6.2 California Fair Chance Act (Ban the Box) & Criminal Background Checks

6.2 California Fair Chance Act (Ban the Box) & Criminal Background Checks

Executive Summary: The California Fair Chance Act, codified in California Government Code § 12952 and enforced under the Fair Employment and Housing Act (FEHA) by the Civil Rights Department (CRD), fundamentally transforms pre-employment background screening. Operating under the principle of "Ban the Box," California employers with five (5) or more employees are strictly prohibited from asking about, searching for, or considering an applicant's criminal history until a bona fide conditional offer of employment has been extended. Even after a conditional offer, an employer cannot categorically reject an applicant; it must conduct a documented individualized assessment evaluating the conviction against job duties. If an employer intends to revoke the offer, it must follow a strict statutory procedural sequence: issuing a written preliminary notice, providing at least five business days for candidate rebuttal, considering rehabilitation evidence, and issuing a formal final notice with CRD appeal rights.

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Scope and Core Prohibitions of the Fair Chance Act

Enacted to reduce recidivism and eliminate employment barriers for the roughly one in three adult Californians with an arrest or conviction record, Government Code § 12952 applies broadly to private and public employers with 5 or more employees.

The "Ban the Box" Rule: Timing of Criminal Inquiries

Under Government Code § 12952(a), it is an unlawful employment practice for an employer to:

1. Include on any application for employment any question that seeks the disclosure of an applicant's conviction history before a conditional offer of employment has been made.
2. Inquire into, investigate, or consider the criminal history of the applicant until after the employer has extended a conditional offer of employment to the applicant.

Blanket Disqualification Statements Prohibited

Under Civil Rights Department regulations (2 CCR § 11017.1), employers cannot include blanket exclusion language in job advertisements, postings, or application materials. Statements such as:

• "Must have a clean background"
• "No felons need apply"
• "Must pass a criminal background check to be interviewed"

are per se statutory violations. Employers cannot run internet searches, check social media, or search public court databases regarding an applicant's criminal record prior to extending a conditional offer.

Categories of Criminal Records That Can NEVER Be Considered

Even after extending a bona fide conditional offer of employment, California law strictly enumerates categories of criminal history that an employer is categorically prohibited from inquiring into, considering, distributing, or disseminating at any point in the hiring process:

┌─────────────────────────────────────────────────────────────────────────────┐
│            CRIMINAL RECORDS CATEGORICALLY BANNED UNDER CALIFORNIA LAW       │
├─────────────────────────────────────────────────────────────────────────────┤
│ 1. Arrests Not Leading to Conviction (Labor Code § 432.7)                   │
│    • Arrests, detentions, or citations that did not result in conviction    │
│    • Open or pending charges MAY be reviewed, but an arrest alone cannot    │
├─────────────────────────────────────────────────────────────────────────────┤
│ 2. Pre-Trial and Post-Trial Diversion Programs (Labor Code § 432.7)         │
│    • Successful completion of drug, mental health, or misdemeanor diversion │
│    • Deferred entry of judgment programs                                   │
├─────────────────────────────────────────────────────────────────────────────┤
│ 3. Dismissed, Sealed, or Expunged Convictions (Labor Code § 432.7)          │
│    • Convictions dismissed pursuant to Penal Code § 1203.4, 1203.4a,        │
│      1203.41, 1203.42, or 1203.45                                          │
│    • Convictions vacated or legally eradicated by pardon or judicial order  │
├─────────────────────────────────────────────────────────────────────────────┤
│ 4. Juvenile Court Records (Labor Code § 432.7 & Gov. Code § 12952)         │
│    • Any adjudication in juvenile court or sealed juvenile delinquency file │
├─────────────────────────────────────────────────────────────────────────────┤
│ 5. Non-Felony Marijuana Convictions Older Than 2 Years (Labor Code § 432.8) │
│    • Misdemeanor or infraction convictions for marijuana possession under   │
│      Health & Safety Code §§ 11357(b), (c), or 11360(c) older than 2 years  │
└─────────────────────────────────────────────────────────────────────────────┘

[!CAUTION] The Pending Arrest Exception: Under Labor Code § 432.7, an employer may ask an applicant about an unresolved, pending arrest for which the individual is currently out on bail or on their own recognizance awaiting trial. However, the employer cannot base an adverse employment decision on the pending arrest itself; the employer must assess the underlying conduct and whether that conduct, if proven, directly impacts job duties.

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The Mandatory Individualized Assessment Process

If an applicant's criminal conviction history is discovered after a conditional offer of employment has been made, the employer cannot automatically revoke the offer. California law prohibits blanket disqualification policies (e.g., "our policy prohibits hiring anyone with a felony within the last 7 years").

