The so-called “ban the box” trend, referring to a common employment application check box as to whether an applicant has a criminal history, recently resulted in San Francisco’s latest employment-related law called the Fair Chance Ordinance. It becomes effective on March 14, 2014, and operative on August 14, 2014. The ordinance covers employment and housing applications, as well as requirements for city contractors and subcontractors. This article focuses on the provisions impacting private sector employers.
Rationale and Background Information
According to the law’s detailed “Findings,” surveys have revealed that up to 90 percent of employers conduct criminal background checks during the hiring process. It noted that individuals with old, and sometimes minor, criminal convictions have been discouraged from even applying for jobs due to the criminal history “box” on most employment applications. It further cited the well-established data that lack of employment and housing are significant causes of recidivism.
Before anyone leaps to the conclusion that this is either San Francisco being at the forefront or out of touch, depending on one’s point of view, four states have enacted criminal history restrictions applicable to private employers, including Hawaii, Massachusetts, Minnesota and Rhode Island. Furthermore, in April 2012, the federal Equal Employment Opportunity Commission issued an Enforcement Guidance cautioning that consideration of arrest and conviction records in hiring decisions may have an adverse racial impact and that employers must have job-related business reasons for doing so. Moreover, at least one large retailer, including Target, recently announced that it was “banning the box” and would eliminate the criminal conviction inquiry on its employment applications.
The New Ban
San Francisco’s Fair Chance ordinance applies to employers with 20 or more employees, and to jobs and job openings physically located in San Francisco. The 20 employee threshold applies regardless of where the employees are located and counts owners. It specifically includes job placement and referral agencies but excludes the City and County of San Francisco and other public sector employers.
The ordinance prohibits employers from either requiring applicants to disclose, or take an adverse action (e.g., failing to hire or firing upon discovery) due to, an arrest that did not lead to a conviction, participation in a diversion or deferral of judgment program, a conviction that was judicially dismissed or expunged, a conviction in the juvenile justice system, or aconviction that is more than seven years old.
The new law further prohibits employers from requiring applicants to disclose on any employment application the fact or details of any conviction history (including a felony, misdemeanor or other offense that resulted in probation, fine, imprisonment or parole), unresolved arrest or any of the matters described in the preceding paragraph. In short, this means eliminating the criminal conviction box on the employment application.
Such disclosures may be subsequently required, but only after either the first live interview of the applicant or after a conditional offer of employment. Prior to requiring such a disclosure, employers must provide the applicant with a notice that the City will be publishing that describes individuals’ rights and responsibilities under the law.
The New Procedures
Employers may continue to obtain background check reports and decline to hire an applicant because of a criminal conviction. However, the Fair Chance law imposes the following procedures. Prior to obtaining a background check report, employers must provide the applicant with anotice explaining that evidence of inaccuracy, rehabilitation or other mitigating factors will be taken into consideration. Employers must conduct individualized assessments, considering only “directly-related convictions” (which means the conduct leading to the conviction has a direct and specific negative bearing on the applicant’s ability to perform the duties of the job in question — and whether the job offers the opportunity for the same or similar offense to occur), the time that has elapsed since the conviction and any mitigating factor evidence. Upon declining to hire the applicant based on a conviction, the employer must provide the individual with a completed questionnaire, which the City will be publishing.
Job postings or advertisements must include a statement that the employer will consider all qualified applicants with criminal histories. Employers must retain records of employment, application forms and other data required by the law for a period of three years.
The City of San Francisco’s Office of Labor Standards Enforcement (OLSE) is charged with administering and enforcing the new law. Individuals who believe the law was violated may report it to the OLSE for investigation and potential civil action by the OLSE. However, individuals are not provided a private right of action.
Federal and State Laws Limiting Criminal History Information
All employers must be mindful of federal and state limitations on criminal background checks. For example, the federal Fair Credit Reporting Act prohibits disclosure of arrests and criminal convictions more than seven years old. Various states have additional limitations. California law, for example, prohibits preemployment inquiries regarding arrests that did not result in convictions, convictions for certain misdemeanor marijuana-related offenses, participation in pre-trial or post-trial diversion programs and misdemeanor convictions for which probation was completed and the case judicially dismissed. On the other hand, California law authorizes certain health facilities to inquire about certain arrests and convictions.
In preparation for this new law, covered employers who have (or will have) employees in San Francisco will need to review and update their hiring documents and background check procedures.