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Criminal Background Checks
Obtaining Consumer Investigative Reports
Obtaining Criminal History: Employers should avoid a rule that automatically bars employment to any applicant with a record of criminal conviction. This type of policy may violate local, state and federal law if the conviction is not job-related and the policy has a disparate impact upon a protected class.​​ ​San Francisco enacted strict prohibitions on the use of criminal history information during the application process. San Francisco employers should review the information about San Francisco’s Fair Chance Ordinance.

General Rules: The following general rules relating to the use of criminal history information apply to California employers. This area of the law is in flux. Employers who must conduct criminal background checks to comply with various state laws should consult with legal counsel. You cannot ask job applicants to disclose information about:
  • Arrests or detentions not resulting in conviction
  • Information concerning a referral to or participation in a criminal diversion program (a criminal diversion program is a work or education program as part of probation)
  • Convictions for most marijuana possession offenses more than two years old
  • Convictions that have been judicially dismissed or ordered sealed pursuant to law

A new law effective January 1, 2014, specifically prohibits employers from asking any applicant to disclose information concerning a conviction that has been judicially dismissed or ordered sealed pursuant to law. The law also prohibits employers from considering any such information as a condition of employment.

You cannot seek the prohibited criminal history information from any other source, nor use it as a factor in determining any condition of employment, including decisions related to hiring, promoting, training or termination. 

A “conviction,” as defined in the California Labor Code, includes a plea, verdict or finding of guilt, regardless of whether a sentence was imposed by the court.

Certain exceptions to the prohibition apply. Under state law, you can ask employees and applicants about any arrest for which the employee or applicant is out on bail or out on his/her own recognizance pending trial. The law also does not prohibit an employer from asking about or using information about criminal convictions or criminal diversion programs when:
  • The employer is required by law to obtain that information
  • The position would require the applicant to possess or use a firearm in the course of his/ her employment
  • Individuals convicted of a crime are prohibited by law from holding the particular position the applicant is seeking, regardless of whether that conviction has been expunged, judicially ordered sealed, statutorily eradicated, or judicially dismissed following probation.
  • The employer is prohibited by law from hiring an applicant who has been convicted of a crime

Certain exceptions also exist for peace officers, health care employees and people with access to drugs and medication.

Effective July 1, 2014, there are limitations on when state and local agencies can request criminal history information. The law prohibits a state or local agency from asking an applicant to disclose information regarding a criminal conviction until after the agency determines the applicant meets minimum employment qualifications as stated in any notice issued for the position. The prohibition applies to requests to disclose information orally, such as in a phone screening or interview, or in writing and expressly prohibits any inquiry about conviction history on any employment application. There are specified exceptions, such as where a criminal history background check is otherwise required by law for the position. 

Limits On Use of Properly Obtained Criminal History Information: Assuming all of the steps for obtaining permissible criminal history information have been followed, the FCO still places restrictions on when you can make an employment decision based on an applicant/employee’s conviction history. If an applicant discloses criminal history, you are restricted under the FCO on how you can consider the information. The FCO requires employers to conduct an individualized assessment of the information and consider:
  • Only “directly related” convictions
  • The time that has elapsed since the conviction or unresolved arrest
  • Any evidence of inaccuracy
  • Evidence of rehabilitation
  • Other mitigating factors

Employers under the FCO need to determine if the criminal history is directly related to the individual’s ability to perform the job. A “directly related” conviction is defined as a conviction or unresolved arrest that has a “direct and specific negative bearing” on the individual’s ability to perform the duties or responsibilities of the job. In determining whether a conviction or unresolved arrest is directly related to the employment position, the FCO requires you to consider:
  • Whether the job at issue offers the opportunity to commit the same or similar offense; and
  • Whether the circumstances that led to the prior conduct resulting in conviction or unresolved arrest will recur in the position.

If, after conducting this assessment, you decide not to hire an applicant based on criminal history (or take some other adverse action such as discharge or failure to promote), you must take the following steps prior to taking any adverse action:
  • Provide the applicant/employee with a copy of the background check report, if any;
  • Notify the applicant/employee of the proposed adverse action; and
  • Notify the applicant/employee of the specific items forming the basis of the proposed adverse action.

You also need to comply with FCRA and ICRRA notice requirements. 

The applicant/employee has seven days to provide you with notice that the conviction history you relied on is inaccurate, or with evidence of rehabilitation or mitigating factors. This information can be provided orally or in writing.

At this point, you must delay the adverse action for a “reasonable period” to reconsider the adverse action. Hold the position open during this process. The OLSE has not specifically defined what constitutes a “reasonable period,” instead noting that it will depend upon the specific circumstances. “In general, a reconsideration period will likely be reasonable if it gives the employer an opportunity to conduct a new individualized assessment that takes into account all additional information.”

If you ultimately decide to take adverse action based on the criminal history information, the FCO requires you to notify the applicant/employee of any final adverse action.

Posting, Notice and Recordkeeping Requirements: The FCO contains several notice, posting and recordkeeping requirements.

