Can Employers Run Background Checks in California?

If you are seeking employment in California, you may be asked to submit a background check at some point in the hiring process. While employers can legally run background checks in California, there are restrictions regarding when the check can be run and what can be looked at. Because it has become increasingly common for employers to look at an applicant’s criminal history, it’s important to know what these restrictions are. Our team at Kyle Todd, P.C. is here to help you understand the guidelines for legal background checks in California and the protections that are provided to job applicants.

What is the Fair Credit Reporting Act (FCRA)?

California is rife with state and federal regulations covering how employers may obtain and consider background check information for use in hiring and personnel decisions. The Fair Credit Reporting Act (FCRA) is a federal law that governs how employers execute, obtain, and manage consumer reports including standard pre-employment and current employment-related background checks. It protects information collected by consumer reporting agencies and credit bureaus, medical information companies, and tenant screening services.

The FCRA guarantees the applicant a copy of the background check and allows them to file a dispute if the background check contains inaccurate or incomplete information. California employers, like all employers, are required to follow FCRA guidelines only when using a third-party provider to access consumer reports or background checks within the hiring process. If organized through a third-party provider, the employer must:

1. Provide the applicant with written notice that a background check and report may be required;
2. Obtain the applicant’s permission to conduct a background check via an authorization form;
3. Obtain specific permission if the job requires the collection of medical information;
4. Provide notice if the employer intends to use the applicant’s neighbors, friends, or associates as character references, or if the employer will interview these people about the applicant’s “character, general reputation, personal characteristics, or mode of living.”; and
5. Notify the applicant if the information contained in a background check is used to make an adverse hiring decision.

California State Laws Governing Background Checks

Given the 2018 California Supreme Court ruling known as Connor v. First Student, Inc., both the Investigative Consumer Reporting Agencies Act (ICRAA) and the Consumer Credit Reporting Agencies Act (CCRAA) also apply to certain employer background checks. California employers must now comply with both laws in addition to ensuring their background checks remain compliant with all applicable federal and state laws. While the ICRAA ensures reporting is limited to criminal convictions and open cases, it also requires that the name of the agency performing the report be disclosed to the applicant. Secondly, it adheres to the 7-year limitation under the FCRA and extends this measure to apply to employees who make over $75,000, unlike the federal act. The CCRAA follows alongside ICRAA in most ways but also indicates that the report will be at no charge to the subject.

The California Information Privacy Act (CIPA) establishes even stricter requirements for employers who hire third-party companies to conduct their background checks, as opposed to those who perform them in-house. CIPA does require employers who perform their own background checks to give applicants the option to “opt-in” to receive a copy of their reports. The checkbox must be located either in the job application or in a written notice of the background check. If choosing to opt-in, the applicant must receive a copy of the report within three days of when the employer receives them. A “clear and conspicuous” notice must be issued in writing to an applicant if hiring a third party to facilitate and must cover the “nature and scope” of the background check.

If the third party intends to interview the applicant’s references, the employer must:

1. State the purpose of the investigation;
2. Give the applicant contact information for the investigation agency;
3. Give the applicant a summary of their rights to see and copy any reports about them; and
4. Provide the applicant with a checkbox they can check if they want to receive a copy which must be sent within three business days of receiving the completed report.

Finally, California’s Labor Code 432.7 prohibits employers from asking a job applicant about certain aspects of their criminal record including criminal charges that did not end in conviction, pre-trial or post-trial diversion programs, or dismissed or sealed convictions.

Ban the Box Laws

Many prospective employees are asked about their criminal background when they apply for a job. It is not unusual for an application to have a box asking applicants to check if they have ever been convicted of a crime. As of January 1, 2018, this is no longer allowed in the State of California under extensions to its Fair Housing Employment Act also known as a “ban the box” law.

“Ban the Box” laws are intended to give ex-offenders the opportunity to have an employer evaluate the applicant based on their qualifications and not simply be eliminated because of their criminal record. California’s ban the box law prohibits employers from inquiring into an applicant’s criminal history before making a conditional offer of employment. Even after making an offer of employment, an employer cannot deny the applicant because of a conviction without making an individualized assessment. It also simultaneously bars employers from considering any criminal conviction, expunged or not, prior to making a conditional job offer. California’s “Ban the Box” law applies to all private employers in the state with 5 or more employees.

