California’s Fair Chance Act is part of the Fair Employment and Housing Act (FEHA), and its primary goal is to help individuals with criminal backgrounds remove some of the barriers to finding gainful employment. Unless exempt, employers in California must, by law, minimize the use of criminal background checks. 

In fact, employers shouldn’t consider a candidate’s criminal record until after making a conditional job offer. Even then, there are specific steps employers must take to rescind the job offer due to any criminal background information. 

While the initial Fair Chance Act went into effect in 2018, updates are coming into effect in October 2023. These updates make important changes that could impact your company and its hiring practices. 

It’s important to understand what these changes mean for your business and what steps you can take to stay in compliance.  

This article provides the insights you need, including: 

• A brief history of the Fair Chance Act and the steps employers must take to remain in compliance. 
• A breakdown of the major updates set to take effect on October 1, 2023.  
• An explanation of how these changes will impact employers throughout the state of California.  
• Steps your company can take today to prepare for the upcoming changes. 

Table of Contents 

1. California’s Fair Chance Act 
2. How does the Fair Chance Act Work 
3. What changes are coming? 
4. How do these changes impact you? 
5. How your company can ensure compliance  

California’s Fair Chance Act 

The Fair Chance Act regulates when and how employers in California can use a criminal background check for employment as part of the recruitment process. 

While these rules were initially enacted in 2018 as part of the Fair Employment and Housing Act (FEHA), new updates are set to take effect on October 1, 2023. Many of these new rules help clarify, restrict, or add to the existing laws already in place. 

As an employer, it’s critical to understand these rules and the upcoming changes, as well as how these laws may impact your recruitment practices and workforce management policies. 

This article explains what the Fair Chance Act is, how it works, and how the upcoming changes might impact employers throughout the state of California.  

What Is the Fair Chance Act?

The Fair Chance Act is a California law with the goal of reducing the barriers some individuals with criminal background checks face when seeking gainful employment. It’s commonly referred to as the “Ban the Box” law, referring to removing the box on applications for employment that reference criminal backgrounds.  

In basic terms, the act prevents employers with five or more employees from running criminal background checks or even asking applicants about their criminal history prior to extending a conditional job offer. There are some exemptions for positions that require a clean criminal background, but the majority of employers must follow these rules. 

The law also forbids employers from considering criminal histories that involve any arrest not followed by a conviction; sealed, dismissed, or eradicated convictions; or convictions that have been expunged.  

Learn more about criminal background checks. 

How Does the Fair Chance Act Work?

The Fair Chance Act prohibits your company from using criminal background checks or any information pertaining to a candidate’s criminal record during the initial recruitment process. 

You can’t ask candidates about their criminal history on a job application or during the interview process. Only after you extend a conditional job offer can you legally conduct a criminal background check for employment. 

If, at this point, your company decides to rescind the job offer, you can do so under certain circumstances. You must first conduct an individualized assessment that takes into account the nature of the crime, the length of time since the crime occurred, job duties, and other relevant factors. 

At the end of this assessment, if your company still wants to rescind the job offer, you must provide the candidate with a written notice that includes an explanation of your decision and the specific criminal records you used. 

You must also give the candidate 5 days from the date of receipt to respond before officially rescinding the job offer. If the candidate responds, you must consider their response and reassess your job offer. 

In cases where your company still wants to rescind the job offer, you must send a formal letter notifying the candidate of your final decision. 

The state’s Civil Rights Department enforces this law. Employers who fail to maintain compliance with the Fair Chance Act could face governmental scrutiny and penalties and open themselves up to a lawsuit.  

What Changes Are Coming?

Starting October 1, 2023, employers must comply with updated changes to the Fair Chance Act. Many of these updates help clarify some issues in the law that many believed were too broad. Some of the major changes set to take effect include the following. 

Expanded Scope

The regulation updates expand the scope of the law to include both applicants and current employees. This means employers can’t conduct criminal background checks on current employees in regard to promotions, training programs, terminations, or lay-offs. 

Just as with candidates, employers can run a background check after making an offer. This change could have an impact on your company’s policy on continuous criminal monitoring. 

Job Postings

New regulations forbid employers from stating in their job postings that the company won’t consider candidates with criminal records. It’s important to evaluate your current job postings and remove any references to background checks. There are a few exceptions to this rule, but new updates narrow down which roles qualify for this exemption. 

Limitation of Exclusion

The updates to the Fair Chance Act clarify which employers are exempt from these rules. 

Rather than simply stating that roles requiring background checks are exempt from these standards, the new guidelines explicitly state that the only roles exempt from these practices are those where local, state, or federal laws require the employer to run background checks.  

The new law further clarifies that employers filling job roles requiring background checks from third-party entities, separate from the employer, such as a licensing board, aren’t exempt from following the Fair Chance Act.  

Voluntary Information

If a candidate voluntarily provides information regarding their criminal background during the recruitment process, employers must disregard this information, and they can’t use it when making their initial hiring decisions. 

Employers can use this information only after making a conditional employment offer, and they must follow the steps listed above if they want to rescind the offer.  

Expanded Definition of Employer

These new updates don’t just pertain to standard employers. The new regulations now include third-party entities that conduct background checks on behalf of the employer. 

Disclose Right to Contest

Employers must include a disclosure in the letter to rescind a job offer that explains the candidate’s right to contest the decision within 5 days. Upon request, employers must give candidates an additional 5 days to respond. 