Under the FCO, all job postings that are “reasonably likely” to reach a person seeking employment in San Francisco must state that the employer will consider qualified candidates with criminal histories in a manner consistent with the ordinance. Employers may not advertise that any person with an arrest or conviction record will not be considered for employment or may not apply for employment. This includes online postings.

You must post the official FCO notice informing applicants and employees of their rights under the FCO. The notice must be posted in a conspicuous place at every workplace, job site or other location in San Francisco that is under your control and frequently visited by employees or applicants.

The notice must be posted in English, Spanish, Chinese, Tagalog and any language spoken by at least 5 percent of the employees at the workplace.

In addition to posting the notice where applicants and employees can see it, the FCO also requires you to:
  • Send a copy of the notice to each labor union representing its San Francisco employees.
  • Provide the notice before conducting any permissible criminal history inquiry. 

You must retain records of employment, application forms and other “pertinent data and records” for a period of three years. The OLSE will also require you to submit an annual reporting form, which will be available on the OLSE website.

Protections for Applicants and Employees:You cannot retaliate against applicants/employees for exercising rights under the FCO, such as complaining about violations, participating in investigations or opposing unlawful practices. Any adverse action taken against an individual within 90 days of exercising one of these rights creates an assumption of retaliation, which you then have the burden to rebut.

There is no private right of action, but the OLSE has the authority to enforce the ordinance and refer matters to the city attorney for civil action. Administrative penalties can also be assessed for second and subsequent violations. Administrative enforcement for first offenses and during the first twelve months of the ordinance will carry less severe sanctions.

Fingerprints: Certain health-related employees must submit electronic fingerprint images to the state DOJ and are responsible for any cost associated with transmitting the fingerprint images. The following individuals are affected:
  • Certified nurse assistants and home health aides
  • Nursing home administrators
  • Administrators, program directors and fiscal officers of adult, day health care centers
  • An owner of home health agencies and private duty nursing agencies
  • Anyone having a 10 percent or greater interest in the corporation, partnership or association of home health agencies and private duty nursing agencies
  • Administrators of home health agencies and private duty nursing agencies
EEOC Guidance on Criminal Background Checks: The Equal Employment Opportunity Commission issued “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions.” The Guidance discusses how an employer’s use of an individual’s criminal history in making employment decisions could violate prohibitions against employment discrimination. The EEOC Guidance, issued in 2012, is not a federal law or regulation.

The Guidance demonstrates the EEOC’s position on a particular issue and shows what the agency will be looking for when deciding to investigate an employment practice and whether to file charges. Since the 2012 Guidance was issued, the EEOC has filed lawsuits against several companies alleging that their background check practices discriminate against protected classes.

According to the EEOC Guidance, a policy or practice that excludes everyone with a criminal record from employment will not be job-related and consistent with business necessity. Under the Guidance, an employer must demonstrate that any criminal history screening practice is both:
  • Job-related; and
  • Consistent with business necessity.

Employers commonly ask about criminal background on employment applications, using a box asking if the applicant has ever been convicted of a crime. The EEOC did not categorically ban the use of this box, but the Guidance recommends that “employers not ask about convictions on job applications and that, if and when they make such inquiries, the inquires be limited to convictions for which exclusion would be job related for the position in question and consistent with business necessity.”

The rationale for not asking on the initial application form is that the employer is more likely to objectively assess the relevance of the conviction if it becomes known once the employer has already learned of the applicant’s qualifications and experience. San Francisco has, however, “banned the box.” For more information, see “San Francisco’s Fair Chance Ordinance” below.

Under the EEOC Guidance, you can demonstrate that a criminal record exclusion policy meets the “job related and consistent with business necessity” standard by using a two-step approach consisting of a “targeted screen” of applicants plus an “individualized assessment.”

A “targeted screen” of criminal records is used to identify applicants or employees who legitimately should be screened out due to criminal records. A targeted screen of criminal records considers at least:
  • The nature and gravity of the crime
  • The time elapsed since the offense
  • The nature of the job

The EEOC recommends that employers next take the additional step and provide an opportunity for an “individualized assessment” for people excluded by the targeted screen. An individualized assessment consists of:
  • Notice to the individual that he/she has been screened out because of past criminal conduct
  • An opportunity for the individual to demonstrate that he/she should not be excluded due to the particular circumstances
  • Consideration by the employer as to whether the additional information provided by the individual warrants an exception to the exclusion and shows that the exclusion of this individual is not job related and consistent with business necessity

Ask about criminal history only when you can demonstrate that it is relevant to a specific job. Include the optional request for criminal history information only when consistent with business necessity and limit inquiries to those that are truly job-related. If you have employees in San Francisco, you must comply with the local Fair Chance Ordinance.

There has been backlash over the Guidance in federal courts and from various states challenging the presumptions made by the EEOC.9 In addition, the Guidance does not address the potential liabilities employers may face if they hire an employee with a criminal record. On the other hand, the Guidance has not been directly revoked and its recommendations carry weight.

