[author: Noel Diem]

Employers need to be vigilant about staying compliant with their hiring practices and background screening. For most organizations, this means not only knowing, but understanding, new regulations and rules coming down from local, state, and federal governments. It’s also important to understand these different rules and regulations that happen at local or state levels to prepare for changes that could come at a federal level.

Currently on the radar of employers is the introduction of new regulations under the Fair Chance Act (FCA) in California, starting October 1, 2023. These regulations, which impact the California Code of Regulations Title 2, Section 11017.1, place additional requirements on employers when using criminal history and background screening as part of hiring decisions.

At AssureHire, we understand the challenges faced by employers in complying with these complex regulations and aim to provide tailored background screening solutions that help simplify the process while ensuring fair and equitable hiring practices. With a focus on providing comprehensive and accurate information, our innovative technology assists employers in navigating the intricate landscape of criminal history as a basis for employment decisions in California and beyond.

What is California’s Fair Chance Act?

Enacted in 2018, and going into effect October 1, 2023, California’s Fair Chance Act promotes fair employment opportunities for individuals with criminal records. This law prohibits employers (with an expanded definition) from screening an applicant’s criminal history until extending a conditional job offer. The purpose of the Act is to give those with prior convictions a fair chance of employment by preventing their automatic disqualification based on criminal history. Employers now must consider rehabilitation and qualifications.

Under the Fair Chance Act, California employers must follow specific procedures when evaluating an applicant’s criminal history. After the conditional offer is sent to the individual, employers can legally conduct background checks and consider criminal records in their hiring decisions. However, before taking action based on the results of a background check, employers must provide the applicant with a copy of the report and give them sufficient time to review and respond.

The Fair Chance Act aims to reduce employment barriers faced by individuals with criminal records by changing:

• Who is defined as an employee and an employer
• The rules surrounding individualized assessments
• Offer revocation notices
• When it is legal to gather information

Employers concerned with compliance should seek legal counsel.

What’s on the Horizon?

The new regulations under the Fair Chance Act will change processes and hiring workflows for organizations large and small. Everyone must adhere to these regulation changes. For HR leaders and recruiters, it is important to know, understand, and implement these changes in order to stay compliant with hiring laws.

For leaders already using AssureHire, our policy surrounding Adverse Action is built to keep you agile and compliant. Based on how the notice is delivered, AssureHire is capable of tracking the metadata and timestamps of delivery, its receipt, and the opening of adverse action.

These changes will be effective starting October 1, 2023.

Changes to the definition of “employer”

Perhaps the biggest change starts with the definition of an employer. It is expanding to encompass a broader range of entities, including labor contractors, client employers, direct or joint employers, entities that evaluate an applicant’s conviction history on behalf of an employer, staffing agencies, and entities that select or obtain workers from availability lists.

Changes to the definition of “applicant”

The definition of the term “applicant” is also changed under California’s new background screening rules. It now includes existing employees who have applied for a different position within their current organization, as well as those employees who face a review of their criminal history due to factors such as changes in ownership, management, policy, or practice.

Conducting individualized assessments

Employers have been required to conduct individual assessments of candidates with criminal histories. The new regulations expand the categories of information California has indicated are important in those individual assessments and state that employers should conduct “initial” individualized assessments before sending pre-adverse action notices.

Section B goes into more detail about individualized assessments and reads as follows:
(B) The individualized assessment must include, at a minimum, consideration of the following factors:

(i) The nature and gravity of the offense or conduct. Consideration of this factor may include but is not limited to:

(I) The specific personal conduct of the applicant that resulted in the conviction;

(II) Whether the harm was to property or people;

(III) The degree of the harm (e.g., amount of loss in theft);

(IV) The permanence of the harm;

(V) The context in which the offense occurred;

(VI) Whether a disability, including but not limited to a past drug addiction or mental impairment, contributed to the offense or conduct, and if so, whether the likelihood of harm arising from similar conduct could be sufficiently mitigated or eliminated by a reasonable accommodation, or whether the disability has been mitigated or eliminated by treatment or otherwise;

(VII) Whether trauma, domestic or dating violence, sexual assault, stalking, human trafficking, duress, or other similar factors contributed to the offense or conduct; and/or

(VIII) The age of the applicant when the conduct occurred.

(ii) The time that has passed since the offense or conduct and/or completion of the sentence. Consideration of this factor may include but is not limited to:

(I) The amount of time that has passed since the conduct underlying the conviction, which may significantly predate the conviction itself; and/or

(II) When the conviction led to incarceration, the amount of time that has passed since the applicant’s release from incarceration.

(iii) The nature of the job held or sought. Consideration of this factor may include but is not limited to:

(I) The specific duties of the job;

(II) Whether the context in which the conviction occurred is likely to arise in the workplace; and/or

(III) Whether the type or degree of harm that resulted from the conviction is likely to occur in the workplace.

The need for a clear and specific connection

Furthermore, employers can only consider criminal records that are directly related to the job at hand. This means that you cannot reject an applicant solely based on their criminal record unless there is a clear and specific connection between the conviction and the job duties involved.

Background screening policies must be necessary and job-related

Moving forward, not all background screening policies will be compliant. Now is the time to look at your policy and eliminate anything that is vague, overly-broad, or unnecessary. Under the new regulations, employers must show necessity for their background checks. These can be related to the type of working being done, the work environment, or role-related reasons.

Written notice to applicants

If employers choose not to hire an applicant based on their screening results, a written notice must be provided regarding the decision and providing information about certain rights. Before that, the pre-adverse action notice must specify the records that are concerning to the employer and the employer cannot take adverse action based on the applicant’s failure to respond to the pre-adverse action notice.

Reassessment process

Perhaps the most significant change is that California’s new background screening rules list a step-by-step process for you to follow if you do end up denying employment based on a criminal history. This process helps you stay compliant with the new rules and gives applicants the fairest chance of employment.

Use AssureHire in your background screening process

The new rules make it more complicated for employers to ask about and think about applicants’ criminal history. So, employers should check their current rules, especially the ones about looking at individuals’ criminal histories, to make sure they follow the new rules. If you do not have a written policy for background screenings, like you may have for your drug and alcohol policy, it is time to get one.

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