The California Fair Employment & Housing Council’s New Regulations Restrict Employers’ Use of Criminal History in Employment Decisions

By Michael Klazema on 4/19/2017

The California Fair Employment and Housing Council (FEHC) released their finalized new regulations regarding consideration of criminal history in employment decisions. The new regulation will go into effect by July 1, 2017.

Section § 11017.1(a) restates California state law that prohibits employers from using certain criminal history information for “hiring, promotions, training, discipline, lay-off, termination, and other employment decisions.”  Section (b) of 11017.1 lists the following types of criminal history that employers are prohibited from using in employment decisions:

  1. An arrest or detention that did not result in conviction;
  2. Referral to or participation in a pre-trial or post-trial diversion program(Labor Code section 432.7);
  3. A conviction that has been judicially dismissed or ordered sealed, expunged, or statutorily eradicated pursuant to the law (e.g., juvenile offense records sealed pursuant to Welfare and Institutions Code section 389 and Penal Code section 851.7 or 1203.45) (Id.);
  4. An arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while a person was subject to the process and jurisdiction of juvenile court law; and
  5. non-felony conviction for possession of marijuana that is two or more years old (Labor Code Section 432.8).

The regulation continues by incorporating Equal Employment of Opportunity Commission (“EEOC”) guidelines that prohibit employers from using the applicant’s criminal history information in employment decisions if it causes an “adverse impact” towards the individual based on their gender, race, and national origin. “Adverse impact,” which is defined by reference to the EEOC’s “disparate impact” guidelines, means employment decisions resulting from policies that appear neutral but have the “effect of disproportionately screening out a Title VII-protected group.” Although the regulation states that the applicant or employee bears the burden of proving an adverse impact, it can be established through the use of conviction statistics or offering other evidence. 
If the applicant or employee proves that the policy or practice of considering criminal convictions creates an adverse impact, the employer must establish that the policy isjustifiable because it is job-related and consistent with business necessity. In order to prove job-relatedness and business necessity, the regulation establishes the type of evidence an employer must produce
The employer must demonstrate that, when making employment decisions, it takes into account the following factors:

  1. The nature and gravity of the offense or conduct;
  2. The time that has passed since the offense or conduct and/or completion of the sentence; and
  3. The nature of the job held or sought.

To show that the policy is narrowly tailored to the job for which it applies, the employer may do one of the two things:

  1. The employer must show that if it uses any “bright-line” conviction disqualification or consideration in its policy, that that policy can properly distinguish between applicants or employees who do and do not pose an unacceptable level of risk and that the convictions being used to disqualify have a direct and specificnegative bearing on the person’s ability to perform duties related to the employment position. Bright-line considerations are defined as ANY policy that does not include an individualized assessment. Bright-line conviction disqualification or practices that include conviction related-information that is seven or more years old are subject to a rebuttable presumption that the policy was not sufficiently tailored to meet the job-related and consistent with business necessity affirmative defense; or 
  2. The employer must conduct an individualized assessment of the circumstances and qualifications of the applicants or employees, including a notice (before any adverse action is taken) that the individual was screened out because of a criminal conviction. The individual must have reasonable opportunity to demonstrate that the exclusion should not be applied due to their particular circumstances. Based on the information provided by the individual, the employer must determine whether there is an exception to the exclusion.

Whether the employer uses “bright-line” policy or conducts individualized assessments before taking an adverse action against the individual, the employer must give the affected individual a notice of the disqualifying conviction and a reasonable opportunity to present evidence that the information was inaccurate. If the applicant establishes that the record was factually incorrect, then the record cannot be used in the employment decision.

Furthermore, in section (g) Less Discriminatory Alternatives, the regulation provides that even if the employer proves that its policy was job-related and consistent with business necessity, the adversely affected individual can still prove a violation by demonstrating that there was a less discriminatory policy that serves the employer’s goals, such as a more narrowly targeted list of convictions or another form of inquiry that evaluates job qualifications or risk as accurately without significantly increasing the cost or burden on the employer.

What This Means to You:

  • The law applies to all employers of California residents with more than five employees who use criminal history in making employment decisions.
  • Before making an adverse employment decision (hiring, firing, placement) on the basis of criminal history, the law requires employers to consider the a) The nature and gravity of the offense or conduct; b) The time that has passed since the offense or conduct and/or completion of the sentence; and c) The nature of the job held or sought.
  • The law requires employers to develop policies for use of criminal history in its hiring decisions that either (a) provides for conducting an individualized assessment of each applicant on whom it considers taking an adverse employment action or (b) that properly distinguish between applicants or employees who do and do not pose an unacceptable level of risk and that the convictions being used to disqualify have a direct and specific negative bearing on the person’s ability to perform duties related to the employment position.
  • The employer must give an affected individual a notice of the disqualifying conviction and a reasonable opportunity to present evidence that the information was inaccurate. If the applicant establishes that the record was factually incorrect, then the record cannot be used in the employment decision.

We recommend that you seek advice of an employment lawyer who can review your policies related to using criminal history to make employment decisions.

The proposed FEHC final text is accessible here for review:
Final_Text_of_Consideration_Criminal_History_Employment_Decisions.pdf website

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