California Places New Limits on Employer Use of Criminal History

Ervin Cohen & Jessup LLP
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New regulations issued by the California Fair Employment and Housing Council (FEHC) impose additional limitations on an employer’s use of criminal history information, and expand the types of criminal history that employers are prohibited from considering.  Effective July 1, 2017, these regulations prohibit an employer from considering criminal history in employment decisions if doing so would result in an adverse impact on individuals within a protected class, such as race, sex, or national origin.  An applicant or employee has the burden of proving adverse impact, but if proven, the burden shifts to the employer to establish that the policy or practice is job-related and consistent with business necessity. Factors used to determine if a policy or practice is job-related and consistent with business necessity include whether the policy or practice bears a demonstrable relationship to successful performance of the job, it measures the person’s fitness for the specific positon, and it is tailored to take into account, among other things, the nature and gravity of the offense or conduct, the time that passed since the offense or conduct occurred, and the nature of the job held or sought.

To demonstrate that considering conviction history in employment decisions is appropriately tailored to the job requires that an employer either (i) demonstrate that any “bright-line” conviction disqualification or consideration (which doesn’t include an individualized fact assessment) can distinguish between applicants or employees who do or do not pose an unacceptable risk level, and that  the conviction has a direct, specific negative bearing on the ability to perform necessary duties, or (ii) the employer has conducted an individualized assessment, which includes notice to adversely impacted employees or applicants and an opportunity to respond, before any adverse action is taken.  Any bright-line rule that involves a conviction occurring seven (7) or more years ago is subject to a rebuttable presumption that it is not sufficiently tailored to meet the job-related and consistent with business necessity defense.

Even if an employer can show that its consideration of conviction history is job-related and consistent with business necessity, adversely impacted employees or applicants in a protected group can still claim this practice or policy is discriminatory if they can show there is a less discriminatory policy or practice that still meets the employer’s goals.

If an adverse employment decision is based on criminal history from a source other than the employee or applicant in the protected group, before taking the action, the employer must give the individual notice and a reasonable opportunity to prove the information is factually inaccurate.  If the applicant or employee can show the record is factually inaccurate, that record can’t be considered in the employment decision.

Further, regardless of its adverse impact, when making employment decisions, unless otherwise permitted by law, employers are prohibited from seeking or considering a non-felony two or more year old conviction for marijuana  possession, an arrest not resulting in conviction, participation in a diversion program, a judicially dismissed, sealed or expunged, or statutorily eradicated, conviction, or an arrest when subject to juvenile court law.

The new FEHC regulations are a more detailed and restrictive version of a prior guidance issued by the Equal Employment Opportunity Commission.  The regulations are also consistent with a growing national trend of “ban the box” legislation.  A prominent example of this trend is the recently enacted Fair Chance Initiative for Hiring in Los Angeles.  This law prohibits most employers from inquiring about a job applicant’s possible criminal history until an initial job offer is made.  With limited exceptions, this law applies to businesses with at least 10 employees who perform at least two hours of work on average each week in the City of Los Angeles, including owners and managers.  In addition, California employers must take care to conduct background investigations in accordance with the Federal Fair Credit Reporting Act, the California Investigative Consumer Reporting Agencies Act and the California Consumer Credit Reporting Agencies Act.

In view of the FEHC Regulations and the expanding body of legislation relating to the use of background checks and past criminal convictions, employers wishing to undertake background check are cautioned to do so only upon the advice of legal counsel.

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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