New Regulations Further Limit Employers’ Use Of Criminal History
LGC Staff
Thu May 4, 2017
3:42 PM UTC

By Samantha Panosyan

The California Fair Employment and Housing Council has finalized and adopted new regulations set to go into effect July 1, 2017. These new regulations (found here), which largely follow guidance provided by the Equal Employment Opportunity Commission (“EEOC”), limit the extent employers can use criminal history when making employment decisions.

The new regulations clarify two points in existing California law:  (1) business necessity, as well as job-relatedness, is necessary to justify a policy or practice that has an adverse impact on a protected class; and (2) “adverse impact” is synonymous with “disparate impact” as defined by the federal EEOC.  The new regulations prohibit employers from considering criminal history if doing so will result in an adverse impact on individuals within a certain protected class.

Job applicants bear the initial burden of proving that the policy has an adverse impact on a protected class.  If proven, the burden then shifts to the employer to establish that the policy is job related and consistent with a business necessity.  To show this, the employer must demonstrate the policy is appropriately tailored taking into several account factors:  (1) the nature and gravity of the offense or conduct; (2) the passage of time; and (3) the nature of the position held or sought.  However, even if an employer can demonstrate job-relatedness and consistency with a business necessity, an applicant may still bring a claim if the applicant can show there is a less discriminatory alternative available that advances the employer’s legitimate concerns.

The new regulations, however, expand the types of criminal history employers may consider. Currently, employers cannot ask applicants to provide information concerning convictions for marijuana-related offenses that are more than two years old, detentions or arrests not resulting in conviction, convictions that have been dismissed or sealed, and information concerning a referral to or participation in a work/education program as part of probation.  The new regulations prohibit employers from considering only non-felony marijuana convictions for marijuana possession if the conviction is more than two years old.

Moreover, the new regulations provide that prior to disqualifying an applicant, the employer must provide the applicant with notice of the disqualifying conviction and give the applicant a reasonable opportunity to present evidence that it is inaccurate.  If the applicant is able to do so, the employer cannot consider the conviction in the employment decision.  This notice, however, is only required when the employer learns of the criminal history through a source other than the applicant.  Additionally, this notice is different than the notice required under the Fair Credit Reporting Act (“FCRA”) for information obtained in a third-party background check.

California employers should review their policies to ensure that their use of criminal history information in hiring complies with the new regulations, as well as ensuring continued compliance with the FCRA and other California regulations.  For more information about the new regulations or any other employment issues, please contact Samantha Panosyan in LGC’s San Diego office.

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