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Background Checks: Understanding the Law In California

The use of background checks has become more prevalent in our society. One area where background checks are now routinely used is in employment. Many employers now run background checks on applicants during the hiring process. 

It is estimated that approximately 1 out of every 3 Americans has been arrested or convicted of a crime. This statistic is concerning to job applicants and employers hiring for jobs. Job applicants worry that their criminal history will prevent them from getting a job. Employers may be tempted to only hire applicants without a criminal background but there are two problems with this. First, because so many Americans have an arrest record, it limits the pool of applicants. Second, it may be illegal.

There are federal laws that regulate background checks, such as the Fair Credit Reporting Act, but they are very broad. States, and cities, are stepping in and passing laws to help regulate the use of background checks in employment and eliminate some of the bias associated with them. California has a number of laws governing background checks that both applicants and employers need to be aware of. abide by when running a background check on a potent

The Fair Credit Reporting Act (FCRA) (LINK TO IT) is the federal statute governing background checks. Key FCRA provisions include:

  • Notifying applicants for employment that a background check is required for the job;

  • Getting the applicant’s written permission to run the background check;

  • Preventing the disclosure of an applicant’s criminal conviction if it occurred more than 7 years from the date of the report, assuming the position pays less than $75,000 a year;

  • Providing applicants with a copy of their background check; and

  • Providing applicants with the right to file a dispute if the background check contains incorrect information.

Ban the Box Laws. These laws have been, and continue to be, enacted in cities and states across the country. The purpose of a Ban the Box law is to prevent employers from asking about an applicant’s criminal history before offering them a job. It essentially removes the question about an applicant’s criminal history from the initial employment application. After an employer makes a “conditional” offer of employment, meaning that an applicant must meet certain conditions including passing a background check, employers can run a background check.

California Fair Chance Act AB 1008(LINK) is California’s Ban the Box law. It is applicable only to private employers with 5 or more employees and is intended to prevent employers from immediately eliminating applicants because they have a criminal history. Employers who do find a criminal history are then required to take a holistic approach to hiring and look at factors including:

  • The nature of the crime

  • How, or if, the crime relates to the duties of the job;

  • How much time has passed since the conviction; and

  • The seriousness of the offense.

The California Information Privacy Act (CIPA) was established to expand the FCRA. It covers both employers who do their own, in-house, background check and employers who hire a third-party to do background checks.

  • In House Background Checks. CIPA requires that there be a box on either the job application or the written notice to the applicant that a background check is being run, that allows applicants to “opt-in” and receive a copy of their background check. Applicants must be given a copy of the background check within three days.

  • Third-party background checks - CIPA requires that employers provide applicants with a “clear and conspicuous” notice. The notice must be written and disclose the “nature and scope” of the background check, ie, what records will be searched.

CA Labor Code 432.7 applies to both private and public employers in California. While employers are allowed to ask potential applicants about criminal charges that are currently pending, CA Labor Code 432.7 prohibits employers from asking potential applicants questions about:

  • Criminal charges that did not end with a conviction;

  • Convictions that were either sealed or expunged (legally removed so they no longer exist); and

  • Pre, or post, trial diversion programs. These programs exist to “divert” certain offenders from a traditional trial to a less traditional path like probation or supervision.

Investigative Consumer Reporting Agencies Act (ICRRA). Like the CIPA, the ICRRA also seeks to expand on the more limited protections of the FCRA. Provisions include:

  • Criminal convictions, arrests, summary offenses and misdemeanors older older than 7 years, regardless of salary level, are not reportable on background checks;

  • Any arrests, pardons or expungements, that did not lead to a conviction are not reportable at all; and

  • Only criminal convictions (within the last 7 years) and open cases can be reported on background checks

Anti-discrimination laws. Employers must make sure that they are not running afoul of both state and federal employment discrimination laws when running background checks. For example, if an employer has a blanket policy that denies employment to all applicants with a criminal history, that policy would likely be found to violate discrimination law because minorities, African-American’s in particular, have a higher rate of conviction than Caucasians do. Therefore what seems to be a neutral policy is actually not because it unfairly discriminates against African-Americans.

This article is intended to convey generally useful information only and does not constitute legal advice. Any opinions expressed are solely those of the author, not LawChamps.

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