Seyfarth Synopsis: Since 2018, California has had a comprehensive Fair Chance Act (CFCA), which places a number of restrictions on employers using criminal history for hiring and other employment purposes. San Francisco and the City of Los Angeles followed suit, and as we discussed here, the California Civil Rights Department made a host of changes to its CFCA regulations, which were effective October 1, 2023. Apparently believing that the CFCA did not provide sufficient protections to applicants and employees with criminal histories, Los Angeles County passed a fair chance ordinance that imposes on employers onerous compliance obligations, discussed here. And now, San Diego County joins the fray, with its own Fair Chance Ordinance (FCO) applicable to unincorporated areas of the County, which became effective October 10, 2024.
The California Fair Chance Act
The CFCA (in a nutshell) imposes the following requirements on California employers when making employment decisions about criminal history:
- Wait until after a conditional offer of employment to inquire about or consider criminal history, which includes ordering a criminal history background check report, asking the applicant directly about their criminal history, or conducting internet or other searches to locate information about an applicant’s criminal history. The amended regulations make clear that this prohibition also applies to current employees.
- Do not put anything in a job advertisement or posting indicating that a person with criminal history will not be considered.
- Ignore information that an applicant volunteers about their criminal history before an offer. Instead, set it aside and revisit the issue after making an employment offer.
- Conduct an individualized, job-related assessment before rejecting an applicant due to criminal history. When considering the nature and gravity of the offense or conduct, the amended regulations clarify that an employer may consider whether a disability, trauma, domestic or dating violence, sexual assault or stalking, human trafficking, duress or other similar factors contributed to the offense or conduct.
- Follow a two-step notice process if action is taken based on the criminal history, which is similar, but not identical, to the Fair Credit Reporting Act’s (FCRA) notice requirements (and applicable even if the criminal history was not discovered from a FCRA consumer report (e.g., self-disclosure, internet search, etc.)). These are referred to as the “preliminary determination” and “final determination” notices.
- In terms of the deadline for an applicant to respond to the preliminary determination notice, which is five business days from the applicant’s receipt of the notice, the regulations 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.
The CFCA has very narrow exceptions, including for those employers who are required by any state, federal, or local law to conduct criminal background checks or to restrict employment based on criminal history.
San Diego Fair Chance Ordinance
Fortunately for employers with five or more employees doing business in unincorporated areas of San Diego County, the FCO does not go as far as the Los Angeles County ordinance. In fact, the San Diego County ordinance largely mirrors the CFCA, as outlined above. There are a few additional requirements employers covered by the San Diego County FCO should consider:
- The FCO applies to remote workers.
- The individualized assessment must be in writing, but employers do not have to provide their written assessment to the applicant—importantly, the City of Los Angeles and Los Angeles County ordinances require employers to include the assessment and reassessment with the notices.
- The preliminary determination notice must advise applicants of their right to file a complaint with the California Civil Rights Department (CRD) and the County of San Diego Office of Labor Standards and Enforcement (OLSE). This is new because California requires notice of the right to file a complaint with the CRD, which means that employers covered by the San Diego FCO must include this statement in their preliminary and final determination notices.
- The employer must hold the position open during the consideration period, absent exigent circumstances.
- Employers must retain records for a period of one year from the application of employment.
- The FCO does not provide aggrieved applicants with a private right of action. Rather, starting July 1, 2025, employers can face civil penalties for non-compliance ranging from $5,000 to $20,000.
What San Diego’s Fair Chance Ordinance Mean for Employers
Employers with locations, employees, and remote workers in unincorporated areas of San Diego County should consider a privileged review of their background screening practices by experienced counsel. Since the San Diego and Los Angeles County ordinances cover a large area of Southern California, and apply to remote workers, this is an opportune time for all California employers to examine their 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.
