Effective September 3, 2024, employers with locations or employees (including remote workers) in the unincorporated areas of Los Angeles County (ULAC) will be subject to a new Fair Chance Ordinance. To say that the new requirements are challenging is an understatement. For this reason, employers that ask about or use criminal history in making employment decisions would be well-advised to review and make immediate changes to their background screening policy and processes to comply with the new Ordinance.

Employers in California should already be aware of the California Fair Chance Act (CFCA) and the City of Los Angeles Fair Chance Initiative for Hiring Ordinance (FCIHO). Herein we set forth the new unincorporated Los Angeles County requirements by comparing them to the CFCA and the FCIHO. While the ULAC Ordinance makes certain exceptions for certain regulated employers, like banks, they will not be addressed herein and regulated entities are encouraged to seek counsel to determine if they fall into such an exception.

Coverage

Which law applies? The answer is not an easy one. More than 65 percent of Los Angeles County—2,653.5 square miles—is unincorporated. There are approximately 120-125 unincorporated areas (depending on how you define them), with the largest number located in the northern part of the County. And there are 88 incorporated cities in the County.

One of these cities, Los Angeles, has had its Fair Chance Initiative for Hiring Ordinance since 2016, which applies to employers in the City and its neighborhoods. Fortunately, the City has a website that allows employers to determine whether a location or employee is in the City and, thus, covered by the FCIHO.  

The ULAC Ordinance, on the other hand, only applies to employers or remote employees (including freelance workers, contractors, and people engaged in any form of educational or vocational training (with or without pay), among others) in the unincorporated areas of the County. This means that an employer that has employees not located in the City of Los Angeles (or one of its neighborhoods) or any other incorporated city in the County (e.g., Santa Monica, Long Beach, etc.), is covered by the ULAC Ordinance. Like the City of Los Angeles, the County has a website where employers can determine whether a particular address (for a facility or a remote worker) falls within the jurisdiction of unincorporated Los Angeles County.

Timing Requirements

California employers are already prohibited from inquiring about or considering criminal history information until after a conditional offer of employment under the CFCA. This includes ordering a background check report that includes criminal history, doing a public records search, and asking candidates the question, “have you been convicted of a crime?” The new ULAC ordinance expands on the CFCA, now making it unlawful for covered employers to ask candidates this post-offer criminal history question until after the candidate receives a copy of his or her criminal history background check report. This is a sea change and we are not aware of any other law with this requirement. Covered employers will need to remove this question from their applicant tracking system or background screening candidate entry system.

Job Solicitations

Both the CFCA and the ULAC ordinance prohibit employers from making any statement that would suggest that people with criminal histories will not be considered for employment. The City of Los Angeles requires employers to state in all solicitations and advertisements that they will consider qualified candidates with criminal histories in a manner consistent with the law.

Like the City of Los Angeles, ULAC requires employers to state that candidates with arrest or convictions records will be considered for employment in accordance with the Los Angeles County Fair Chance Ordinance for Employers and the California Fair Chance Act. As such, employers will need to add a reference to the ULAC and the CFAC in their job postings. Beyond this, however, the ULAC Ordinance imposes additional significant job posting requirements found in no other state or local fair chance law. More specifically, employers must include a list of all material job duties of the specific job position which the employer reasonably believes that criminal history may have a direct, adverse and negative relationship potentially resulting in the withdrawal of the conditional offer of employment.

Offer Letters

While the CFCA does not require any particular language in an offer letter, now the ULAC Ordinance will. To this end, covered employers must provide the following in the conditional job offer under the ULAC:

• A statement that the conditional offer is contingent upon the review of criminal history.

• A statement that the employer has good cause to conduct a review of criminal history for the specific job position with supporting justification provided in writing. The Ordinance is clear that a general statement that the employer is performing a review of criminal history due to “safety concerns” without more supporting justification is not sufficient to meet this requirement.

An employer establishes good cause if it can demonstrate any of the following: (1) the employer faces a significant risk to its business operations or business reputation unless a review of criminal history is conducted for the specific job position; or (2) a review of criminal history is necessary for the specific position due to articulable concerns regarding the safety of, or risk of harm or harassment to, the employer’s staff, employees, contractors, vendors, associates, clients, customers or the general public.

• The offer letter must be specific about any other types of information that will be reviewed by the employer (e.g., education, social media history, drug testing, etc.).

Prohibited Criminal History Information

California’s Labor Code and the CFCA make it unlawful for most employers to inquire about or consider: (1) records that did not result in a conviction; (2) diversions or deferrals that have been completed and dismissed; (3) non-felony marijuana convictions older than two years; (4) juvenile records; and (5) convictions for which the candidate has received a pardon or a certificate of rehabilitation.

