May 22, 2020

Although legislation pertaining to background checks of applicants and employees has clarified and somewhat eased requirements, the procedures remain quite rigorous as can be seen from the following overview, and heavy penalties (of $10,000 and up) still apply.

The Fair Credit Reporting Act (“FCRA”) protects employers and applicants, by promoting accuracy, fairness, and privacy for information obtained in any agency reports.  All California employers must comply with FCRA guidelines when conducting employment background checks.  FCRA guidelines apply even if a hiring company uses a background check prepared by a third-party provider.

Investigations conducted by agencies:
An employer who hires an agency to conduct a background check must provide notice and obtain consent from the applicant/employee.  This is achieved by having the applicant/employee sign 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 information contained in 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.

Investigations conducted directly by the employer:
The FCRA provisions do not apply when an employer conducts a background check on its own.

If an employer conducts the investigation, no advance notice to the applicant/employee is required, and information obtained need not be disclosed unless it is a matter of public record.  Public records are defined here as “records documenting an arrest, indictment, conviction, civil judicial action, tax lien or outstanding judgment.” Copies of public records must be provided within seven days unless the applicant/employee has previously waived the right to receive them by checking a box on the application, employee manual, or any other written form.  If the employer takes adverse employment action based on information obtained from public records, copies must be provided even if the applicant/employee has waived his or her right to receive them.

Important exception:
Whether conducted by an investigator or by an employer, there is no requirement for notice, consent, or providing copies of documents if the investigation is conducted due to suspicion of misconduct or wrongdoing.

In Connor v.  First Student Inc., (2018) 5 Cal.5th 1026, the California Supreme Court held that the Investigative Consumer Reporting Agencies Act (“ICRAA”) and the Consumer Credit Reporting Agencies Act (“CCRAA”) also applied to certain employer background checks.  This means employers may need to comply with these regulations as well.

Ban the Box:
California Assembly Bill 1008, which took effect on January 1, 2018, introduced “ban the box” legislation.  The passing of this law prohibits employers from asking about an applicant’s criminal history before offering employment.  Once there is an employment offer, an employer may not then deny the applicant employment due to a prior conviction.  This law applies to all misdemeanor and felony charges in California.

The law aims to remove barriers from individuals applying for employment who have a criminal conviction. The purpose is to give the employer a chance to evaluate the applicant based on who they are, and not on their prior convictions.

The Ban the Box legislation only applies to private employers in California with 5 or more employees.

Like most laws, there are several exceptions.  An employer may ask about criminal convictions for:

  • 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 any state, federal, or local law to conduct criminal background checks for employment purposes or to restrict employment based on criminal history

An employer may not consider criminal history not ending in a conviction, including: an arrest not ending in conviction (except for certain exceptions); a referral to or participation in a pre-trial or post-trial diversion program; or a conviction that has been sealed, expunged, or dismissed.

Employers can still ask about criminal convictions after making a conditional offer of employment.

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.