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San Francisco Bans the Box and More (Employers)

By Michael Klazema on 3/4/2014

This new city ordinance, known as the Fair Chance Ordinance, places restrictions on, and establishes procedures for, the use of criminal history information by employers, certain housing providers, and City contractors and subcontractors. This update looks at the restrictions placed on employers. The parts of the ordinance discussed below go into effect on August 13, 2014.

Applicability  

The restrictions apply to employers who are located or doing business in the City and employ 20 or more persons, regardless of location, including the owner or owners, and management and supervisorial employees. But the ordinance only applies to the workers in San Francisco, and to workers who only spend some time in San Francisco.

The ordinance also appears to apply outside of traditional employer-employee relationships. It defines “employment” to mean any occupation, vocation, job, or work, including but not limited to temporary or seasonal work, part-time work, contracted work, contingent work, work on commission, and work through the services of a temporary or other employment agency, or any form of vocational or educational training with or without pay. This clearly appears to include individual contractors and individual agents who are not traditional employees.

Required Notices

The ordinance mandates certain notices be given to the applicant or employee at certain times. The employer must provide a copy of a notice that the Office of Labor Standards Enforcement will issue to the applicant or employee before making an inquiry about conviction history (either by asking the individual or by a criminal history search). This notice will describe restrictions and requirements that the law imposes on employers and rights of the applicant. It must also be posted in a conspicuous place at every workplace, job site, or other location in San Francisco that is frequently visited by applicants and prospective applicants. It must be posted in English, Spanish, Chinese, and any language spoken by at least 5% of the employees in the workplace or job site.

Before obtaining a copy of a background check report, employers must comply with all state and federal notice requirements including the California Investigative Consumer Reporting Agencies Act, California Civil Code, and the Federal Consumer Reporting Act.

Finally, the ordinance compels employers to give notice in all hiring solicitations or advertisements that the employer will consider for employment qualified applicants with criminal histories in a manner consistent with the law.

Information The Employer Is Banned From Considering

The ordinance bans any inquiries about an applicant’s criminal history on a job application form. Also banned are any inquiries about criminal history, including asking applicants or potential applicants to disclose conviction and unresolved arrest history, and including running a background check, until after the first live interview with the applicant or after a conditional offer of employment is made.

If the timing is proper, and notice is given, employers may inquire about criminal history and receive information through a background check report. However, employers are banned from considering the following when making employment decisions: 

  1. An arrest not leading to a conviction (other than an arrest that is still the subject of a criminal investigation or trial);
  2. Participation in or completion of a diversion or deferral of judgment program;
  3. A conviction that has been expunged or otherwise made inoperative;
  4. A conviction or other determination in the juvenile justice system;
  5. A conviction that is more than 7 years old (measured from date of sentencing);
  6. Criminal offenses other than felonies or misdemeanors, such as infractions; and
  7. A conviction for which the individual was not placed on probation, fined, imprisoned, or paroled.

Point #5 above is the most counter-intuitive. It appears to bar an employer from considering the most severe crimes – those where the sentence is more than seven years – because the date of sentencing will always be more than seven years before the date of the job application.

Information The Employer May Consider

Only convictions and unresolved arrests that directly relate to the job may be considered. The ordinance defines “directly-related conviction” to mean the conduct for which a person was convicted, or that is the subject of an unresolved arrest, 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. In determining whether the conviction or unresolved arrest is directly related to the employment position, the employer must consider whether the employment position offers the opportunity for the same or a similar offense to occur, and whether circumstances leading to the conduct for which the person was convicted or that is the subject of an unresolved arrest will occur in the employment position.  An unresolved arrest is one that is active and pending criminal investigation or trial.

Employers are restricted when considering conviction information during an individualized assessment. They may only consider:

  1. “Directly-related convictions”;
  2. The time elapsed since the conviction or unresolved arrest;
  3. Any evidence of inaccuracy in the background check; and
  4. Any “evidence of rehabilitation or other mitigating factors.”

The ordinance defines “evidence of rehabilitation or other mitigating factors” to mean:

  1. A person’s satisfactory compliance with all terms and conditions of parole and/or probation (however, inability to pay fines, fees, and restitutions due to indigence must not be considered to be noncompliance);
  2. Employer recommendations, especially concerning a person’s post-conviction employment;
  3. Educational attainment or vocational or professional training since the conviction, including training received while incarcerated;
  4. Completion of or active participation in rehabilitative treatment (e.g. alcohol or drug treatment);
  5. Letters of recommendation from community organizations, counselors, case managers, teachers, community leaders, or parole/probation officers who have observed the person since his or her conviction;
  6. Age of the person at the time of the conviction, and
  7. Mitigating factors that are offered voluntarily by the applicant, including explanation of any coercive conditions, intimate physical or emotional abuse, or untreated substance abuse or mental illness that contributed to the conviction.

Required Delay before Hiring

The ordinance requires employers to give notice before taking adverse action based on any conviction history, regardless of whether that conviction history was in a background check or was self-disclosed. The notice must include a copy of any background check report, what action might be taken based on the conviction history, and what the specific items were that could cause the adverse action. (We believe that a normal pre-adverse-action notice under the Fair Credit Reporting Act would usually fulfill this requirement, if the adverse action is to be based on a background check report.) The employer must then wait seven days after giving notice before taking any adverse action. (The ordinance does not appear to define the word “days,” so we believe that this period will be satisfied by the five business days that the Federal Trade Commission’s guidance under the Fair Credit Reporting Act provides.) If the applicant provides any evidence of inaccuracy in the background check report or provides any evidence of rehabilitation or other mitigating factors, the employer must delay any adverse action for a reasonable period of time and reconsider its decision, taking the evidence into account. On making a final decision, the employer must notify the applicant or employee of the decision. (We believe that a normal adverse-action notice under the Fair Credit Reporting Act would usually fulfill this requirement.)

Record-keeping

The ordinance requires employers to keep “records of employment, application forms, and other pertinent data and records” for three years. The ordinance requires employers to give the City access to those records, unless that disclosure would violate state or federal law. Employers must annually verify compliance with the ordinance in a form that the City requires. Failing to maintain “adequate records documenting compliance” or failing to give the City access to the records results in a presumption that the employer did not comply with the ordinance. The employer may overcome that presumption only by showing compliance with clear and convincing evidence.

Enforcement Remedies

The City has the power to levy fines at $50 for a second violation and $100 for each subsequent violation of the ordinance. Additionally, the City may bring a civil action on behalf of the individuals affected within one year of the violation. In such a lawsuit, the court must award liquidated damages of $50 to each person whose rights were violated for each day of violation, reinstatement, back pay, payment of benefits and pay withheld, appropriate injunctive relief, attorney’s fees, court costs, and interest on all the foregoing. The City is prohibited from finding a violation based on an employer’s decision, after an individualized assessment that is limited to criminal history allowed by the law, that the criminal history is directly related to the job.

The San Francisco Fair Chance Ordinance may be viewed here: http://op.bna.com/dlrcases.nsf/id/mcan-9gfmxn/$File/San%20Fran%20Law%20Bckgrnd%20Checks.pdf


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