ULAC adds to this list by making it unlawful for most employers to inquire about or consider: (1) convictions older than seven years measured from date of disposition (unless an exception outlined in the Ordinance applies); (2) infractions unless driving is more than a de minimis part of the job; (3) convictions that arise out of conduct that has been decriminalized since the conviction; and (4) diversions and deferrals, regardless of whether they have been completed and dismissed.

Individualized Assessments

ULAC has also changed substantially an employer’s individualized assessment requirements. The CFCA requires employers to do an individualized job related assessment, but employers are not required to provide their assessment to candidates. Similar to the City of Los Angeles, ULAC requires employers to provide to candidates their written assessment with their preliminary determination (pre-adverse) and reassessment (if the candidate provides additional information) with their final determination (adverse) notices. Whether the County will issue a form to document the assessment (like the City of Los Angeles’ form) remains to be seen.

Preliminary Determination (Pre-Adverse Action) Notice

Prior to making a final decision, the CFCA requires employers to inform the candidate of the prospective adverse action, notice of the disqualifying conviction that is the basis for the preliminary decision, a copy of the criminal history report, a statement of the right to respond and the deadline to do so, a statement that person can provide evidence challenging the accuracy of the report, mitigating circumstances or rehabilitation, and any other information the employer considered.

As noted above, both the City of Los Angeles and ULAC require employers to include their written individualized assessment with the preliminary determination notice.

ULAC goes further, however, requiring that the employer mail and email (if known) the notice to the candidate and set out the deadlines to respond in bold, caps, or underline. Moreover, ULAC requires employers to grant candidates the opportunity to present their information by phone, in person, or virtually.

Waiting Periods Between Preliminary (Pre-Adverse) and Final (Adverse) Determination Notices

California already requires employers to wait five (5) business days from “receipt” of the preliminary determination (pre-adverse action) notice and provide five (5) additional business days if the candidate advises that the criminal history information is inaccurate and they are taking steps to obtain information to support their assertion. ULAC also requires employers to wait five (5) business days from “receipt,” but candidates have fifteen (15) additional business days if they need extra time to obtain evidence of accuracy or rehabilitation.

As noted, the deadlines run from when the candidate “receives” the notice. California recently implemented regulations that removed any ambiguity over when the notice is “received” by clarifying that if an employer sends the notice through a format that does not provide a confirmation of receipt, then the notice is deemed received based on the method of delivery: (a) five calendar days if mailed within California; (b) 10 calendar days if mailed outside of California; (c) 20 calendar days if mailed outside of the United States; and (d) two business days if emailed. ULAC has the same presumptions but adds that any deadlines to respond are calculated based on when the employer mails the notice, not when it emails the notice (because again, employers must always do both, if email is known).

Final Determination (Adverse Action) Notice

California requires employers to inform the candidate of the adverse decision, of any existing procedure to challenge the decision or to request consideration, and of their right to contest the decision by filing a complaint with the California Civil Rights Department. ULAC mirrors California law in terms of the contents of the final determination (adverse action) notice, but adds the requirement that employers also advise of the right to file a complaint with the Los Angeles County Department of Consumer and Business Affairs and include the written individualized reassessment.

Delays in Background Checks

In addition to the new laws regulating employers, courts throughout the country and specifically Los Angeles are restricting access to certain personally identifiable information in court records. This includes information relating to an individual’s date of birth, which makes it difficult for background screening companies and other entities to match requests for information when providing criminal background checks. Certain courts are also restricting how much or many requests entities can request at a given time which also adds to delays in the processing and returning of background screening reports. Employers are often forced to either wait or come up with alternative ways to gather such information.

Unfortunately, the ULAC Ordinance prohibits employers from basing a decision to withdraw an offer solely on the fact there has been a delay in receiving the background check report unless the employer can show that it would suffer an undue burden in holding the position open and 10 business days have passed since the employer requested the report. If an employer withdraws the offer for this reason, it must explain to the candidate in writing why the delay is a burden to the employer.

Posting Requirements

Like the City of Los Angeles FCIHO, the ULAC Ordinance requires employers to post a notice informing candidates of their rights under the ordinance at each job site, but adds the requirement that the notice of rights also be posted on any website frequently visited by applicants and employees. The County has indicated it will put out a notice for employers to use.

Next Steps for Employers

Employers with locations, employees, and remote workers in ULAC should consider a privileged review of their background screening practices by experienced counsel. More specifically, with September 3, 2024 fast approaching, this is an opportune time to examine the background check process, including criminal history questions, as well as the job postings, offer letters, and pre-adverse and adverse action notices. Further, employers should consider the restrictions on what information, and when, can be considered for employment purposes and make adjustments to ensure optimal effectiveness and compliance.