding criminal history

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We previously reported on the regulations issued for California employers regarding criminal history inquiries. The regulations took effect July 1, 2017. That prior article outlined existing regulations. These regulations have now been updated. Specifically, in December of 2022, the California Civil Rights Department (“CRD”), formerly known as The Department of Fair Employment and Housing (“DFEH”), released its proposed modifications to the 2017 regulations in the Fair Employment and Housing Act (“FEHA”) regarding the legal use of a job applicant’s criminal history.

In general, these proposed modifications concern the use of criminal history information in employment decisions under California Code of Regulations, Title 2, section 11017.1. The proposed modifications seek to clarify that “with limited exceptions,” employers have no legal obligation to check the criminal histories of applicants or current employees. But, if the employers choose to do so, they must abide by the legal limitations set forth in the regulations. The proposed modifications clarify the current obligations, however, additional requirements are also being proposed.

The proposed regulation adds an “Introduction” to section 11017.1 which states the general scope of the proposed changes:

Employers and other covered entities (“employers” for purposes of this section) are explicitly prohibited under the Act and other state laws from inquiring into or considering certain enumerated criminal records and information in hiring, promotion, training, discipline, layoff, termination, and other employment decisions as outlined below. Unless an exception applies, the Act also prohibits employers from rescinding a conditional offer of employment because of an applicant’s conviction history unless and until, following an individualized assessment, the employer can demonstrate that the conviction has a direct and adverse relationship with the particular position for which the employer is hiring. Further, employers are prohibited under the Act from using any conviction history in employment decisions if doing so would constitute disparate treatment of, or have an unjustified adverse impact on, individuals on a basis protected by the Act.

Here are some of the proposed changes which, thankfully, mostly help to clarify employers’ obligations, although some additional burdens are added.

  • Expanded Definitions: For the purposes of section 11017.1 only, the Council proposed expanded definitions of the following key terms:
    • Applicant includes “existing employees who have applied or indicated a specific desire to be considered for a different position with their current employer.”
    • Employer includes “any direct and 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.”
  • Employers, with limited exceptions, do not have a legal obligation to check the criminal history of an applicant or current employee; however, if they choose to do so, they must abide by the legal limitations described in the regulations.
  • Employers are prohibited from including statements in job advertisements, postings, applications, or other materials that no persons with criminal history will be considered for hire, such as “No Felons” or “Most Have Clean Record.”
  • If an applicant volunteers information about their criminal history before receiving a job offer, the employer may not consider any such information until after it has decided whether to make a conditional employment offer.
  • The proposed regulation clarifies when the employer or the employer’s agent to be “required by law” to conduct a criminal background check such that the exemption from the prohibition against inquiring about or using any criminal history before a conditional offer of employment has been made applies. Specifically, the new regulations clarify that if a state, federal, or local law requires another entity, such as an occupational licensing board, to conduct a criminal background check, the employer will not be exempted the prohibition.
  • The proposed regulation supplements the level of detail of the individualized assessment an employer must undertake before taking an adverse action based solely or in part on the applicant’s conviction history, by including non-exhaustive considerations for each factor of the analysis.
  • The proposed regulation adds a description of evidence of rehabilitation or mitigating circumstances that an applicant voluntarily may provide, including:
    • when 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 since the conviction or completion of sentence;
    • the applicant’s community service and engagement since the conviction or completion of sentence, including but not limited to volunteer work for a community organization, engagement with a religious group or organization, participation in a support or recovery group, and other types of civic participation; and/or
    • the applicant’s other rehabilitative efforts since the completion of sentence or conviction or mitigating factors not captured above.
  • The CRD proposed additional considerations for the individualized assessment an employer must perform when it considers rescinding a conditional offer of employment based on the applicant's conviction history. In determining what constitutes a “direct and adverse relationship” that warrants rescinding the conditional offer, the CRD clarified that an applicant’s possession of a benefit, privilege, or right required in order to perform the job by a licensing, regulatory, or government agency or board is “probative” of the conviction history’s not being directly and adversely related to the duties of the job. The council also added specific factors to consider for each of the “nature and gravity of the offense or conduct,” “time that has passed since the offense or conduct and/or completion of the sentence,” and “nature of the job held or sought” prongs of the individualized assessment.
  • A requirement that employers maintain any forms, documents, or information used to complete the forms described in the subsection on the Work Opportunity Tax Credit (“WOTC”) in confidential files separate from the applicant’s general personnel file and not use or disseminate these forms, documents, or information for any purpose other than applying for the WOTC.
  • An expansion of the definition of “employer” to include “any direct and 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 above proposal was issued on December 15, 2022 and was subject to a 15-day written comment period which ended on December 30, 2022. The CRD will meet again in 2023 which will result in the issuance of final regulations. It is expected that the proposed modifications will become final with little, if any, revisions. We will update you when the final regulations are issued.

In light of these impending changes in California, employers that use criminal records to vet candidates should consider a privileged review of all of the various policies, procedures, and other documents related to the screening process (e.g., job applications, offer letters, guidelines for recruiters, adjudication standards, pre-adverse action notices, etc.). With the proliferation of new laws and ordinances, it is more important than ever for employers to keep abreast of developments regarding this topic nationwide.