New California regulations on background checks took effect October 1, 2023

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California’s Office of Administrative Law has issued final approved modifications to regulations on background checks administered by employers.

Since 2018, California employers with five or more employees have been subject to the Fair Chance Act, which among other things, prohibits employers from asking a job candidate about conviction history before making a job offer. The modified regulations primarily focus on how employers are allowed to consider conviction history prior to a conditional offer of employment and what they must do to deny an applicant employment because of the applicant’s conviction history. Some of the changes include:

Expanded definitions

The amended regulations expand the definition of “applicant” to encompass existing employees who apply or express interest in different positions within their current organization. Applicant” now also includes “an existing employee who is subject to a review and consideration of criminal history because of a change in ownership, management, policy or practice. In addition, now the term “employer” 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.

Job posting restrictions

The modified regulations forbid employers from including exclusionary statements in job advertisements or applications, such as “No Felons” or “Must Have Clean Record.”

Individualized assessment process

The Fair Chance Act already required that employers make “individualized assessments” in determining whether an applicant’s criminal history disqualified them from a final job offer. The regulations now require an employer to conduct an “initial” individualized assessment before sending the notice of preliminary decision. The amendments also clarify that individualized assessments must consist of a “reasoned, evidence-based determination” and must provide detail on whether the applicant’s conviction history has a direct and adverse relationship with the job’s specific duties such that it justifies denying the applicant the position. The individualized assessment must include consideration of: (a) the nature and gravity of the offense or conduct, (b) the time that has passed since the offense or conduct and/or completion of the offense, and (c) the nature of the job held or sought. These new regulations provide some additional clarity when conducting this assessment by giving examples of evidence that may be relevant for these considerations, such as whether a disability, trauma, domestic or dating violence, sexual assault or stalking, human trafficking, duress or other similar factors contributed to the offense or conduct.

Rehabilitation and mitigating circumstancesIf an applicant voluntarily provides evidence of rehabilitation or mitigating circumstances before or during the initial individualized assessment, it must be considered as part of the initial individualized assessment. Any such evidence of rehabilitation or mitigating circumstances is optional and may only be voluntarily provided by the applicant or by another party at the applicant’s request. When an employer is considering evidence of rehabilitation or mitigating circumstances, it may consider, but is not limited to, the following factors:

  • Whether the conviction led to incarceration, the applicant’s conduct during incarceration, including participation in work and educational or rehabilitative programming and other pro-social conduct;
  • The applicant’s employment history 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 in the above subfactors.

Adverse action notices and applicant response

If, after conducting an initial individualized assessment, the employer makes a preliminary decision that the applicant’s criminal history disqualified them from the employment conditionally offered, the employer must notify the applicant of the preliminary decision in writing. The preliminary notice must include all of the following:

  • The disqualifying conviction or convictions that are the basis for the preliminary decision to rescind the offer;
  • A copy of the conviction history report utilized or relied on by the employer;
  • Notice of the applicant’s right to respond to the notice before the preliminary decision rescinding the offer of employment becomes final;
  • An explanation informing the applicant that, if the applicant chooses to respond, the response may include submission of either or both of the following types of evidence:
    • Evidence challenging the accuracy of the conviction history report that is the basis for the preliminary decision to rescinding the offer, or;
    • Evidence of rehabilitation or mitigating circumstances.
  • Notice of deadline for the applicant to respond if the applicant chooses to do so.
    • The deadline for providing a response must be at least five business days from the date of receipt of the notice. An employer may offer an applicant more than five business days to respond to the notice regarding its preliminary decision.

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 must 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.

The new regulations contain provisions in addition to these, and the Fair Chance Act requires employers to fulfill multiple technical steps involving factual analysis and written notices. As such, employers should seek expert guidance in fulfilling these obligations.