The Details
On February 14, 2014 the City of San Francisco passed the Fair Chance Ordinance, which expanded coverage of the city’s and the county’s current “ban the box” ordinances from covering only public employers to also covering private employers with 20 or more employees, housing providers and city contractors. The San Francisco Ordinance will go into effect on August 13, 2014.
Ban-the-Box Requirements
The phrase “ban the box” refers to removing from employment applications questions concerning an applicant’s criminal history (e.g., criminal convictions and pending charges). Under the San Francisco Ordinance, employers are prohibited from inquiring into, requiring the disclosure of, and/or taking adverse action based on an applicant’s criminal history on the employment application and/or during the first live employment interview. At the point during the hiring process when employers may inquire about an applicant’s criminal history, employers can inquire only about misdemeanor and felony convictions that occurred within seven years of the date of inquiry. Employers are prohibited from asking about (a) arrests other than those for which charges are still pending; (b) the completion of a diversion program; (c) sealed and juvenile offenses; and (d) infractions that are not felonies or misdemeanors. Applicants for jobs where criminal history is relevant, such as law enforcement and child care, are exempt from the ban.
Criminal History Evaluation & Assessment
If an applicant discloses his or her criminal history, employers can consider the information only if it has “a direct and specific negative bearing on the applicant’s ability to perform the duties or responsibilities necessarily related to the employment position.” To evaluate whether an individual’s criminal history meets this standard, the employer must consider (a) whether the position offers the opportunity for the same or similar offenses to occur; and (b) whether the underlying conduct will recur in the position. In addition to considering the job-relatedness of the offense, the employer must consider the time that has elapsed since the conviction or unresolved arrest and must conduct an individualized assessment taking into account a variety of factors that might evidence rehabilitation or mitigating circumstances.
Notice Requirements
Before making a criminal history inquiry, an employer must provide the applicant with a notice regardless of whether the inquiry is made directly to the applicant or to a third-party consumer reporting agency (i.e., a background check company).
The notice must contain the same information as the information contained in a poster that the San Francisco Ordinance requires San Francisco’s Office of Labor Standards Enforcement (“OLSE”) to create and publish. The notice / poster may be downloaded by clicking here.
The Ordinance also requires employers to supplement the disclosure used to comply with provisions of the Fair Credit Reporting Act (“FCRA”) and California’s Investigative Consumer Reporting Agencies Act. In addition to the notice, and prior to making an adverse decision based on an applicant’s criminal history, the employer must provide a pre-adverse action notice. The pre-adverse action notice requirement varies from the FCRA’s pre-adverse action notice requirement in several important respects.
First, the notice must be provided regardless of whether the employer obtains the criminal history information through the applicant’s self-disclosure or from a background report provided by a consumer reporting agency. Second, the notice must identify the specific criminal history that provides the basis for the adverse decision (e.g. the adverse action notices provided by ADP Screening and Selection Services do not specifically identify the criminal history that provides the basis for the adverse decision; clients will need to customize these letters).
Third, the employer must wait at least seven days from the date of the notice before taking final adverse action. Finally, if during the seven-day waiting period the applicant disputes the criminal history or provides information regarding rehabilitation or mitigating factors, the employer must wait a “reasonable time” before taking adverse action. If the employer decides to take an adverse action, the employer must send a final adverse action notice.
Other Requirements
Employers are required to state in job advertisements that they will consider qualified applicants with a criminal history. Also, as noted above, employers must display a poster in each San Francisco location where applicants or employees may visit and send the poster to each labor union that represents employees in the employer’s workplace. The poster must provide in English, Spanish and Mandarin the following information: (a) the criminal history information that employers are prohibited from considering; (b) the restrictions on employers’ inquiry into criminal history; (c) the individual’s right to submit information about rehabilitation and mitigating factors, a list of those factors, and the timeline for providing the information; and (d) contact information for the OLSE to report suspected violations. Presumably, the OLSE will make the poster available in Spanish and Mandarin prior to the effective date of the Ordinance.
Lastly, employers must “retain records of employment, application forms, and other pertinent data and records . . . for a period of three years, and shall allow the OLSE access to such records, with appropriate notice and at a mutually agreeable time. . .”
Penalties
For any first violation, or any violation within 12 months of August 13, 2014, the OLSE must issue warnings and notices to correct, and offer the employer technical assistance on how to comply with the requirements of the new Ordinance.
After the initial grace period, the OLSE can seek penalties of up to $50 per employee for a second violation and of up to $100 per employee for each subsequent violation. The City may also pursue civil remedies for violation of the Ordinance, including an injunction, reinstatement of the employee, back pay, benefits, the payment of an additional sum of $50 per employee for each day the Ordinance was violated, and attorneys’ fees and costs.
A full reading of the new ordinance can be found here: Ordinance 131192.
Practical Impact
This new law will require employers to review their hiring processes and related documentation. It will also require that employers post specific information in certain locations. More generally, the San Francisco ordinance is part of a growing trend at the state and local level aimed at controlling the use of criminal history to make employment decisions. In addition, the federal Equal Employment Opportunity Commission (EEOC) has recommended that employers refrain from including criminal history inquires on employment applications. EEOC guidance can be located here.
As always, please contact your Human Resource Business Partner if you have any questions.