Meticulous recordkeeping — maintaining detailed reports on applicants, background check results and whether they were hired — can help you defend your criminal background check process.

Keep information about criminal records confidential. Periodically review any background check results to ensure that they are not having a discriminatory impact on any protected classes, and retain records demonstrating the fairness of all hiring practices.

San Francisco’s Fair Chance Ordinance: San Francisco enacted the Fair Chance Ordinance (FCO), which “bans the box” and effectively eliminates the commonly used criminal history check box found on many employment applications, as well as imposing various other prohibitions and requirements related to obtaining and using criminal background information. The FCO is effective August 13, 2014. It is enforced by the San Francisco Office of Labor Standards Enforcement (OLSE). More information on the ordinance can be found by visiting the OLSE website. The FCO applies to employers who:
  • Are located or doing business in San Francisco
  • Have 20 or more employees, whether or not those employees are all located in San Francisco

In other words, it does not matter if the employer is not based in San Francisco. The OLSE provides the following example:
  • A company is based in Australia and employs 19 people in Australia and 1 person in San Francisco. Because the company employs 20 or more people total, and is doing business in San Francisco, the FCO applies to the 1 employee who is working in San Francisco.

The 20 person threshold includes owners, management and supervisorial employees. Job placement, referral agencies, and other employment agencies are also considered employers. The ordinance’s requirements and restrictions, however, apply only to employees and applicants whose duties, or prospective duties, are performed at a physical location in whole, or in substantial part, in San Francisco. The OLSE interprets “in substantial part” to mean an average of 8 hours of work performed per week in San Francisco.

For instance, according to the OLSE, if the employee who lives in San Francisco telecommutes from his/her home for a company located outside of San Francisco, that position is covered if the employee is working at least 8 hours per week in San Francisco.

The FCO applies to not only regular employees, but also to part-time workers, contract workers,contingent workers and workers from a temp agency. The FCO, as explained below, prohibits any type of criminal history inquiry on a job application. Employers in San Francisco may want to use one of the following job applications:

According to the OLSE, a company that uses a third party entity to run background checks on applicants must ensure that the third party complies with all of the FCO restrictions. Moreover, when an employer uses a temporary staffing agency or professional employer organization to employ people, both the employer and the staffing agency must comply with the FCO and both may be held responsible for noncompliance.​

The FCO does not limit an employer’s ability to choose the most qualified and appropriate candidate among the applicants for a particular job. It does not require employers to hire or give preference to an unqualified individual with an arrest or conviction record.

Off-Limit Inquiries: Under the FCO, you may never inquire about, require disclosure of or consider the following information:
  • Arrests not leading to a conviction, except unresolved arrests still undergoing criminal investigation or trial
  • Participation in or completion of a diversion or deferral of judgment program
  • Convictions which have been judicially dismissed, expunged or made inoperative
  • Convictions or determinations made in the juvenile justice system
  • Convictions that are more than seven years old (the date of conviction being the date of sentencing). According to OLSE, if the date of sentencing was more than seven years ago, information about the conviction is off-limits, regardless of when the person finished serving the sentence.
  • Information pertaining to any criminal offense other than a felony or misdemeanor, such as an infraction

These matters are considered “off-limits” and cannot be used for any reason at any stage of the hiring process.

What does “inquire” mean? Under the FCO, “inquire” means any direct or indirect employer conduct intended to gather information from or about an applicant, candidate, potential applicant or candidate, or employee, using any mode of communication. This includes, but is not limited to, application forms, background check reports and interviews.

An unresolved arrest is an arrest that is undergoing an active pending investigation or trial and has not yet been resolved. Employers must still follow state and federal law regarding criminal background checks. If there is a conflict, state and federal requirements supersede the FCO’s requirements. State and federal law mandate criminal background checks in certain industries. If you have questions about the applicability of federal or state law, please consult with legal counsel.

Timing of Non-Prohibited Inquiries: Even when you can inquire about an employee’s criminal history (non-prohibited inquiries), the FCO regulates the timing of the inquiry and the required process:

You cannot ask about criminal history on a job application or require job applicants to disclose criminal history information on the job application.

You cannot inquire about criminal history until after the applicant or employee has had the first “live” interview, or after you have extended a conditional offer of employment. Even then, you cannot inquire about criminal history information that is “off-limits.” A “live” interview includes an in-person interview and any interview using the telephone, videoconferencing or other technology.

Before making any permissible criminal history inquiry under the FCO, you must provide the applicant/employee a written notice of rights. Use the San Francisco Fair Chance Ordinance - Notice to Job Applicants and Employees. There is also a posting requirement regarding this notice. For more information, see “Posting, Notice and Recordkeeping Requirements” below.

Before obtaining a copy of any background check report, you must also comply with all federal and state notice requirements — such as those under the federal Fair Credit Reporting Act (FCRA) and the California Investigative Consumer Reporting Agencies Act (ICRAA). 

If you decide to run a background check at the permitted time, enclose the San Francisco FCO notice along with all other necessary disclosure and consent forms required by law.