The Three Mandatory Green / FEHA Factors

Under Government Code § 12952(c)(1)(A), the employer must make an individualized assessment of whether the applicant's conviction history has a direct and adverse relationship with the specific duties of the job that justify denying the applicant the position. In conducting this assessment, the employer is legally required to consider three factors (derived from the landmark EEOC Green v. Missouri Pacific Railroad ruling and codified in FEHA):

1. The Nature and Gravity of the Offense or Conduct:
   • The specific conduct that led to the conviction (not merely the broad statutory label).
   • Whether the crime involved violence, theft, dishonesty, or physical harm.
   • Whether the offense was a felony or a misdemeanor.
   • The context and environment under which the conduct occurred.
2. The Time That Has Passed Since the Offense or Completion of the Sentence:
   • How many years have elapsed since the criminal conduct took place.
   • The amount of time that has passed since release from incarceration or completion of probation/parole.
   • Sociological and criminological evidence demonstrates that as time passes without subsequent offenses, recidivism risk declines to the level of individuals with no criminal record.
3. The Nature of the Job Held or Sought:
   • The specific, actual job duties and responsibilities of the position.
   • The environment where the job is performed (e.g., remote home office vs. entering private customer residences vs. working on an open warehouse floor).
   • The level of supervision and oversight the worker will receive.
   • Whether the position provides access to vulnerable individuals (children, elderly, patients), confidential financial information, or valuable employer assets.

Direct and Adverse Nexus Required

The employer must determine whether there is an objective, demonstrable link between the specific criminal conduct and the core duties of the job. For example:

• Disqualifying an applicant with a 6-year-old conviction for driving under the influence (DUI) from an open role as a warehouse forklift operator or commercial delivery driver may demonstrate a direct and adverse nexus.
• Disqualifying the same applicant with a 6-year-old DUI from a role as an on-site data entry clerk with no driving responsibilities lacks a direct and adverse nexus and violates Government Code § 12952.

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Adverse Action: Preliminary Notice, Rebuttal Window & Final Notice

If the employer completes the individualized assessment and reaches a preliminary determination that the applicant's criminal history disqualifies them from the position, the employer must execute a formal, multi-step adverse action procedure.

┌─────────────────────────────────────────────────────────────────────────────┐
│                     FAIR CHANCE ACT ADVERSE ACTION TIMELINE                 │
├─────────────────────────────────────────────────────────────────────────────┤
│  [CONDITIONAL OFFER EXTENDED]                                               │
│         │                                                                   │
│         ▼                                                                   │
│  [Background Check Discloses Conviction History]                            │
│         │                                                                   │
│         ▼                                                                   │
│  [Mandatory Individualized Assessment Conducted (3 Factors)]                │
│         │                                                                   │
│         ▼ (If preliminary intent to disqualify)                             │
│  [WRITTEN PRELIMINARY NOTICE ISSUED]                                        │
│    • Identify specific disqualifying conviction                             │
│    • Enclose copy of background report                                      │
│    • Explain right to respond and submit evidence                           │
│         │                                                                   │
│         ▼                                                                   │
│  [CANDIDATE REBUTTAL WINDOW: AT LEAST 5 BUSINESS DAYS]                      │
│    • From date of receipt (add 5 calendar days if sent by CA mail)          │
│    • If candidate gives written notice disputing report accuracy:           │
│      MANDATORY 5 ADDITIONAL BUSINESS DAYS (Total: 10 Business Days)         │
│         │                                                                   │
│         ▼                                                                   │
│  [EMPLOYER REVIEWS REBUTTAL & REHABILITATION EVIDENCE]                      │
│         │                                                                   │
│         ├───────────────────────────────┬───────────────────────────────┐   │
│         ▼                               ▼                               │   │
│  [Evidence Overcomes Nexus]     [Disqualification Upheld]               │   │
│  Candidate Hired                WRITTEN FINAL NOTICE ISSUED             │   │
│                                 • Final adverse decision explanation    │   │
│                                 • Internal appeal/grievance procedures  │   │
│                                 • Right to file complaint with CRD      │   │
└─────────────────────────────────┴───────────────────────────────────────┴───┘

Step 1: Written Preliminary Notice of Intent to Revoke Offer

Under Government Code § 12952(c)(2), the employer must notify the applicant of the preliminary disqualification in writing. The notice must contain all of the following:

1. Identification of Disqualifying Conviction: Explicitly identifying the specific conviction(s) that serve as the basis for the preliminary decision.
2. Copy of Background Report: Enclosing a complete, unredacted copy of the criminal history report or background check obtained by the employer.
3. Explanation of Right to Respond: Detailed notice informing the applicant of their statutory right to respond to the notice before the decision becomes final, and that the applicant may submit evidence challenging the accuracy of the record, evidence of rehabilitation, or mitigating circumstances.

