The County of Los Angeles has announced a new Fair Chance Ordinance, taking effect on September 3, 2024, that will regulate the consideration of criminal history information by employers with five or more employees in unincorporated areas of the county. While some of the new requirements align with similar requirements under California’s existing fair chance laws, many of the ordinance’s provisions impose entirely new requirements. Employers that fail to update their background check processes to comply with the amendments could face a private civil action or significant civil penalties.

The new ordinance (the Ordinance) is one of several fair chance laws with which California employers must comply. For example, the California Fair Chance Act (Fair Chance Act) requires employers considering criminal history information to follow strict rules, which were expanded by amended regulations that went into effect last year. In addition, the City of Los Angeles previously enacted the Fair Chance Initiative for Hiring Ordinance (FCIHO), imposing additional limitations and procedural requirements on employers that consider an applicant’s criminal history when making employment decisions.

Below we highlight notable aspects of the new Ordinance, including similarities and differences between the Ordinance and the existing Fair Chance Act and FCIHO. However, this LawFlash does not cover all aspects of the Ordinance. The full text of the Ordinance can be found here.

REQUIREMENTS FOR JOB POSTINGS AND CONDITIONAL OFFER LETTERS

Similar to the FCIHO, the new Ordinance requires employers to state in job postings that qualified applicants with criminal histories will be considered for employment. However, the Ordinance uniquely requires “regulated employers” that are “required by local, State or federal law or regulation to restrict or prohibit the hiring of individuals with certain specified Criminal History for the job position” to identify such laws or regulations in all job postings.

Moreover, if an employer intends to review an applicant’s criminal history in connection with a conditional offer of employment, the job posting must include a list of “all material job duties of the specific job position which the Employer reasonably believes that Criminal History may have a direct, adverse and negative relationship potentially resulting in the withdrawal of the Conditional Offer.”

The Ordinance identifies several statements that must be incorporated into conditional offer letters, including a statement that the conditional offer is contingent upon the review of the individual’s criminal history and a statement that the employer has “good cause” to conduct a review of criminal history for the specific job, with supporting justification provided in writing.

“Good cause” exists where

• the employer faces a significant risk to its business operations or business reputation unless a review of criminal history is conducted for the specific job position; or
• a review of criminal history is necessary for the specific job position due to articulable concerns regarding the safety of, or risk of harm or harassment to, the employer’s staff, employees, contractors, vendors, associates, clients, customers, or the general public.

Finally, if the employer is reviewing additional information, background, or history in addition to criminal history in connection with a conditional offer of employment, the conditional offer letter must include a “complete list of all types of information, background or history that will be reviewed by the employer,” including education, social media history, employment history, motor vehicle or driving history, reference checks, credit history, license or credential verification, drug testing, or medical examinations.

NOTIFYING APPLICANTS OF PRELIMINARY ADVERSE ACTION DECISION BASED ON CRIMINAL HISTORY

Prior to taking adverse action against an applicant based on criminal history, employers in California must conduct an individualized assessment of the applicant’s criminal history and provide the applicant with written notice of the preliminary decision to take adverse action (a pre-adverse action notice).

Unlike the statewide Fair Chance Act, the new Ordinance and FCIHO require Los Angeles employers to provide a written copy of the individualized assessment to the applicant along with the pre-adverse action notice.[1] However, whereas the Fair Chance Act and FCIHO allow employers to send pre-adverse action documents to applicants by either email or regular mail, the new Ordinance requires employers to send pre-adverse action documents by both email and regular mail whenever email is available.

PROHIBITION ON CONSIDERING CONVICTIONS MORE THAN SEVEN YEARS OLD

The Ordinance also prohibits employers from considering a conviction that is more than seven years old unless certain exceptions apply, including when the applicant or employee will be providing care to a minor or dependent adult. The seven-year lookback period is measured from the date of disposition of the conviction.

ORDINANCE REQUIREMENTS THAT TRACK REQUIREMENTS OF FAIR CHANCE ACT

As with last year’s amended regulations for the Fair Chance Act, the new Ordinance clarifies when a pre-adverse action notice is considered “received” by an applicant. Specifically, if sent by email, the pre-adverse action notice is considered “received” two business days after it was sent. However, if the notice was sent by US mail without tracking to an applicant in California, it is considered “received” five calendar days following the employer’s placement of the notice in the mail. If the applicant’s residential address is located outside of the state, the notice is considered “received” 10 calendar days after the notice is placed in the mail by the employer.

However, the Ordinance gives applicants more time to respond to the pre-adverse action notice than they are afforded under the existing Fair Chance Act and FCIHO. Under those frameworks, an applicant has five business days from the date they “receive” a pre-adverse action notice to respond to the notice with rehabilitation information and mitigating evidence that an employer must consider before a final adverse decision is made.

