California Cracks Down on Employers’ Use of Criminal Background Information

California employers using employees’ criminal convictions to make employment-related decisions should be aware of the recent flurry of new regulations and pending state legislation that place increased limitations on employers’ use of such information.

New FEHC Regulations Prohibit Consideration of Criminal History When Doing So Has An Adverse Impact On Individuals in A Protected Class

California’s Fair Employment and Housing Commission (FEHC) issued new regulations on employers’ use of criminal background information when making employment decisions, including hiring, promotion, discipline, and termination. The new regulations take effect on July 1, 2017, and are intended to clarify how the use of criminal background information may violate the provisions of the Fair Employment and Housing Act (“FEHA”).  The regulations prohibit employers from seeking or using any criminal history information that has an adverse impact on an individual within a protected class, such as race, national origin or gender. The new regulations provide that an adverse impact may be established through the use of state or national level statistics or by offering “any other evidence” that establishes an adverse impact.

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Philadelphia Significantly Expands Its “Ban the Box” Ordinance

By Dennis Mulgrew

A growing number of jurisdictions around the country have enacted so-called “ban the box” laws, which limit employers’ ability to inquire about and/or consider applicants’ criminal records when making employment decision.

In 2011, Philadelphia enacted the Fair Criminal Records Screening Standards Ordinance, its version of “ban the box.” This past week, the ordinance was amended to significantly expand the scope of prohibited activity and the protections provided to applicants, in the following respects:

  • Covered Employers – The amended ordinance covers private employers employing any persons within Philadelphia, whereas the previous version applied only to those with ten or more employees.
  • Timing of Criminal Record Inquiry – Employers may now conduct a criminal background check only after a conditional offer of employment has been made, whereas previously employers were permitted to conduct the check after an application was received. Further, the revised ordinance prohibits employers not only from asking for specific criminal history information, but also about “the applicant’s willingness to submit to a background check” at a later date.
  • Individualized Assessment Requirement — The amended ordinance now imposes an “individualized assessment” requirement, pursuant to which an employer may only reject an applicant if his or her criminal record includes “conviction for an offense that bears such relationship to the employment sought that the employer may reasonably conclude that the applicant would present an unacceptable risk to the operation of the business or to co-workers and customers, and that exclusion of the applicant is compelled by business necessity.” In determining the “risk,” an employer must consider as part of the “individualized assessment” the nature of the offense; the time passed since the offense; the job duties of the particular position sought; the applicant’s employment history before and after the offense; any character or personal references provided by the applicant; and evidence of rehabilitation since the conviction.
  • Job Applications – The previous version of the ordinance prohibited employers from making any criminal history inquiries in a job application. The amended ordinance clarifies that the text of a job application may not include such an inquiry “whether or not certain applicants are told they need not answer the question.” Essentially, this provision means that multi-state employers cannot use applications containing a criminal history request even if the application specifically directs Philadelphia applicants not to answer the question.
  • Time Limits — Employers may only consider convictions occurring within the last seven years, excluding periods of incarceration.
  • Applicant Notification — Employers must provide written notification to applicants that are rejected based on their criminal background (including a copy of the applicant’s criminal history report), and must allow the applicant ten business days to provide “evidence of the inaccuracy of the information or to provide an explanation.”
  • Private Right of Action – The amended ordinance provides for an administrative complaint process, to be administered by the Philadelphia Commission on Human Relations, with a private right of action after administrative remedies have been exhausted. Further, in the event of a violation, a court “may grant any relief it deems appropriate,” including compensatory damages; punitive damages; reasonable attorneys’ fees; court costs; and injunctive relief.
  • Posting Requirements – Employers must post a summary of the ordinance’s requirements “in a conspicuous place on the employer’s website and premises” in a “form to be supplied by the Commission.” (Note that the Philadelphia Commission on Human Relations has not yet issued a sample poster for the revised ordinance).

Although styled as an “amendment,” the revised ordinance imposes significant new requirements on employers and, most importantly, provides applicants a private right of action in court in the event of a violation. In advance of the ordinance’s effective date of March 14, 2016, employers should carefully review their current screening and application processes to ensure compliance with not only Philadelphia’s ordinance, but also other applicable statutes such as the federal Fair Credit Reporting Act and the Pennsylvania Criminal Records Act.