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What is the Fair Chance Act?

The California Department of Fair Employment and Housing (DFEH) recently announced updated regulations to California’s Fair Chance Act of 2018. This Act, also known as “Ban the Box,” prohibits private and public sector employers with five or more employees from inquiring about a job applicant’s criminal record before making a conditional offer of employment. The law is designed to help those with criminal histories obtain gainful employment.

New Updates to the Fair Chance Act

As of October 1, 2020, new regulatory updates went into effect for the Fair Chance Act. The DFEH recently released a Frequently Asked Questions document to explain the basic tenants of the Act in its new form. The major takeaways include:

  • The definition of “applicant” now includes those who begin work before the employer conducts a post-offer review of criminal history. This means an employer cannot claim an individual has lost his or her status as an “applicant” when he or she began working for the employer, even if a criminal history check had not yet been completed.
  • Labor contractors and union hiring halls must now also comply with the regulations when selecting workers for inclusion in pool or availability lists.
  • While employers are prohibited from considering referral to or participation in a pre-trial or post-trial diversion program, employers may consider these programs as evidence of rehabilitation or mitigating circumstances after a conditional offer has been made if offered by the applicant as evidence of rehabilitation or mitigating circumstances.
  • Employers should keep in mind that local laws and ordinances vary and could potentially subject an employer to additional regulations on criminal history checks beyond those required by the Fair Chance Act.

Exceptions to the Fair Chance Act

The updates also clarify that the Fair Chance Act does not apply to certain positions at health care facilities, farm labor contractors, positions with state criminal justice agencies, or to any position where an employer is required by another law to conduct background checks or restrict employment based on criminal history. Although employers for these exempted positions may conduct pre-offer criminal history checks on applicants, an employer’s use of this information may still be considered discriminatory if it has an adverse impact on individuals who fall within a legally protected category such as race, gender, or national origin. In such cases, the employer must be able to prove that the consideration of an applicant’s criminal history is job-related and consistent with business necessity—and even then, it will be considered unlawful if there is a less discriminatory way to meet the business need.

Conclusion

The expanded regulations related to the Fair Chance Act affect all employers in California with five or more employees.  To navigate these regulations and ensure compliance, employers should consider engaging an experienced employment attorney.