July 1, 2020

There are many state and local rules regarding running employee background checks in California.

Pursuant to the Fair Chance Initiative for Hiring Ordinance (“Fair Chance Ordinance”), for instance, the City of Los Angeles requires all Los Angeles employers of 10 or more employees to follow these steps after learning that a job applicant has a criminal history:

• Perform a written assessment linking “the specific aspects of the applicant’s criminal history with risks inherent in the duties of the employment position.” The City’s website provides an assessment form for this purpose.
• Give the applicant an opportunity to provide information or documents for the employer to consider before making a final decision, such as evidence that the criminal record is inaccurate or that the applicant has been rehabilitated.  As part of this step, provide the applicant with the written assessment (see the first step above) and any other information that supports not hiring the applicant.
• Wait at least five business days after giving the above notice before making a final decision about the job position.  If the applicant provides information or documents to consider, perform a written reassessment.  If the employer still decides not to hire the applicant, notify the applicant in writing, attaching the reassessment to the notice.

The Fair Chance Ordinance also requires that any job solicitations and advertisements in the City of Los Angeles state that the employer will consider qualified candidates with criminal histories in a manner consistent with the law. Employers must also conspicuously post in the workplace a notice describing the Fair Chance Ordinance, and must send the notice to any applicable labor union or collective bargaining agreement representative. The notice is available on the City website.

The state of California also adopted a statewide Fair Chance Act, effective January 1, 2018, with requirements similar to the Fair Chance Ordinance described above.

There are other requirements, from federal, state, and local law, regarding the notice employers must give to job applicants and employees at various points before and after running background checks.  As the above examples illustrate, laws and local regulations governing notice of background checks are rigorous and ever-changing.  Heavy penalties apply to employers who fail to comply with all current regulations.

Below are some points from federal and state law regarding the notice that employers must give to job applicants and employees regarding background checks.

Investigations conducted by agencies
An employer who hires an investigator to conduct a background check must first provide notice and obtain consent from the applicant or employee, as required by the federal Fair Credit Reporting Act (FCRA).  In California, pursuant to the California Investigative Consumer Reporting Agencies Act (ICRAA) [Cal. Civ. Code §§ 1786, et seq.], an applicant/employee gives consent by signing a notice and consent form containing the following information:

• A statement that an investigation regarding the applicant’s/employee’s character, general reputation, personal characteristics, and mode of living will be made;
• The name, address and phone number of the investigative agency that will compile the report;
• A summary of the person’s right, under Civil Code section 1786.22, to view the information;
• A statement that the investigation report will be used for employment purposes only, including hiring, promotion, retaining or re-assigning an employee; and
• A check-box for the applicant/employee to request a copy of the report.

The notice and consent form must be a stand-alone document, signed by the applicant/employee no more than three days before the employer requests the investigation.  An employer who denies employment based on the report must notify the applicant/employee of that fact and again provide the name and address of the investigative agency that compiled the report.

If the employer makes a preliminary decision not to hire a job applicant based on a background check, the FCRA requires the employer to send the applicant a “pre-adverse action notice,” the background check report, and a statement of rights.  The applicant can then, if the applicant wishes, dispute the accuracy of the report within a reasonable amount of time.  If the employer decides not to hire the applicant, it must send the applicant an “adverse action notice” and the credit reporting agency’s contact information, and must notify the applicant of the right to file a complaint with California’s Department of Fair Employment and Housing (DFEH).

Investigations conducted directly by the employer
If an employer conducts the background check itself, the notice requirements of the FCRA do not apply, but the employer must still comply with state and local notice requirements.

Generally, information obtained through a background check need not be disclosed to the applicant/employee unless it is a matter of public record.  Public records here mean “records documenting an arrest, indictment, conviction, civil judicial action, tax lien or outstanding judgment.”  Those public records must be provided by the employer to the applicant/employee within seven days of obtaining them unless the applicant/employee has waived the right to them in writing.

Even if the applicant/employee waived the right to public records, the employer must still provide the public records if it takes an adverse employment action based on information obtained from the public records.

Important exception to the above:  Whether conducted by an investigator or by an employer, the legal requirements of advance notice, consent, or providing documents do not apply if the investigation is conducted due to a suspicion of existing misconduct or wrongdoing.

Need more information?
ESKRIDGE LAW may be contacted by phone (310/303-3951), by fax (310/303-3952) or by email (geskridge@eskridgelaw.net).  Please visit our website at eskridge.hv-dev.com.

This article is based on the law as of the date posted at the top of the article.  This article does not constitute the provision of legal advice, and does not by itself create an attorney-client relationship with Eskridge Law.