New California Regulations: Consideration of Criminal History in Employment Decisions

by | Jun 26, 2017 | Summer 2017 Newsletters

By Susan Breslauer, SPHR-CA, SHRM SCP

New California regulations entitled “Consideration of Criminal History in Employment Decisions Regulations”, will limit an employer’s right to use criminal background information in hiring and other employment decisions.  These regulations (or “the Act”) approved by the Fair Employment and Housing Council (“FEHC”), the state agency charged with enforcing civil rights laws in California, will take effect right around the corner on July 1, 2017.

The FEHC regulations are largely based on existing federal guidelines, specifically the Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964, issued by the U.S. Equal Employment Opportunity Commission (“EEOC”) on April 25, 2012.

The FEHC regulations expand on the EEOC requirements and place additional burden on employers in selection and testing of applicants, placement, promotion and transfer of employees, specific practices in the use of criminal records and permissible selection devices.  In Section 11017.1 of the regulations, it states: “Employers are prohibited under the Act from utilizing other forms of criminal history in employment decisions if doing so would have an adverse impact on individuals on a basis enumerated in the Act that the employer cannot prove is job-related and consistent with business necessity or if the employee or applicant has demonstrated a less discriminatory alternative means of achieving the specific business necessity as effectively.”  Therefore, it is evident that employers must exercise even more caution as of July 1st when using criminal records in making employment decisions. 

Existing law currently prohibits CA employers from considering or seeking the following types of criminal records or information concerning:

  • An arrest or detention that did not result in conviction;
  • An arrest, detention, processing, diversion, supervision, adjudication, or court disposition while a person was in juvenile court;
  • A non-felony conviction for possession of marijuana that is two or more years old;
  • A referral to or participation in a pre-trial or post-trial diversion program; or
  • A conviction that has been judicially dismissed, expunged or sealed

These rules and the new regulations do not prohibit an employer from considering criminal history. Quite simply, they are intended to prevent employers from discriminating against employees in protected classes when the use of conviction records results in an adverse impact on protected classes, e.g., race, national origin and gender.   The regulations do not just pertain to hiring decisions, but they have to be taken into account when promoting, reprimanding or terminating an employee.  If the employee feels his/her rights have been violated, he/she may use this regulation to sue the employer.

The FEHC regulations require that employers must establish policy that is “job-related and consistent with business necessity” when using criminal information.  They can do so by demonstrating that the policy or practice is tailored to the job and takes into account at least the following factors:

  • The nature or gravity of the offense or conduct;
  • The time that has passed since the offense or conduct and/or completion of the sentence; and
  • The nature of the job held or sought

Employers may justify using a criminal record to determine if an individual is right for a job using one of the following approaches:

  • Rather than just looking at whether or not an applicant has a criminal record, conduct a personalized search (aka “individualized assessment”) of the circumstances of an offense. This must involve notice to the adversely impacted employee or applicant (before any adverse action is taken) that s/he has been screened out due to a criminal conviction.  The individual must have a reasonable opportunity to show that the exclusion should not apply to their circumstance. Subsequently, the employer must consider when the individual’s information deserves an exception to the disqualification.
  • Use a “bright-line” conviction disqualification test (One that is not “individualized” as defined in the Act, akin to an across-the-board standard) to demonstrate whether one’s offense does or does not merit a risk to his/her position. In this case, the employer does not consider an individual’s “individualized” circumstances when making the employment decision based on criminal history. Conviction information that is more than seven years old will not likely be defensible

The burden of proof has been shifted to the employer to show that a background check is job-related and consistent with business necessity if an applicant or employee establish adverse impact. 

The new regulations further require that before an employer may take adverse action (such as declining to hire or promote, discharging, or laying off) based on a conviction history obtained by a source other than the applicant or employee (e.g., through a credit report or internally generated research) the employer must give the individual notice of the disqualifying conviction and a reasonable opportunity to present evidence that the record is factually inaccurate.

Compliance with federal or state laws or regulations that mandate a criminal history screening processes or requiring that an employee or applicant possess or obtain any required occupational licenses (such as peace officers, employees at health facilities and pharmacies where there is access to patients or medical or controlled substances) constitute rebuttable defenses to an adverse impact claim by an individual.

BEST PRACTICES AND ACTIONS REQUIRED OR RECOMMENDED: 

  • If you have a background check policy, it should be revised to ensure that off-limits information is not being requested or considered.
  • Eliminate employment applications, policies and practices which automatically disqualify all applicants for all positions based on a criminal record. Consult legal counsel if you wish to have a “bright line” disqualification.
  • Comply with the notice requirement in the regulations prior to taking adverse action.
  • Review the regulations and ensure all requirements are followed.
  • Train supervisors and managers involved in the hiring process on appropriate screening inquiries.
  • Comply with Fair Credit Reporting Act (FCRA) notice requirements in the background check process.
  • If you have employees in San Francisco and Los Angeles, review related ordinances (aka “ban-the-box”) to ensure criminal history on job applications is removed. See our Ezine article Ban-the-Box Article – Spring 2017 for more details.  These cities have much more restrictive requirements around background checks.
  • The Silvers HR sample employment application was revised in December 2016 and again this week removing criminal background inquiries from the basic form (This information may not be asked in San Francisco and Los Angeles in the initial stages of the screening process.) and updating the marijuana convictions language. We recommend using this application if you have not already adopted it.
  • If you require criminal background checks due to contracts or industry-specific requirements, ensure background check forms state that any convictions arising from a juvenile court proceeding need not be listed.

Lastly, there is an Assembly Bill (AB 1008)  in the California Legislature that, if passed, will further restrict the use of criminal conviction information in the employment setting.  And it requires a tedious notification process.  We’ll keep you posted on this.  (The FEHC regulations here look quite do-able compared to AB 1008’s requirements as drafted.)

A copy of the FEHC “Consideration of Criminal History in Employment Decisions Regulations” can be found here

A copy of the EEOC Enforcement Guidance on the Consideration of Arrest and Conviction Records can be found at:

https://www.eeoc.gov/laws/guidance/arrest_conviction.cfm

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