Employment Law Advisory for March 5, 2014: San Francisco Follows Emerging Trend, Restricts Use of Criminal Records by Employers

On February 17, 2014, San Francisco passed a new law, the Fair Chance Ordinance, that follows an emerging trend and restricts an employer’s ability to seek and utilize information regarding the criminal records of applicants and employees. Although the Fair Chance Ordinance is a local law, it highlights a growing trend of regulation with respect to the use of criminal records in employment decisions. Employers with employees in San Francisco should familiarize themselves with their obligations under the Fair Chance Ordinance, but all employers should be aware of the trend toward increased regulation and guidance issued by the Equal Employment Opportunity Commission, on the topic.   

The Fair Chance Ordinance applies to employers with 20 of more employees, but its protections benefit only those who work, or would work, within San Francisco. The main provisions of the law include the following:

  • Covered employers: The law applies to employers with 20 or more employees. In calculating headcount, employers must count all employees, both inside and outside of San Francisco. 
  • Covered applicants/employees: The protections of the law apply only to persons who work, or would work, within San Francisco. 
  • Effect on applications for employment: The law prohibits employers from including questions regarding criminal convictions on applications for employment. 
  • Job advertisements: The ordinance also prohibits job advertisements stating that persons with an arrest or conviction are not eligible for employment. 
  • Effect on criminal records checks: Employers may not conduct criminal background checks regarding an applicant until after completing their first interview with the applicant. Employers may not seek information regarding applicants or employees that relates to (a) arrests not leading to convictions, (b) participation in deferral or diversion programs, (c) dismissed, expunged or voided convictions, (d) convictions in the juvenile justice system, or (e) convictions more than seven years old. 
  • Use of information obtained through criminal records check: In the event that an employer obtains information regarding the criminal history of an applicant or employee and uses such information in making an employment decision regarding the applicant or employee, it must conduct an individualized assessment, considering the time elapsed since the conviction, the relationship between the offense and the job, and any evidence of rehabilitation, mitigating factors or inaccuracy in the criminal records.
  • Penalty for violations: Violations of the new law will result in warnings during the first year it is effective, but fines of $50 per employee or applicant may be imposed for a second violation of the law, and fines of $100 per employee or applicant may be imposed for subsequent violations. 

The Fair Chance Ordinance will become effective on August 17, 2014.

The Fair Chance Ordinance is consistent with an emerging trend of “Ban the Box” laws being adopted by state and local governments across the country. Ten states, including California, have adopted “Ban the Box” laws for employers in the public sector, and four (Hawaii, Massachusetts, Minnesota and Rhode Island) have adopted laws that apply to employers in the private sector as well. Lobbyists have proposed similar laws in other jurisdictions and we expect the trend toward increased regulation to continue. 

The Equal Employment Opportunity Commission has also issued guidance regarding the use of criminal records by employers. The EEOC’s guidance does not carry the force of law, but it offers a clear indication of the agency’s attitude and enforcement position. The guidance does not flatly prohibit criminal records checks, but encourages employers to conduct an individualized assessment of the criminal history of each applicant or employee in light of the relevant circumstances. Factors that the EEOC believes should be considered in the course of the individualized assessment include:

  •  the facts of the offense(s);
  •  the number of convictions;
  •  the applicant/employee’s age at the time of the conviction(s);
  • the time elapsed since the offense;

What Should Employers Do Now?

  • Employers with employees in San Francisco should familiarize themselves with the requirements of the Fair Chance Ordinance and assure that they comply with it when it becomes effective in August 2014.
  • All employers should re-evaluate their practices with respect to criminal records in light of the trend toward increased regulation and the EEOC’s guidance on the use of criminal records in employment decisions. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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