On October 14, 2017, California became the most recent state to adopt a “ban-the-box” law. The law, signed by Governor Jerry Brown, goes into effect on January 1, 2018, prohibiting pre-offer inquiries regarding applicants’ conviction histories, and regulating employers’ decisions to deny employment to an applicant based on his or her convictions. This law is among the strongest and most expansive in the nation.

Prohibition Against Pre-Offer Inquiries Regarding an Applicant’s Conviction History

This bill expands existing state law to prohibit all employers in California with five or more employees from asking an applicant to disclose conviction information until the applicant is determined to be qualified for the position. Importantly, effective 2018, employers with five or more employees will be prohibited from:

  • Including any question on an application for employment that seeks the disclosure of an applicant’s conviction history;
  • Inquiring into or considering the applicant’s conviction history before the applicant receives a conditional offer of employment;
  • Considering, distributing, or disseminating certain information while conducting a criminal history background search in connection with applications for employment. Information that employers are prohibited from considering at any stage include:

o    Arrests that do not result in conviction;

o    Referral to or participation in diversion programs, and;

o    Convictions that have been sealed, dismissed, expunged, or statutorily eradicated.

Restrictions on the Process of Making Adverse Employment Decisions

This bill also includes restrictions on an employer’s use of criminal convictions after an offer has been made and the criminal history has been obtained. Specifically, employers cannot deny an applicant a position based on a conviction until after the employer performs an individualized assessment that considers the relationship between the conviction and the job duties included in the position sought. In making this assessment, employers must consider:

  • The nature and gravity of the offense;
  • The time that has passed since the offense occurred and the sentence was completed; and,
  • The nature of the job held or sought.

Once the employer makes a preliminary decision that a criminal record is disqualifying, the employer must notify the applicant of this decision in writing. While the employer is not required to justify the reasoning for making this preliminary decision, it must (1) identify the specific conviction that is the basis for the decision, (2) provide a copy of the conviction history report, and (3) explain that the applicant has the right to respond to the notice within five business days and may submit evidence challenging the accuracy of the conviction, evidence of rehabilitation, or mitigating circumstances. The employer must not make any determination during this period and, if the applicant disputes the conviction history and advises the employer that he or she is obtaining evidence to support the dispute, the employer must provide an additional five days for the applicant to respond to the notice. The employer must consider any evidence that the applicant submits.

After this period has passed, if the employer decides to deny the position to an applicant based on conviction history, the employer must notify the applicant in writing, must include any existing procedure that employer has to challenge the decision, and must send the applicant a notice informing him or her of the right to file a complaint with the Department of Fair Employment and Housing.

Considerations for Entities that may be Affected by the Law

Employers that conduct criminal background screening should review their policies, procedures, and documents relating to the screening process to ensure compliance with the new state law.  This bill is part of a broader trend of laws governing criminal background screening in California and employers need to also consider local ordinances that regulate criminal background screening. For example, the cities of Los Angeles and San Francisco have local ordinances that closely track this new state law, but which are not identical in all respects. Employers operating in those cities should carefully review those local ordinances because compliance with this new state law may not be sufficient to avoid liability on a local level.

The law provides an exemption for employers who are required to conduct criminal background checks by federal, state or local law. This exemption should be of benefit to depository institutions required by federal law to conduct background screenings on applicants and employees, and for the securities industry.

This law also affects Consumer Reporting Agencies (“CRAs”) that conduct background screening reports involving criminal records. These CRAs should work with employers to discuss excluding certain criminal records from background reports, which employers are prohibited from considering under the new law (arrest records without conviction, referrals to diversion, and dismissed or expunged records). In addition to discussing these requirements with their customers, CRAs should review their policies and procedures and consider updates regarding filtering these records from their background reports.

Conducting background checks often raises compliance issues under other laws, such as the Fair Credit Reporting Act. Troutman Sanders will continue to provide updates on new legislation, court decisions, and other legal developments in background screening.