United States: San Francisco Employers Beware: New Extensive Restrictions On Use Of Criminal Background Information

Last Updated: March 17 2014
Article by Julie A. Totten

The use of criminal background checks when hiring employees has become even more limited in San Francisco. On August 13, 2014, the recently passed Fair Chance Ordinance (Ordinance) becomes operative requiring employers doing business in San Francisco and employing 20 or more workers, regardless of location, to limit the use of an applicant's criminal history.

Limits on Job Advertisements, Applications, and Interviews

Employers are now barred from asking about or conducting a background check until the employer first determines whether the applicant meets the minimal requirements for any positions that are in whole, or in substantial part, within San Francisco. Criminal background information then may only be obtained after the first live interview (via telephone, videoconference, other technology, or in-person), or after a conditional offer of employment. This means that employment applications cannot inquire about any convictions without running afoul of the Ordinance.

Even after the first live interview, employers are still only permitted to ask about misdemeanor and felony convictions within the last seven years. Employers can never ask about (1) arrests not leading to conviction, (2) participation in a diversion program, (3) convictions that have been expunged, (4) juvenile offenses, or (5) convictions that are more than seven years old.

Before inquiring into an applicant's conviction history—after the first live interview or the conditional offer—the employer also must provide an applicant with a notice of the applicant's rights under the Ordinance and the restrictions the ordinance places on the use of criminal history information, regardless of whether the inquiry is made directly to the applicant or to a third-party consumer reporting agency. The specifics of the required notice are set out in Section 4905(b) of the ordinance.

Additionally, all job advertisements must state that the employer will consider qualified applicants with a criminal history. Employers are also required display a poster explaining employee rights under the Ordinance in each San Francisco location where applicants or employees visit and at any labor unions. The Office of Labor Standards Enforcement (OLSE) is required to publish this poster for employers by the operative date of the Ordinance. Employers are also required to maintain all records related to the hiring process for at least three years and the OLSE has a right to inspect these records upon request.

When Can You Consider Crimination Background Information?

When making an employment decision based on an applicant's criminal background information, the employer must make an individualized assessment, considering only convictions that are "Directly Related" to the position in question. A "Directly Related Conviction" is one that has "a direct and specific negative bearing on that person's ability to perform the duties or responsibilities necessarily related to the employment position." The employer must also consider the amount of time that has elapsed since the conviction, and any evidence of inaccuracy or evidence of the applicant's rehabilitation or other mitigating factors.

After conducting this analysis, if the employer ultimately decides to reject an applicant based on criminal history, the employer must provide a pre-adverse action notice and a final adverse action notice, and wait at least seven days from the date of the notice before taking the final adverse action. Then, if during the seven-day waiting period the applicant disputes the criminal background information, the employer is obligated to consider the new information and wait a "reasonable time" before taking final adverse action.

Employer Liability

For the first violation, or for any violation occurring within the first twelve months of the operative date of the Ordinance, the OLSE must issue warnings and notices to correct the problem. For a second violation, the OLSE may impose an administrative penalty of $50, and for subsequent violations, the penalty may increase to $100. Additionally, the City may bring a civil enforcement action and the available remedies include reinstatement, back pay, payment of benefits or pay unlawfully withheld, injunctive relief, payment of liquidated damages in the amount of $50.00 per day for each employee whose rights were violated, and attorneys' fees and costs.

Recommendations for Employers

Employers hiring for positions in (or substantially within) San Francisco should revise their job advertisements, applications and hiring procedures, if necessary. This is true whether the job position is for a temporary position, contracted work, or for part-time or full-time employment. Additionally, employers should retain records related to the hiring process and post the required OLSE notice when it becomes available. For further details about the new requirements, the complete ordinance can be found here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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