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New San Francisco Ordinance Regulates Criminal Background Checks - March 14, 2014

The City and County of San Francisco, California recently enacted a broad-sweeping ordinance that limits requests for, and use of, criminal history records by employers, including city and county contractors and subcontractors.  The ordinance will take effect in August 2014.

The ordinance prohibits employers from obtaining background reports or asking applicants or employees for criminal history information until after interviewing the applicant or extending a conditional offer. The ordinance also restricts the types of criminal history information that employers can consider, and requires an “individualized assessment” of such information.

In addition to reviewing the following summary, we encourage you to read the ordinance in its entirety and consult with legal counsel on your particular situation.

Reach of the Ordinance

The ordinance generally applies to non-governmental entities employing more than 20 workers (regardless of location), including employment agencies, job referral or placement agencies, contractors and subcontractors.  The ordinance applies to jobs that will be performed in San Francisco.  And, with limited exceptions, the requirements apply to all contractors and subcontractors performing work for the city and county. (The ordinance also applies to providers of affordable housing.)

“Ban the Box” and Timing of Inquiries

Employers cannot seek criminal history information on an employment application.  Employers can only ask applicants about criminal history information, or seek information from a third party (e.g., Sterling) after either (a) “the first live interview with the person” (including via telephone) or (b) extending a conditional offer of employment.

Employers cannot seek or obtain background check information about:

  • Arrests that do not lead to convictions (unless there is an active pending investigation or unresolved trial);
  • Diversion or deferred judgment programs;
  • Expunged, dismissed or voided convictions;
  • Juvenile court convictions;
  • Convictions more than seven (7) years old; or
  • Offenses other than felonies and misdemeanors.

The ordinance also prohibits employers from considering these types of criminal history information.

Use of Criminal History Information

After receiving permitted criminal history information from an applicant or in a background check, the employer must “conduct an individualized assessment” of that information.  Employers can only consider a “Directly-Related Conviction” that “has a direct and specific negative bearing” on that person’s ability to perform the job.  As part of this analysis, the employer must “consider whether the employment position offers the opportunity for the same or a similar offense to occur.”

Before taking any “Adverse Action” (e.g., rejecting an applicant, firing or not promoting an employee), the employer must provide the applicant with a copy of the relevant report and also identify “the items forming the basis for the prospective Adverse Action.”

Within 7 days of the employer providing the notice, an applicant has the right to offer evidence to challenge the accuracy of conviction information, as well as proof of rehabilitation or other mitigating factors.  Upon such a challenge, employers must delay making an adverse decision “for a reasonable period” in order to consider this evidence.

Notices to Applicants and Employees

Before any permitted criminal background inquiry, the employer must provide the applicant or employee with a notice of rights under the ordinance.  San Francisco’s Office of Labor Standards and Enforcement (“OLSE”) will prepare a form notice.  Employers must post the notice in a “conspicuous place” at every work place and job site, and send copies to labor unions.

Employers must state in advertisements or solicitations that qualified applicants with criminal histories will be considered consistent with the ordinance.

Enforcement

OLSE will enforce the ordinance against employers, and will establish rules governing administrative enforcement proceedings.  Although the agency cannot challenge an employer’s determination that a conviction is a Directly-Related Conviction that would support an adverse hiring decision, OLSE can prosecute other violations, such as not conducting an “individualized assessment” of background check information.

During the first year the ordinance is in effect, violations will result in a warning.  For additional violations during the first year, or for first violations after the first year, administrative enforcement can result in a penalty of up to $50, increasing to up to $100 for subsequent violations.  (City contractors and subcontractors may also breach their contracts by violating the ordinance.)  San Francisco may also bring civil enforcement actions, and can obtain relief including reinstatement, back pay, payment of benefits or salary unlawfully withheld, liquidated damages of $50 payable to applicants or appropriate injunctive relief, as well as attorney’s fees and costs.

Other Requirements

The ordinance imposes record keeping and reporting requirements, and employers who cannot provide OLSE with “adequate records documenting compliance” with the ordinance are “presumed” to be in violation.  OLSE will issue rules for compliance with the recordkeeping and reporting requirements.  OLSE also has general authority to adopt regulations and guidelines to implement the ordinance’s requirements.

Applicants and employees can make anonymous complaints to OLSE.  Employers cannot retaliate against those who exercise their rights under the ordinance.