California Fair Employment and Housing Council Regulation

April 22nd, 2017 | Sterling

The California Fair Employment and Housing Council (FEHC), a state agency that regulates California’s employment and housing anti-discrimination laws, has published a regulation that addresses the use of criminal history in the hiring process. The new rules, known as the California Fair Employment and Housing regulation on Criminal History in Employment Decisions (the “Act”), are scheduled to go into effect on July 1, 2017. The new regulation, similar to the EEOC guidance on the Consideration of Arrest and Conviction Records in Employment Decisions, states that consideration of a criminal record may have an adverse impact on individuals based on race, gender or national origin. Adverse impact is defined as having the same meaning as disparate impact in the EEOC guidance, when a policy that is neutral on its face has the effect of disproportionately screening out an applicant in a protected class. The regulation addresses both disparate impact and disparate treatment in the use of criminal records for hiring.

Consideration of Criminal History

Under the new regulation, employers are prohibited from using criminal history in employment decisions if doing so would have an adverse impact on individuals, and the employer cannot prove it is job-related and consistent with business necessity, or if the employee or applicant has demonstrated a less discriminatory alternative means of achieving the specific business necessity.

The regulation allows the applicant or employee to prove adverse impact by using conviction statistics or any other evidence. If the applicant is able to show an adverse impact, the employer is then required to show that the policy is job related and consistent with business necessity, and the policy must be related to the successful performance of the position.

Proving Job-Relatedness

In order to establish that the policy is job-related and a consistent business necessity, the employer must evaluate at least the following three factors:

  • The nature and gravity of the offense or conduct
  • The time that has passed since the offense or conduct and/or completion of the sentence
  • The nature of the job held or sought

Prior to denying employment, an employer must show that the criminal history is relevant to the denial of a position by either:

  • Demonstrating that a bright line policy of considering criminal history information can properly distinguish between applicants and employees who are an unacceptable risk or not. The convictions must have a direct and negative impact on the specific duties of the position. The regulations state that a bright line policy of disqualifying all applicants with a criminal conviction over 7 years old will be assumed to be not sufficiently tailored to meet the “job relatedness” “consistent with business necessity” requirements.
  • Conducting an individualized assessment of the circumstances and qualifications of the applicant. The assessment must give applicants a reasonable opportunity to show that they should not be denied due to their circumstances. The employer must then evaluate this additional information.

If an employer is able to show that the policy is job related and consistent with business necessity, applicants or employees may still be able to succeed if they are able to show that the employer could have used less discriminatory alternatives that would accomplish the employer’s objectives.

Prohibitions Irrespective of Adverse Impact

The regulation also expands the items that are expressly prohibited by law from consideration. Employers will be prohibited from considering any non-felony conviction for possession of marijuana that is older than two years.

The other prohibited items include:

  1. An arrest or detention that did not result in conviction (Labor Code section 432.7);
  2. Referral to or participation in a pretrial or post-trial diversion program (Id.);
  3. A conviction that has been judicially dismissed or ordered sealed, expunged or statutorily eradicated pursuant to law (e.g., juvenile offense records sealed pursuant to Welfare and Institutions Code section 389 and Penal Code sections 851.7 or 1203.45) (Id.); AND

Notice of Adverse Action

Under the new regulation, if the employer chooses to take adverse action, they must give the applicant or employee “notice of the disqualifying conviction and a reasonable opportunity to present evidence that the information is factually inaccurate.” This requirement differs from the Fair Credit Reporting Act, and employers should review their adverse action procedures with counsel to ensure compliance.

Positions that are required by law to exclude individuals with certain convictions such as peace officers, health care or pharmacies, as well as for licensing, will be allowed to utilize criminal information without the analysis.

Disparate Treatment

The act prohibits employers from treating applicants or employees differently when considering criminal conviction history if the disparate treatment is based on race, gender or national origin.

The full text of the regulation can be found here:

Clients are encouraged to consult with their legal counsel on the impact of this new law, and review their screening policies for jobs and applicants in California. Sterling is not a law firm, and none of the information contained in this notice is intended as legal advice.

Sterling is not a law firm. This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.