California employers often require applicants to undergo criminal background checks.  Various state and federal employment laws govern this process, and employers must ensure their practices comply with those laws.

Employers that conduct background checks must comply with the Federal Fair Credit Reporting Act, the California Consumer Credit Reporting Agencies Act, and the Investigative Consumer Reporting Agencies Act, as applicable. Because California law generally is more stringent than federal law in this area, employers should ensure their vendors comply with California’s requirements. 

The Revised California Civil Rights Department Regulations

On October 1, 2023, the California Civil Rights Department (“CRD”) revised its regulations related to criminal background checks. These changes affect how employers may use criminal history in making employment decisions, and the process they must follow in doing so. 

First, the new regulations define “employers” to include direct and joint employers, employers’ agents, and staffing agencies.  In addition, “applicant” is defined as individuals who were conditionally offered employment, which includes current employees applying for new positions and employees subject to review because of a change in ownership. 

Under the new regulations, when an employer intends to deny employment because of an applicant’s conviction history, the employer must conduct an “initial individualized assessment,” and a “reassessment” using information that applicants voluntarily provide throughout the hiring process.

To conduct the initial individualized assessment, the employer must consider: (1) the nature and gravity of the conviction; (2) the time since conviction and/or completion of the sentence; and (3) the nature of the position. The regulations also require the employer to evaluate the applicant’s conduct that resulted in the conviction, the amount of time that has passed since the underlying conviction or the applicant’s release from incarceration, and the specific duties of the job.

If, after the individualized assessment, the employer decides to withdraw the conditional job offer (background checks generally are conducted post-offer and pre-employment), then the employer must send the applicant a preliminary notice with a right to respond, and an opportunity to challenge the accuracy of the conviction history report and submit evidence of rehabilitating or mitigating circumstances.

Examples of rehabilitating and mitigating circumstances include whether trauma, domestic violence, or similar factors contributed to the offense; whether a disability contributed to the offense; and whether a reasonable accommodation could mitigate or eliminate the conduct; the applicant’s self-improvement efforts; and the age of the applicant.

Applicants have five days to respond to the preliminary notice unless the employer provides more time.

During the reassessment, the employer must consider the information the applicant provides. The employer also must evaluate the applicant’s conduct during incarceration, the applicant’s employment history since the conviction, the applicant’s community service and engagement, and other rehabilitative efforts.

If the employer ultimately decides to withdraw the conditional offer of employment, it must provide the applicant written notice of the decision. Employers may use the sample notice forms located on the CRD website at https://calcivilrights.ca.gov/fair-chance-act/fca-forms/.

Additional Criminal Background Check Considerations

It is never a good idea to conduct “informal” background checks, by Googling an applicant, for example.  Employers may learn information about an applicant, such as designation in the Megan’s Law Database, which they cannot lawfully use in making an employment decision.

Employers must ensure that their policies and procedures applicable to background checks do not result in disparate treatment or impact. For example, an employer obviously cannot decide only to conduct background checks on applicants who seem “edgy,” or who reveal gaps in their employment history.

Finally, California employers must preserve background check records for at least two years. 

Best Practices

Background checks can offer invaluable insights into an applicant’s suitability for a position.  However, the process is fraught with potential liability.  Employers must understand industry-specific requirements, develop narrowly tailored, clear, and consistent written policies, train supervisors, managers, and decision-makers on the applicable requirements, and ensure and they used qualified vendors with California-compliant practices.