Step 2: The Mandatory Five-Business-Day Rebuttal Window

Under Government Code § 12952(c)(3), the applicant must be permitted at least five (5) business days from the date of receipt of the notice to respond. The calculation of this window follows strict legal rules:

• Business Days Defined: Business days exclude Saturdays, Sundays, and legal state holidays.
• Date of Receipt Mechanics: If the notice is transmitted electronically (email), receipt is deemed to occur on the day sent. If transmitted by standard postal mail, California Code of Civil Procedure rules require adding mailing transit days (e.g., 5 calendar days for an address within California, 10 days out of state).
• Mandatory 5-Day Extension for Record Accuracy Disputes: If the applicant notifies the employer in writing within the initial five business days that they are actively disputing the accuracy of the conviction history report with the reporting agency, the employer must grant an additional five (5) business days (providing a minimum total of 10 business days) for the applicant to obtain and submit evidence.

Step 3: Employer Review of Mitigating and Rehabilitation Evidence

During the rebuttal window, the applicant may present evidence demonstrating rehabilitation or mitigating facts, including:

• Evidence of error in the background report (e.g., identity theft, misattributed records, incorrect felony vs. misdemeanor classification).
• Evidence that the conviction was expunged, dismissed, or sealed under Penal Code § 1203.4.
• Satisfactory completion of probation, parole, community supervision, or court-mandated counseling.
• Letters of recommendation from parole officers, community leaders, substance abuse counselors, or former employers.
• Educational attainment, vocational certifications, or continuous post-conviction employment history.

Under Government Code § 12952(c)(4), the employer is legally obligated to consider all submitted evidence before making a final decision.

Step 4: Written Final Notice of Disqualification

If the employer considers the applicant's response and decides to uphold the revocation of the conditional job offer, the employer must issue a written final notice containing:

1. The final denial or disqualification determination;
2. Any existing internal procedure the employer maintains for the applicant to challenge the decision or request reconsideration; and
3. Written notice of the applicant's statutory right to file an administrative complaint with the Civil Rights Department (CRD).

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Heightened Local Fair Chance Ordinances

California municipalities have utilized their local police powers to enact "Ban the Box" ordinances that impose even more rigorous constraints than the state Fair Chance Act.

1. Los Angeles Fair Chance Initiative for Hiring (LAMC § 189.00 et seq.)

• Coverage: Private employers with 5 or more employees performing at least two hours of work per week within the City of Los Angeles.
• Mandatory Written Assessment Form: Before issuing a conditional offer revocation, the employer must complete a formal, written individualized assessment using the City's mandated Fair Chance Assessment Form, documenting the specific reasoning across all three factors.
• Mandatory Written Reassessment: If the applicant submits rebuttal evidence within the 5-business-day window, the employer must perform a written reassessment evaluating the newly submitted evidence and provide a copy of this written document to the candidate alongside the final notice.

2. San Francisco Fair Chance Ordinance (SF Police Code Art. 49)

• Coverage: Employers with 5 or more employees globally if the position involves work within San Francisco.
• 7-Year Lookback Restriction: San Francisco employers are strictly prohibited from inquiring into or considering any conviction that is more than seven (7) years old, measured from the date of sentencing.
• Pre-Screening Notice: Employers must provide an official FCO notice to applicants before conducting any background check.
• Decriminalized Offenses: Convictions for conduct that has since been decriminalized (such as adult recreational cannabis offenses) can never be considered.

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California ICRAA vs. Federal FCRA Requirements

When employers retain third-party consumer reporting agencies (CRAs) to conduct background checks, they must comply with both the federal Fair Credit Reporting Act (FCRA, 15 U.S.C. § 1681 et seq.) and the California Investigative Consumer Reporting Agencies Act (ICRAA, Civ. Code § 1786 et seq.).

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Common Exam Traps

[!WARNING] Exam Trap 1: The Pre-Offer Background Check Consent Form A common employer violation occurs when an employer includes a background check consent authorization on the initial job application or asks candidates to sign a background authorization during the first interview. Even if the background check is not run until later, soliciting consent or asking about background checks prior to a conditional offer violates Government Code § 12952.

[!WARNING] Exam Trap 2: Counting Calendar Days Instead of Business Days An employer emails a preliminary disqualification notice on Thursday at 5:00 PM and revokes the job offer on the following Tuesday morning, arguing that four calendar days have passed and the candidate failed to reply. This violates the Fair Chance Act. The candidate is entitled to five business days, excluding weekends and holidays. The response window does not close until the following Thursday at 5:00 PM.

[!WARNING] Exam Trap 3: Expunged Records Under Penal Code § 1203.4 When an applicant successfully completes probation and obtains a judicial dismissal under California Penal Code § 1203.4 (commonly termed "expungement"), the applicant is legally entitled to answer that they have never been convicted of that crime. If an employer uncovers an expunged record through an out-of-date background report, considering that record violates Labor Code § 432.7 and triggers substantial statutory damages.