While the Ordinance also uses a five-business-day response window, the response deadline must conform to the date on which the pre-adverse action notice is considered “received” in the mail. Specifically, the Ordinance provides that, even when the pre-adverse action notice is sent via email, the “timelines to respond to the notice will be calculated based on the date the notice was mailed.” In effect, this means that the Ordinance requires an employer to provide an applicant with a minimum of five calendar days from the date on which a pre-adverse action notice is mailed to the applicant and an additional five business days before the employer may finalize any adverse decision.

Similarly, if an applicant informs the employer in writing that the applicant disputes the accuracy of the criminal history information and is taking specific steps to obtain evidence supporting that assertion and/or the applicant needs additional time to obtain written evidence of rehabilitation or mitigating circumstances, the employer must provide the applicant with 10 additional business days to provide this information. In contrast, the Fair Chance Act only provides such applicants with five additional business days.

For applicants covered by the new Ordinance, employers must include this new timeline, as well as an explanation of when the pre-adverse action notice will be deemed “received,” in the pre-adverse action notice in bold or underlined font or in all capital letters.

PROVIDING EVIDENCE OF REHABILITATION OR MITIGATING CIRCUMSTANCES OVER THE PHONE OR IN PERSON

The new Ordinance provides applicants with ample methods for providing evidence of rehabilitation or mitigating circumstances to employers. Specifically, in lieu of submitting written materials to an employer, an applicant may request an opportunity to present evidence of rehabilitation or mitigating circumstances in person, virtually, or via telephone contact with the employer.

If the applicant requests this opportunity within five business days of receiving the pre-adverse action notice, the employer must give the applicant the opportunity to provide this information within 10 business days of the request.

PROCESS FOR NOTIFYING APPLICANTS OF A FINAL ADVERSE ACTION DECISION

Under the existing Fair Chance Act and FCIHO, an employer must perform a written reassessment of an applicant’s criminal history if the applicant provides information in response to the pre-adverse action notice. However, the new Ordinance requires employers to conduct a “second individualized assessment” regardless of whether the applicant responded to the pre-adverse action notice and provide a written copy of that individualized assessment to the applicant.

Unlike the City of Los Angeles with the FCIHO, the county has not provided a sample notice that employers should use when providing applicants with a copy of individualized assessments under the new Ordinance.

Similar to the statewide Fair Chance Act, which requires a final adverse action notice to inform applicants of their right to file a charge with the California Civil Rights Division, the new Ordinance additionally requires the final adverse action notice to notify applicants of their right to file a charge with the Los Angeles County Department of Consumer and Business Affairs (DCBA) for a violation of the Ordinance.

Uniquely, if an employer provides the final adverse action notice to an applicant more than 30 calendar days after the applicant provided a timely response to the employer’s pre-adverse action notice, the Ordinance presumes that the employer’s delay was untimely and thus a violation of the Ordinance. To rebut this presumption, the employer must provide a written explanation in the final adverse action notice that justifies why the final decision was not made within 30 days. The Ordinance states that this explanation may include a description of circumstances involving a business or personal emergency or delays outside of the employer’s control.

WORKPLACE POSTING REQUIREMENTS

Employers with a workplace, job site, or other location in the unincorporated areas of Los Angeles County that is under the employer’s control and frequently visited by their employees or applicants must post a notice informing applicants and employees of the provisions of the Ordinance in a conspicuous place. Employers must also post the notice on webpages frequented by their employees or applicants and send a copy of the notice to each labor union or representative of workers with which they have a collective bargaining agreement or other agreement or understanding that is applicable to employees in the unincorporated areas of Los Angeles County.

CIVIL PENALTIES AND PRIVATE RIGHT OF ACTION

Violations of the Ordinance expose an employer to a penalty of up to $5,000 for a first violation, $10,000 for a second violation, and $20,000 for the third and subsequent violations. These penalties are higher than those under the FCIHO, where employers face a $500 penalty for a first violation, $1,000 for a second violation, and $2,000 for a third violation. Penalties under the new Ordinance are calculated on a per-violation basis, under which an employer may be liable for multiple penalties if a single violation impacts multiple individuals.

The Ordinance allows the DCBA to investigate violations of the new Ordinance and impose civil penalties. However, the Ordinance also provides applicants or employees the option to bring a civil action in court upon timely submission of an intent-to-sue notice to the DCBA, which will allow a civil action to be brought against the employer within one year from the date of the notice.

[1] The Ordinance protects “applicants,” which include individuals seeking “employment” with a covered “employer.” However, current employees seeking promotions are also “applicants.” The Ordinance defines an “employee” as any individual whose job involves performing at least two hours of work on average each week within the unincorporated areas of Los Angeles County.

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