California Governor Signs Bills Banning Criminal History and Salary History Questions on Employment Applications

10.18.2017

Days before the end of the 2017 California legislative session, Governor Jerry Brown signed two bills into law, which ban asking about criminal convictions and salary history on employment applications starting on January 1, 2018. Each of the bills is discussed below in more detail.

Ban the Box Expanded
AB 1008 extends California’s ban-the-box law to private employers in California and restricts the ability of employers to disqualify applicants with criminal histories. The Legislature passed AB 1008 in response to statistics showing that roughly seven million Californians—or nearly one in three adults—have an arrest or conviction record that can undermine their efforts to obtain employment. The Legislature intended AB 1008 to reduce barriers to employment for people with conviction histories and decrease unemployment in communities with higher criminal conviction rates.

AB 1008 makes it an "unlawful practice" under California’s Fair Employment and Housing Act ("FEHA") for an employer to seek the disclosure of an applicant’s criminal history at any time before a conditional offer of employment is made. Once the employer makes a conditional offer to an applicant, the employer may ask about criminal history, or obtain the applicant’s authorization to conduct a criminal background check.

If the employer desires to rescind the conditional offer to the applicant based on the criminal history, the employer must first conduct an individualized assessment of whether the applicant’s criminal history has a "direct" and "adverse relationship" with the specific duties of the job, considering the nature and gravity of the offense or conduct, the time that has passed since the offense or conduct and completion of the sentence, and the nature of the job held or sought. AB 1008 suggests an employer may commit the results of the assessment in writing, but is not required to do so.

The employer must then provide written notice to the applicant of its preliminary decision to deny employment based on criminal history.

The written notice must:

• Indicate the disqualifying conviction(s),
• Include a copy of the conviction report, if one exists, and
• Inform the applicant of the right to respond to the employer’s notice, and the deadline by which to respond (at least five days).

The employer may, but is not required to, explain the reasons for making the preliminary decision to disqualify the applicant in the written notice.

In response, the employee may submit evidence challenging the accuracy of the conviction history report, evidence of rehabilitation, or other mitigating circumstances. If, within five business days, the applicant notifies the employer in writing that he or she disputes the accuracy of the criminal history report and takes specific steps to obtain evidence supporting that assertion, the employer must give the applicant an additional five business days to respond to the written notice of the preliminary decision.

The employer must then consider any additional evidence submitted by the employee. If the employer stands by its decision to deny employment, it must provide a second written notice to the employee. This notice must inform the applicant of:

• The employer’s final decision,
• Any existing procedure the employer has to challenge the decision or request reconsideration, and
• The employee’s right to file a complaint with the Department of Fair Employment and Housing ("DFEH").

AB 1008 does not apply in the any of the following circumstances:

• To a position for which a state or local agency is otherwise required by law to conduct a conviction history background check.
• To a position with a criminal justice agency, as defined in Section 13101 of the Penal Code.
• To a position as a Farm Labor Contractor, as described in Section 1685 of the Labor Code.
• To a position where an employer or agent thereof is required by any state, federal, or local law to conduct criminal background checks for employment purposes or to restrict employment based on criminal history, such as the federal Securities Exchange Act of 1934.

AB 1008 also does not apply to employers with fewer than five employees.

AB 1008 adopts the meaning of "conviction" from Section 432.7 of the Labor Code, and adds that "conviction history" includes "an arrest not resulting in conviction only in the specific, limited circumstances described in subdivision (f) of Section 432.7 of the Labor Code, when an employer at a health facility, as defined in Section 1250 of the Health and Safety Code, may ask an applicant for certain positions about specified types of arrests," and "an arrest for which an individual is out on bail or his or her own recognizance pending trial."

Ban on Salary History Questions
In an effort to close the wage gap for women and minorities, Governor Brown also signed AB 168. The new law goes into effect on January 1, 2018 and prohibits employers from seeking salary history information from applicants. Employers are also prohibited from relying on an applicant’s salary history when making hiring or compensation decisions. Upon reasonable request, employers must provide the pay scale for a position to an applicant for employment.

What Should Employers Do Next?
Employers should review their employment applications to exclude requests for criminal or salary history information. Employers may also need to modify their hiring procedures to ensure compliance with the new procedural requirements mandated by the FEHA, in addition to any state and federal background check laws and local ban-the-box ordinances that apply. Employers should also train managers to ensure they do not seek or consider information banned by these statutes.

If your organization needs assistance in navigating through this increasingly complicated area of the law, please contact one of the authors or attorneys in the Private Labor and Employment Group.