It may seem as though employers may choose to hire employees who lack criminal histories, particularly in jobs requiring honesty or good judgment. But the government has become increasingly hostile to that notion. 

A growing number of federal, state, and local laws limit an employer’s right to consider or even seek criminal history information from applicants and employees.  The task has become even more difficult in California given new regulations that were effective on  July 1, 2017. 

Background

In 2012, the federal Equal Employment Opportunity Commission advised employers in regulatory “Guidance” to remove from job applications  questions about an applicant’s criminal record.  The agency also cautioned against total prohibitions on hiring applicants with criminal convictions. 

California cities, such as Los Angeles and San Francisco, more recently enacted “ban the box” ordinances. The local rules outright prohibit employers from including criminal history questions on job applications.  The California Legislature has also enacted laws that forbid employers from considering certain types of criminal histories, including all juvenile arrests and convictions, subject to few exceptions.  

The New Regulations

 The California Fair Employment and Housing Council (FEHC) has approved new regulations that further expand protections for job applicants and employees.  These new rules expand the types of criminal histories than an employer cannot consider; create new notice provisions; and set out a rather complex scheme by which an applicant or employee can argue that an employer’s consideration of criminal history has a “disparate impact” on a protected class of individuals.

Prohibitions as to Certain Criminal Records  

Under current California law, employers cannot inquire about or consider certain information at all, including: arrest or detention that did not result in conviction; referral to or participation in a diversion program; convictions  that has been dismissed, sealed, or expunged; or, as stated, most juvenile arrest and conviction history.

The new regulations also recognize California law prohibits employers from inquiring about or considering any non-felony conviction for marijuana possession that occurred more than two years ago. Presumably, California’s decriminalization of marijuana under state law will render this law largely unnecessary in the coming months.  

New Notice Provisions

If an employer learns of a conviction from a source other than the applicant or employee him/herself (such as through a credit report or doing independent research), the employer must inform that individual of its decision to refuse work on the basis of the conviction.  That is a significant change, as employers previously were not required to disclose the reason preemptively.

The employer also must provide the individual a reasonable opportunity to present evidence that the criminal history information relied upon is inaccurate.  If the applicant produces such evidence, then the employer cannot consider the information in making an employment decision.

Protected Class Protections 

Opponents of basing employment decisions on criminal records often base their objection on evidence that certain racial and ethnic groups are disproportionally convicted and, therefore, disproportionately excluded from employment.  The new regulations address that concern.

First, the rules prohibit employers from considering criminal history if doing so will result in an “adverse impact” on individuals on a basis otherwise protected under the Fair Employment and Housing Act (FEHA), such as race, gender, and national origin. An adversely-impacted applicant or employee bears the initial burden of proving that the screening policy had an adverse impact on the protected class in question.  This burden might be met, for example, by presenting statistics that members of the individual’s race are disproportionally subjected to criminal convictions.

The burden then shifts to the employer to establish that the policy is justifiable because it is “job-related and consistent with a business necessity.”   In doing so, however, the employer must demonstrate that the screening policy is appropriately tailored to take into account the nature and gravity of the offense, when the offense occurred, and the nature of the job held or sought.  That means, at least in the vast majority of situations, a “bright line” policy is considered presumptively invalid. That said, it may be that a bank can establish a rule that anyone convicted of bank robbery or counterfeiting cannot work there. But many convictions are not as clear-cut.    

Even if an employer can show that its screening process is job-related and consistent with its business necessity, the applicant or employee can prevail by demonstrating that a less discriminatory policy exists that serves the employer’s goals in an equally effective manner. 

Exceptions Still Apply

Federal and state laws mandate that, as to certain jobs (such as peace officers and some healthcare and pharmacy employees), employers must either bar individuals with criminal histories or perform a screening process.  Other laws require that governmental agencies consider applicants’ criminal histories in issuing certain occupational licenses.  The new regulations provide that compliance with such laws serves as a rebuttable defense to an adverse impact claim.

Tips for Employers

Employers with operations in multiple jurisdictions must ensure employment applications and hiring procedures comply with the new laws and rules concerning convictions.  In many cases, unless the industry or job requires it, it is difficult to justify asking for criminal history information on the application itself.

To satisfy the “job-relatedness” defense to adverse impact, employers must analyze jobs for which criminal convictions have a direct relationship to the job (such as the bank example above.)  Employers also should decide how to evaluate those applicants with some criminal history that is unrelated to duties

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