Widely known as “Ban the Box” laws, California is among the many jurisdictions that have adopted laws limiting the use of criminal background checks in evaluating job candidates. Enacted in 2018, California’s Fair Chance Act generally prohibits employers, with five or more employees, from asking a job candidate about their conviction history before making a conditional job offer. Among other requirements, the Fair Chance Act also places an affirmative duty on employers to provide requisite notices to candidates and to evaluate several factors before withdrawing a job offer due to a candidate’s criminal history. Employers must also provide candidates with the opportunity to explain or provide mitigating information before making a final decision to rescind a job offer. In October 2023, California amended the Fair Chance Act to bolster these notice and evaluation requirements. The 2023 amendment also increased potential employer liability for failure to properly notify and evaluate a job candidate’s criminal history. Proposed legislation in California aims to place stringent requirements on when employers can request a criminal background check in the first instance and how the information obtained must be evaluated. 

Initially introduced in February 2024, SB 1345 would amend the California Fair Employment and Housing Act to make it an unlawful employment practice for an employer to require, as a condition of employment, that an applicant waive the applicant’s right to privacy in criminal history information or otherwise provide an authorization for the employer to obtain an applicant’s criminal history unless an employer can demonstrate a “business necessity.” Further, this bill would also make it an unlawful employment practice for an employer to take an adverse action against an applicant based on the applicant’s criminal history unless the employer can demonstrate the applicant’s criminal history has a direct and adverse relationship with specific job duties and the employer’s business necessity requires an adverse action. “Business necessity” may fall within two categories. The first category includes situations where an employer must comply with federal law, federal regulation, or state law as to exclusions based on specific criminal conduct or categories of offenses. The second category addresses instances where an employer seeks to protect against incidents of workplace harassment, workplace violation, or theft of business property. However, an employer must have “clear and convincing” evidence that criminal history information is “necessary” to provide protection where there is “no reasonable alternative.” Unless a criminal background check is required by state or federal law, this strongly worded definition of “business necessity” would generally ban the use of criminal background checks in most cases. It would also place a high burden on employers to demonstrate such a “business necessity.”

Notably, SB 1345 would not alter California’s Fair Chance Act’s notice requirements. Rather, it seeks to substantially narrow an employer’s ability to request and make adverse actions based on a criminal background check. Currently, employers may still require job candidates to submit to a criminal background check but should review their internal policies and practices to ensure compliance with California’s Fair Chance Act, especially considering the recent October 2023 amendments. As similar “Ban the Box” laws have become commonplace, many employers have begun relying on third-party vendors to provide requisite notice materials. However, employers should still implement internal processes and practices to ensure compliance and proper documentation. After all, potential liability for failing to comply with California’s strict notice and evaluation requirements will fall ultimately on an employer. Moreover, the California Civil Rights Department, the agency tasked with enforcing the Fair Chance Act, has made it a priority to investigate potential violations concerning criminal background checks.