New California Laws Restrict Employer Access to Criminal and Pay Histories

Farella Braun + Martel LLP

Farella Braun + Martel LLP

Published by the North Bay Business Journal.

If you are planning to hire new employees to work in your winery, you should be aware of two new employment laws that restrict employers from obtaining and relying upon certain information about job applicants.

In 2017, the California legislature passed laws limiting employers from collecting and considering information about applicants’ criminal backgrounds and prohibiting employers from asking applicants to disclose their prior salaries. Employers – even small businesses – who fail to comply with these new laws can be subjected to administrative charges, government investigations, costly litigation, and significant damages and penalties. All California employers should carefully consider their hiring processes and practices to ensure compliance.

Employers are Restricted From Inquiring into Applicants’ Criminal Backgrounds

Many employers perform criminal background checks on job applicants, but collecting and relying on criminal history information in making hiring decisions has been scrutinized due to concerns about the practice’s impact on certain groups. In recent years, California has passed a series of “ban the box” measures which restrict employers’ ability to rely on criminal history information.

Now, any employer with five or more employees may not ask about or consider an applicant’s criminal history until after the employer makes a conditional job offer. Further, employers may never consider, distribute, or disseminate information related to arrests that did not result in convictions, referrals to pretrial or post-trial diversion programs, or convictions that have been sealed, dismissed, expunged, or eradicated pursuant to law.

In addition, employers who intend to rely on criminal history in employment decisions must show that the practice is “job-related and consistent with business necessity.” Employers must also individually assess whether the applicant’s conviction history has a “direct and adverse relationship with the specific duties of the job,” considering the nature and gravity of the offense, time passed since the offense or conduct and completion of the sentence, and the nature of the job.

If an employer preliminarily decides that the applicant’s conviction history disqualifies him or her from employment, the employer must (1) notify the applicant in writing and (2) allow the applicant at least five business days to respond to the notice and provide evidence challenging the accuracy of the conviction report before the decision becomes final.

Employers May Not Solicit Applicants’ Prior Salaries

While an applicant’s salary history has historically been a central data point in wage negotiations, a new California law has put an end to that practice. In 2017, the California legislature prohibited employers from obtaining and relying on salary history information in making employment decisions.

The new law, which applies to all employers in California, prevents employers from relying on an applicant’s salary history in determining whether to offer employment or how much to pay him or her. Employers cannot – whether orally, in writing, personally, or through an agent – seek salary history information, including compensation and benefits, about an applicant for employment. Further, employers must now provide the pay scale for a position to applicants who request it.

Importantly, the law does not prohibit an applicant from voluntarily and without prompting disclosing salary history information to a prospective employer, and does not prohibit an employer from considering or relying on that voluntarily disclosed information in setting that applicant’s salary. It also does not prohibit employers from considering salary information that is publicly available. However, the law is clear that an applicant’s prior salary, by itself, is not sufficient to justify any disparity in compensation.

Best Practices for California Employers

To comply with new laws relating to job applicants, below is a list of best practices for California employers:

1. Ensure that job applications and online postings do not seek information about criminal history or salary history.

2. Establish a salary range or fixed salary for every position and ensure that salary negotiations take place within those parameters. Be prepared to provide a pay scale to job applicants upon request.

3. Train interviewers to avoid questions about salary history or criminal background.

4. Carefully consider whether, and to what extent, the consideration of an applicant’s conviction history is consistent with business necessity.

5. Establish a consistent and neutral individualized assessment policy for the consideration of applicants’ criminal backgrounds which complies with FEHA regulations and considers the factors articulated in Cal. Gov. Code § 12952(c).

6. Develop a process which allows applicants to challenge adverse employment decisions based on criminal background in compliance with FEHA regulations and the provisions of Cal. Gov. Code § 12952(c).

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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