08.15.2014
San Francisco Restricts Use of Conviction Records in Employment Effective August 13, 2014

The San Francisco Fair Chance Ordinance (the “Ordinance”) took effect August 13, 2014.  The Ordinance limits use of criminal conviction information in hiring and employment in a trend informally referred to as “Ban the Box” legislation.

The Ordinance (San Francisco Policy Code, Article 49 and Administrative Code, Article 12) (the "Ordinance") mostly builds upon existing California law, making parallel requirements under city law, but adding some key provisions that go beyond state law.  Some of the overlap and additional requirements are highlighted below.

The Ordinance applies to employers with 20 or more employees, city contractors, and housing providers.  According to the City’s Frequently Asked Questions regarding the Ordinance, “The [Ordinance] applies to private employers that are located or doing business in San Francisco, and that employ 20 or more persons worldwide. This 20-person threshold includes owner(s), management, and supervisorial employees. Job placement, referral agencies, and other employment agencies are considered employers.”

The prohibition against inquiries and considerations mostly parallels California Labor Code Section 432.7.  However, the definition of "Unresolved Arrest" does not exist in the California Labor Code and is defined in the Ordinance as "an Arrest that is undergoing an active pending criminal investigation or trial that has not yet been resolved."  Under the Labor Code, a permissible inquiry may be made as to "arrests for which the applicant is out on bail or on his or her own recognizance pending trial."

The Ordinance also prohibits inquiring into "(4) A Conviction or any other determination or adjudication in the juvenile justice system, or information regarding a matter considered in or processed through the juvenile justice system," which does not appear directly addressed by California statute.

The Ordinance overlaps and exceeds state law in several prohibitions.  The Ordinance specifically addresses "(5) A Conviction that is more than seven years old," as a prohibited inquiry, which is similar to the prohibited inquiries under the California Consumer Credit Reporting Agencies Act ("CCRA") (California Civil Code Section 1785.13) and the California Investigative Consumer Reporting Agencies Act ("ICRA") (California Civil Code Section 1786.18), but which is not addressed under Labor Code Section 432.7.  Also, "(6) Information pertaining to an offense other than a felony or misdemeanor, such as an infraction," is not specified in Labor Code Section 432.7, but the Labor Code effectively prohibits such inquiries.

The Ordinance requires additional notice to be provided to individuals who will be the subject of a criminal history inquiry.  Employers must already provide notice under the Fair Credit Reporting Act ("FCRA")(15 USC Section 1681), the CCRA, and ICRA, prior to conducting background checks, so this is an additional notice that must be provided.

Similarly, the Ordinance requires an additional pre-adverse notice to be made to an applicant or employee if an adverse decision will be made based on the criminal history discovered in a report.  This builds upon existing obligations to provide pre-adverse information under the FCRA, which requires a copy of the report and a statement of rights be provided prior to the adverse action is taken.  The Ordinance additionally requires provision of (1) notice of the prospective adverse action, and the (2) specified basis for the action.  Following provision of this information, the employer must defer the adverse action for a "reasonable period of time" if within seven (7) days, the individual reports inaccuracy in the report or provides other mitigating evidence.  The employer must reconsider the action and provide final notice of the action if it proceeds with the proposed adverse action.  Such final notice is duplicative of requirements under the FCRA, CCRA, and ICRA.

The most onerous of the Ordinance requirements appears to be the requirement that job advertisements reasonably directed toward San Francisco applicants include a statement that the employer "will consider for employment qualified applicants with criminal histories in a manner consistent with the requirements of [the San Francisco Police Code, Article 49."  Thus, employers must ensure that such wording is included in its print and electronic job solicitations directed toward San Francisco applicants.

Also, employers must post notice of the Ordinance in English, Spanish, Chinese, AND any language spoken by at least 5 percent of the employees at the workplace where the poster is posted.  The notices may be obtained from the Fair Chance Ordinance website via these links in: English, Spanish, Chinese, and Tagalog.

Finally, employers must be aware that the Ordinance creates a "rebuttable presumption" that any adverse action taken against a person within 90 days of exercising rights protected by the Ordinance was taken in retaliation for the exercise of those rights."  This creates a right not in existence under state law and exposes employers to potential liability under the Ordinance for adverse actions taken within the 90-day time frame.

To visit the Fair Chance Ordinance website, you may click here.

Employers should review their applications and intake procedures to ensure compliance with the Ordinance.  Employers with questions regarding the San Francisco Ordinance may direct them to the authors.  Questions about state and federal background check requirements may also be directed to the authors or other members of the firm’s Private Labor and Employment Group with whom they are familiar.

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