While the law prohibits employers from inquiring about an individual’s criminal history, there are a number of exceptions to note. The law does not apply to the following positions:

• A position for which a state or local agency is required by law to conduct a conviction history background check;
• A position with a criminal justice agency;
• A position as a Farm Labor Contractor; or
• A position where an employer or agent is required by a state, federal, or local law to conduct criminal background checks for employment purposes or to restrict employment based on criminal history.

Los Angeles and San Francisco’s Fair Chance Ordinances

Effective January 22, 2017, the Los Angeles Fair Chance Initiative for Hiring Ordinance applies to employers located or doing business in the City of Los Angeles and employ 10 or more employees. Under the ordinance, employers must do the following when considering an applicant’s criminal history (regardless of source):

1. Perform a written assessment that links the applicant’s criminal history with risks inherent in the duties of the employment position sought by the applicant;
2. Provide the applicant a “Fair Chance Process” giving them an opportunity to provide information or documentation to consider before making a final decision. This could include evidence that the criminal record is inaccurate, evidence of rehabilitation or other mitigating factors;
3. Include alongside a pre-adverse action notice, a copy of the written assessment mentioned above, and any other information supporting the employer’s proposed adverse action; and
4. Wait at least 5 business days to take adverse action or fill the position. If the applicant provides new information, the employer must be asked to reconsider and provide a written assessment prior to making their final decision.

San Francisco was California’s first city to enact a ban-the-box law via the Fair Chance Ordinance Article 49 on August 13, 2014. The regulation requires that employers with five or more employees working in San Francisco who intend to inquire about and consider criminal history also must:

1. Provide the applicant with a copy of the Office of Labor Standards Enforcement’s (OSLE) Fair Chance Act Notice before inquiring about criminal history or ordering a background check;
2. Post the OLSE Notice in a conspicuous place at every workplace, job site, or other location in San Francisco under the employer’s control frequently visited by their employees or applicants; and
3. Send a copy of this notice to each labor union or representative of workers with which they have a collective bargaining agreement.

What Does a California Background Check Show?

Employers in California can ask for pre-employment background checks that disclose several items of information including past criminal convictions, any negative information on a credit report, and schools that a person attended as well as dates of attendance. A background check may gather information from several different sources including criminal/arrest records, workers compensation reports, and DMV records.

Is Any Information Off-Limits?

Based on background check limitations, a report will not contain any information that extends beyond the previous seven years. Additionally, there are other restrictions regarding the type of information that can be included. Restricted information can include:

• Arrests that did not lead to a conviction;
• Participation in pre-or post-trial diversion programs;
• Sealed records;
• Juvenile records; and
• Non-felony marijuana convictions over 2 years old

All of Us or None Vs. Hamrick: Restrictions to Background Checks Increase

As of July 28, 2021, the California Court of Appeal has ruled that a date of birth and/or a driver’s license number cannot be used to identify individuals in an electronic search of the criminal index of court records. This ruling thus even further restricts the opportunity for employers to perform criminal background checks on California job-seekers.

Can an Employer Deny Employment Based on Background Checks in California?

Technically, California job applicants can be denied employment based on the findings of their background check; however, before denying employment, an employer must conduct an individualized assessment of the results. They must consider the nature and severity of the offense,  how long ago the offense was made, and how it may relate to the type of job being applied for. If an employer chooses not to offer employment, they must follow the requirements listed above under the Fair Employment and Housing Act.

Victim of Background Check Discrimination? Contact Kyle Todd, P.C. Today

As a job-seeker in the State of California, you have the right to a non-biased application process. You also have the right to defend your convictions if they are used against you during your attempt to gain employment. If for example you have been convicted of illegal drug use and have provided evidence that you have completed a rehabilitation program, you may be well within your rights to file a lawsuit against an employer who discriminated against you. Wrongful background check discrimination is illegal in the State of California. If you have any questions about background checks or your rights after being denied employment due to a past conviction, contact the employment law firm of Kyle Todd, P.C. Our team will work with you every step of the way to ensure you receive the justice you deserve. Contact Kyle Todd, P.C. today online or call (866) WORK-LAW.