California Fair Chance and Salary History Regulations

Posted by: Accurate Background

November 29, 2017

California Continues to Impact Employers with Ban the Box and Salary History Inquiry Restrictions

Governor Brown recently signed two new laws in California that may impact your hiring processes and practices.  Both laws will go into effect on January 1, 2018, and restrict employers’ use of criminal history and salary history during the employment screening process.

California Bans the Box

The Basics

  • Location:  California
  • Legislation: Assembly Bill 1008
  • Type: Ban the Box
  • Effective: January 1st, 2018

Key Takeaways

  • Applies to employers with five or more employees.
  • May not ask about criminal history prior to a conditional offer.
  • Employers must conduct an individualized assessment if considering taking adverse action as a result of an applicant’s criminal history.
  • Employers have additional obligations in the event they intend to take adverse action

Who does this effect?

The law applies to employers with five or more employees.

What is prohibited in the law?

Employers may not:
  • Include any question that seeks the disclosure of an applicant’s conviction history on any application for employment prior to making a conditional offer;
  • Inquire into or consider an applicant’s conviction history until after the employer has made a conditional offer of employment;
  • Consider, distribute, or disseminate information about any of the following while conducting a conviction history background check in connection with any application for employment:
    • Arrest not followed by conviction, except in the circumstances as permitted in California Labor Code Section 432.7;
    • Referral to or participation in a pre-trial or post-trial diversion program;
    • Convictions that have been sealed, dismissed, expunge, or statutorily eradicated pursuant to law;
  • Interfere with, restrain, or deny the exercise of, or the attempt to exercise, any right provided under Section 12952.

Can employers still consider and take adverse action based on an applicant’s criminal history?

Yes, but employers that intend to deny an applicant, in whole or in part, because of their conviction history must make an individualized assessment of whether there is a direct and adverse relationship with the job that would justify their denial of such job. The results of an individualized assessment may, but is not required to, be committed to writing.  In making an assessment, employers are to consider all of the following:
  • The nature and gravity of the offense or conduct;
  • The time that has passed since the offense or conduct and completion of the sentence; and
  • The nature of the job held or sought.
If an employer makes a preliminary decision that an individual’s conviction history disqualifies the applicant, the employer must notify the applicant of the preliminary decision in writing.  This notice must contain all of the following:
  • Notice of the disqualifying conviction(s) that are the basis for the preliminary decision to rescind the offer.
  • A copy of the conviction history report, if any; and
  • An explanation of the applicant’s right to respond to the notice before the decision becomes final and the deadline to respond. The explanation shall inform the applicant that the response may include submission of evidence challenging the accuracy of the conviction history report that is the basis for rescinding the offer, evidence of rehabilitation or mitigating circumstances, or both.
The applicant has at least 5 business days to respond before the employer may make a final decision. If, within the 5 business days, the applicant notifies the employer in writing that the applicant disputes the accuracy of the conviction history report that was the basis for the preliminary decision and that the applicant is taking specific steps to obtain supporting evidence, then the applicant shall have 5 additional business days to respond. Employers shall consider information submitted before making a final decision. If an employer makes a final decision to deny an application because of conviction history, the adverse action notice shall include:
  • The final denial or disqualification, and the employer may, but is not required to, justify or explain the employer’s reasoning;
  • Any existing procedure the employer has for the applicant to challenge the decision or request reconsideration; and ü The right to file a complaint with the department.

Are there exceptions?

Yes, please review and discuss with your legal counsel to determine if you meet one of the exceptions provided.  The law also notes that these remedies shall be in addition to and not in derogation of all other rights and remedies that an applicant may have under any other law, including any local ordinance.

California Bans Salary History Inquiries

The Basics

  • Location:  California
  • Legislation: Assembly Bill 168
  • Type: Salary History
  • Effective: January 1st, 2018

Key Takeaways

  • An employer shall not rely on the salary history information of an applicant for employment as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant.
  • An employer must provide the pay scale for a position in which the applicant is applying for, upon request.
 

Who does this apply to?

All California employers, including state and local government employers and the Legislature.

What is prohibited in the law?

An Employer shall not:
  • Rely on the salary history information of an applicant for employment as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant; nor
  • Seek salary history information, including compensation and benefits, about an applicant for employment, orally or in writing, personally or through an agent.

What other requirements impact employers?

Employers must provide an applicant the pay scale information concerning the position if the applicant inquiries.

Are there any exceptions?

  • If an applicant voluntarily, and without prompting, discloses salary history information to a prospective employer, the employer is not prohibited from considering or relying on that voluntarily disclosed salary history information in determining the salary for that applicant; and
  • This does not apply to salary history information disclosable to the public in accordance with federal or state law. Please review and discuss with your legal counsel to determine if you meet one of the exceptions provided.

Recommendations

We recommend reading the entire legislation to determine the impact this may have on your organization, as well as review and discuss with your legal counsel your organization’s policies and procedures to ensure compliance with the changing laws. Please note:  The information provided above is strictly for educational purposes.  It is not intended to be legal advice, either expressed or implied.  Accurate Background recommends that you consult with your legal counsel regarding all employment regulations.