Updated July 31, 2023: The Council’s Modifications to Employment Regulations Regarding Criminal History discussed in this Insight have just been approved by the Office of Administrative Law, and the modified regulations will go into effect on October 1, 2023. Key changes from the initial proposal include:

• Evidence of rehabilitation or mitigating circumstances submitted after an employer notifies an applicant of the preliminary decision to disqualify may only be voluntarily provided by the applicant or by another party at the applicant’s request. 
• The final definition of “Applicant” has been expanded even further to include “an existing employee who is subject to a review and consideration of criminal history because of a change in ownership, management, policy or practice.”
• The “Introduction” paragraph previous found in Article 2, § 11017.1 of the proposed regulations was not ultimately adopted.

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Employers that rely on criminal background checks to vet candidates know all too well that they must comply with a legion of statutes, ordinances, and regulations.  On December 15, 2022, the Civil Rights Council (“Council”) of the California Civil Rights Department (“Department”) released its latest draft revisions to the Fair Employment and Housing Act (FEHA) regulations that govern employers’ use and consideration of criminal history in employment decisions under Cal. Code Regs. Tit. 2, § 11017.1.  These changes were made in response to written comments on earlier proposed regulations received during a 45-day public comment period that ended August 10, 2022.¹ The following summarizes the primary changes in the latest round of proposed modification to the FEHA regulations regarding criminal history.  As it stands, the changes are likely to be adopted in full.

Introduction to Regulations²

In a proposed introductory section to the regulations, the Council seeks to clarify that “with limited exceptions,” employers have no legal obligation to check the criminal histories of applicants or current employees.  If employers choose to do so, they must abide by the legal limitations set forth in the regulations. 

Individuals with claims under the Fair Chance Act³ may file a complaint for the Department to investigate or may obtain an immediate right-to-sue notice.

Prohibition of Consideration of Criminal History Prior to a Conditional Offer of Employment⁴

Only if an employer or employer’s agent is required by law to conduct criminal background checks can any of the enumerated exceptions to the prohibition against inquiring about or using criminal history prior to making a conditional offer apply.  If a state, federal, or local law requires another entity (e.g., occupational licensing board) to conduct a criminal background check, that will not suffice to exempt the employer from the prohibitions “in this subsection and other requirements of this section.”

If an applicant volunteers information about their criminal history before receiving a conditional offer, the employer may not consider any of such information it is prohibited from considering under subsection (b) of the current proposal, which prohibits consideration of certain types of criminal history. Unless an enumerated exemption to the prohibition against inquiring about or using criminal history prior to making a conditional employment offer applies, the employer also may not consider any other volunteered conviction history information until after it has decided whether to make a conditional employment offer.

Requirements if an Employer Intends to Deny an Applicant the Employment Conditionally Offered Because of the Applicant’s Conviction History⁵

The Council proposed additional considerations for the individualized assessment an employer must perform when it considers rescinding a conditional offer of employment based solely or in part on the applicant’s conviction history.  In determining what constitutes a “direct and adverse relationship” that warrants rescinding the conditional offer, the Council clarified that an applicant’s possession of a benefit, privilege, or right required in order to perform the job by a licensing, regulatory, or government agency or board is “probative” of the conviction history’s not being directly and adversely related to the duties of the job.  The Council also added specific factors to consider for each of the “nature and gravity of the offense or conduct,” “time that has passed since the offense or conduct and/or completion of the sentence,” and “nature of the job held or sought” prongs of the individualized assessment.

To the extent an applicant voluntarily provides evidence of rehabilitation or mitigating circumstances before or during the initial individualized assessment (when that evidence would otherwise follow being notified of the right to respond to the preliminary decision to rescind the conditional employment offer), it must nevertheless be considered as part of the initial individualized assessment.  After an employer notifies an applicant in writing of a preliminary decision to disqualify based on the applicant’s conviction history and offers the opportunity to submit evidence of rehabilitation or mitigating circumstances, any such evidence (including documentary evidence) must be optional and may only be provided by the applicant voluntarily.  Evidence of rehabilitation or mitigating circumstances the employer may consider includes (but is not limited to):

• Whether the conviction led to incarceration, the applicant’s conduct during incarceration, including “participation in work and educational or rehabilitative programming and other prosocial conduct”;
• The applicant’s employment history since the conviction or completion of sentence;
• The applicant’s community service and engagement since the conviction or completion of sentence, including but not limited to volunteer work for a community organization, engagement with a religious group or organization, participation in a support or recovery group, and other types of civic participation; and/or
• The applicant’s other rehabilitative efforts since the completion of sentence or conviction or mitigating factors not captured in the above subfactors.

An employer may not:  refuse to accept additional evidence voluntarily provided by an applicant at any stage of the hiring process; require an applicant to submit any of the additional evidence described in this paragraph of the regulations; require an applicant to provide a specific type of documentary evidence; or require an applicant to disclose their status as a survivor of domestic or dating violence, sexual assault, stalking, or comparable statuses or the existence of a disability.

Employers Seeking the Work Opportunity Tax Credit⁶

An employer must maintain “any forms, documents, or information used to complete the forms described in this section [on the Work Opportunity Tax Credit (WOTC)] in confidential files separate from the applicant’s general personnel file and shall not use or disseminate these forms, documents, or information for any purpose other than applying for the WOTC.”

Definitions⁷

The Council proposed expanded definitions of the following key terms for purposes of section 11017.1 only:

• Applicant includes “existing employees who have applied or indicated a specific desire to be considered for a different position with their current employer.”
• Employer includes “any direct and joint employer; any entity that evaluates the applicant’s conviction history on behalf of an employer, or acts as an agent of an employer, directly or indirectly; any staffing agency; and any entity that selects, obtains, or is provided workers from a pool or availability list.”

The above proposed modifications were subject to a 15-day written comment period, which ended on December 30, 2022.  The schedule for the Council’s next meeting in 2023 has not yet been publicly released.

In light of these impending changes in California, employers that use criminal records to vet candidates should consider a privileged review of all of the various policies, procedures, and other documents related to the screening process (e.g., job applications, offer letters, guidelines for recruiters, adjudication standards, pre-adverse action notices, etc.).  With the proliferation of new laws and ordinances, it is more important than ever for employers to keep abreast of developments regarding this topic nationwide.⁸