This letter must also notify the candidate of their right to file a complaint with the Civil Rights Department if they think the decision was against regulations. 

Initial Assessment

A major change to the Fair Chance Act is the scope of the individualized assessment that employers must conduct before rescinding a job offer. 

These regulations now list several factors that employers must consider before making a decision, such as a job duty assessment, the age of the applicant at the time of the crime, the exact conduct that led to the crime, and whether the crime led to incarceration. 

Additionally, employers are now expected to consider any extenuating circumstances, such as past substance abuse, domestic violence, age, trauma, sexual assault, or sex trafficking, that may have played a role in the crime and whether these issues no longer pose a threat. To properly complete this assessment, employers may need to contact the candidate prior to sending out a notice. 

This early contact may help clear up some issues with the criminal record before any action is taken and provide the candidate with time to collect the necessary documentation.   

Evidence Employers Must Consider

Employers must give candidates the opportunity to respond, and they must accept and examine any mitigating evidence the candidate provides. For example, if the candidate can provide proof that they were a victim of domestic violence, which led to their criminal charges, employers must accept this evidence, evaluate it, and possibly reconsider the job offer. 

Restricted Information

Under the new regulations, employers can’t force candidates to provide information pertaining to personal matters, such as sexual assault, domestic violence, or medical information. While the candidate has the right to provide this information if they so choose, employers can’t question candidates regarding these issues or request documentation. 

Clarity of 5-Day Waiting Period

The new updates remove any ambiguity regarding when the 5-day response time for a candidate begins. If employers choose not to use a source of delivery that proves the date of receipt, the new law makes the date of receipt clear. The waiting period for notifications sent via email begins 2 days after you send the email. For notifications sent by mail, the date of receipt is calculated as follows:  

• Mailed from California: 5 calendar days 
• Mailed from outside California: 10 calendar days 
• Mailed from outside the United States: 20 calendar days  

How Do These Changes Impact Your Ability to Run a Criminal Background Check for Employment?

The initial Fair Chance Act already limits many employers’ ability to conduct a criminal background check for employment before making an offer. 

However, these updated regulations make this process even more difficult. This is because these changes clarify the meaning of many aspects of the law that were previously deemed too ambiguous.  

In nearly all cases, unless the role clearly requires a clean criminal history in accordance with local, state, or federal laws, employers can’t conduct a criminal background check until they make a conditional job offer. 

These new updates don’t mean you must hire candidates with criminal records. It only means you must do your due diligence to determine if the applicant’s criminal record could prevent them from adequately performing their job duties or put your company at great risk.  

These updated rules can stretch out the hiring process and force your company to take extra steps to find the right candidate. On the other hand, taking a closer look at the circumstances behind a candidate’s criminal record may allow you to hire a qualified candidate that you may have otherwise overlooked.  

These new regulations may also impact your workforce management process. For example, if your company is currently using continuous criminal monitoring, this may put your organization out of compliance with the Fair Chance Act. 

While it’s not impossible to run a background check on your current workers, you may only do so after you’ve already made an offer pertaining to a promotion or training program. 

How Your Company Can Ensure Compliance

It’s critical to take the time to reevaluate your company’s hiring practices. No doubt, your top priorities are to keep your company safe, hire the right candidates, and ensure your hiring practices remain in compliance with the Fair Chance Act. To accomplish these goals, there are several steps you can take today to ensure your hiring practices are in compliance with these new rules. 

Reevaluate Hiring Practices:

The first step is to reevaluate your current hiring practices to ensure each stage of the process meets the Fair Chance Act regulations. 

Set Standardized Recruitment Policies:

It’s essential to set standardized recruitment policies to ensure criminal records are properly handled across the board. Providing your HR team, hiring managers, and supervisors with adequate training can ensure your policies are properly followed. You can also limit who has access to criminal record information. 

Revamp Your Continuous Criminal Monitoring Program:

Since the new changes include current employees, now may be the time to revamp your continuous criminal monitoring program. After October, you can only use these criminal background reports after you make an initial decision pertaining to terminations, lay-offs, training opportunities, and promotions. 

Rewrite Job Postings:

Take the time to review your current job postings and job applications to remove any wording pertaining to criminal background and how this information may be used to determine employment.  

Update Job Descriptions:

If your current job descriptions are included as part of the application process, you need to remove any wording pertaining to criminal background checks. You may also want to clarify some aspects of your job description to make it clear why certain criminal records could prevent an employee from performing the job. For example, if you’re hiring an accountant, you wouldn’t want to hire someone with a history of theft. 

Obtain Proper Documentation:

When rescinding a job offer, you must provide documentation showing the source of the criminal record. Make sure you’re obtaining accurate and official criminal background information and can prove the source of this data. 

Work with Third-Party Vendors:

Working with a third-party vendor that specializes in criminal background checks for employment in California can help you ensure compliance. These agencies stay up-to-date on the latest rules and regulations and can help you obtain the records and documentation you need to conduct a proper background check. 

Learn more about creating the right criminal background check policy. 

With October right around the corner, now’s the time to start preparing for these changes. Taking steps now, rather than later, will ensure your company remains in compliance, which can reduce the risk of penalties or lawsuits. 

Contact Cisive today to learn more about our professional criminal background check services and how our company can help your company remain compliant with the Fair Chance Act both today and in the future.