The California Office of Administrative Law approved the California Civil Rights Council’s proposed amendment to the California Fair Chance Act, effective October 1, 2023. In addition to providing employers with further guidance on how to handle job applicants with a criminal history, the amendment also expands which employers and job applicants fall under the scope of the FCA.

Originally enacted in 2018, the FCA aims to remove unnecessary difficulties for individuals with criminal backgrounds to find employment. Specifically, the FCA prohibits an employer with five or more employees from asking job candidates about any criminal history before making a conditional offer of employment. The FCA also details when an employer may revoke a conditional offer of employment based on the applicant’s criminal history. An employer may revoke a conditional offer only if the applicant’s conviction history has a “direct and adverse relationship with the specific duties of the job that justify denying the applicant position.” Whether an issue exists is determined by conducting an individual assessment, where the employer considers (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.”

One of the main functions of the amendment is to provide further guidance to employers on how to conduct individual assessments when determining if an applicant’s criminal history is grounds to revoke a conditional job offer. Specifically, it provides clarification as to what facts should be considered when analyzing each element of an individual assessment. Among other factors, an employer should consider the applicant’s personal conduct that led to the conviction, the type and degree of harm caused by the applicant, the amount of time that has passed since the underlying conduct and conviction, and whether the context in which the conviction occurred is likely to arise in the workplace.

The amendment also provides guidance on the type of evidence an applicant may include in response to a preliminary decision to rescind the offer based on criminal history, including evidence that the conviction history report is inaccurate and evidence of rehabilitation or mitigation. The amendment also includes suggested information and documentary evidence that can be submitted for consideration, including the applicant’s participation in any self-improvement efforts, the age of the applicant when the conduct occurred, whether similar conduct is likely to recur, or any documentation demonstrating rehabilitation or other mitigating circumstances.

In addition to providing the above guidance, the amendment also expands the scope of the FCA by revising key definitions in the law, most notably the definitions for “applicant” and “employer.” Under the new amendment, an applicant now includes existing employees who apply for a different position with their current employer as well as existing employees who are subject to “a review and consideration of criminal history because of a change in ownership, management, policy, or practice.” Similarly, “employer” now includes “labor contractor and a client employer,” direct and joint employers, agents of an employer, particularly those that evaluate the applicant’s conviction history on behalf of the employer, and staffing agencies.

In light of the amendment, any employer falling under the expanded scope of the FCA should review their policies and procedures, particularly those with respect to conducting an individual assessment, to ensure all are compliant with the FCA. The clarifications provided by the Civil Rights Council through the amendment should help with any revisions. In updating any policies, employers should be sure to consider any local laws that may also apply, such as the Los Angeles Fair Chance Initiative for Hiring Ordinance.

Companies that perform background checks for California employers in particular would do well to perform a comprehensive review of their polices to ensure compliance with California law, not only in light of the amendment to the FCA, but also considering the California Supreme Court’s recent decision in Raines v. U.S. Healthworks Medical Group clarifying that the definition of “employer” under the California Fair Employment and Housing Act includes, in addition to direct employers, any business entity acting as an agent of a California employer.

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