• New Los Angeles County ordinance goes into effect September 3, 2024.
• The ordinance, which has a private right of action, requires significant changes to job postings, conditional offer letters, procedures for adjudicating criminal history, and related notifications for the unincorporated areas of Los Angeles County.
• The ordinance purports to cover relationships beyond traditional employment relationships, such as contract and freelance work.
• The ordinance also prevents employers from rescinding job offers because a background check has not been completed by the vendor in a timely manner unless certain specific conditions are met.

In 2016, the City of Los Angeles enacted a detailed fair chance hiring ordinance. A comprehensive statewide law followed in 2017.¹ Soon, employers with jobs located in the unincorporated areas of the County of Los Angeles² must navigate yet another layer of burdensome regulations based on the County's new fair chance hiring ordinance. The ordinance, which imposes obligations well beyond existing federal and state law, and which extends to contractor and freelance workers, will take effect on September 3, 2024. It adds to the many and considerable headaches employers already have regarding criminal background checks in California.

The summary below is not exhaustive. It does not canvass all of the particulars of the ordinance, including for employers such as banks, which have restrictions on hiring applicants with criminal records. Additionally, in light of recent and significant delays in obtaining criminal background checks in the County, covered employers with jobs located in the unincorporated areas of the County should be aware that the ordinance restricts employers from taking adverse action, such as rescinding a conditional job offer, unless the employer can show "undue burden" on its operations from continuing to hold the job open and it has waited at least 10 business days from initially requesting the background report. Specific notice requirements will also apply in this circumstance.

Coverage

The ordinance protects "Applicants." "Applicant" means an individual who is seeking "employment" with an "employer." Employees seeking promotions are also "applicants." "Employee" means any individual whose job involves performing at least two hours of work on average each week within the unincorporated areas of the County.

The ordinance applies to any "employer" that is located or doing business in the unincorporated areas of Los Angeles County and employs five or more employees regardless of location. "Employer" includes job placement, temporary agencies, referral agencies and other employment agencies as well as non-profit organizations. "Employer" also includes any entity that evaluates an applicant's or employee's criminal history on behalf of an employer, or acts as an agent of an employer, directly or indirectly, in evaluating an applicant's or employee's criminal history.

Importantly, the ordinance defines "employment" broadly, including contract work. "Employment" means any occupation, vocation, job, or work, including but not limited to temporary or seasonal work, part-time work, contracted work, contingent work, work on commission, and work through the services of a temporary or other employment agency, including non-profit organizations, or any form of vocational or educational training with or without pay. Employment also means work or services provided pursuant to a contract for an employer in furtherance of an employer's business enterprise. The physical location of the employment must be within the unincorporated areas of Los Angeles County, including when a person is working remotely, teleworking, or telecommuting from a location within the unincorporated areas of the County.

Mandatory Requirements for Job Postings and Like Materials

The ordinance prohibits any language in job postings that may deter job applicants from applying (e.g., "No felons"). But it is not just prohibitory. All job solicitations, bulletins, postings, announcements, and advertisements must include language stating that qualified applicants with arrest or conviction records will be considered for employment in accordance with the ordinance and state law. Further, employers that condition job offers on a criminal background check must include in all such materials a list of all "material job duties" of the specific job position for which the employer "reasonably believes" criminal history may have a "direct, adverse, and negative relationship," potentially resulting in the withdrawal of the conditional job offer.³

Mandatory Posting Requirements

Employers must post notice of the ordinance at every workplace. Employers also must post the notice on webpages frequently visited by their employees or applicants. Unionized employers must provide copies of the notice to the unions. A form of notice supposedly will be made available by the County of Los Angeles Department of Consumer and Business Affairs (DCBA) before the time the ordinance takes effect.

Unlawful Practices

The ordinance broadly prohibits employers from inquiring into or considering an applicant's criminal history before first extending a conditional job offer. The ordinance also prohibits inquiring into information that already is off-limits based on state law, including Labor Code section 432.7 (which governs records of arrest, including pending charges) and Labor Code section 432.8 (which pertains to certain marijuana-related convictions).

Significantly, even after extending a conditional job offer, employers may not ask candidates directly about their criminal history. Employers may do so, but not until they first receive the criminal background check. This is a crucial sequencing restriction on the events in the screening process.

Importantly, the ordinance also restricts the scope of questions about criminal history to seven years from the date of disposition, with exceptions for certain roles (e.g., roles that require interacting with minors or dependent adults, etc.). Questions about non-criminal infractions are also prohibited, except for driving-related infractions for jobs requiring some driving for work. These limitations exceed the restrictions in the state law.

Considering Criminal History and Taking Adverse Action

The ordinance mandates a notice to applicants before inquiring into their criminal history. Employers must provide the notice when extending the conditional job offer. The notice must indicate the offer is contingent on passing the criminal history review and a specific statement of "good cause" to review such information. It is not enough for the employer to merely state it reviews such information out of generalized "safety concerns." More particularized information is required. If the employer also intends to review information beyond criminal history, such as employment and education history, the notice must provide a complete list.

The ordinance also requires a documented, written individualized assessment of an applicant's criminal history before employers take any adverse action against an individual, such as rescinding a conditional job offer. The assessment must consider whether the applicant's criminal history has a "direct adverse and negative bearing" on their ability to perform the duties or responsibilities necessarily related to the applied-for position, such that it "justifies" denying employment. The employer's assessment must consider the factors outlined in the state law, such as the amount of time that has passed since the criminal conduct or completion of sentence.⁴

The ordinance requires a form of "pre-adverse" action notice before an employer takes adverse action against the individual based, in whole or in part, on their criminal history. The contents of the notice are mandatory and include informing the applicant of the right to submit evidence of rehabilitation.⁵ Importantly, a copy of the documented, written individualized assessment must be enclosed with the notice. The notice must be sent by both mail and e-mail if the employer has the individual's e-mail address.

The employer may not take adverse action or fill the employment position for at least five business days after the candidate has received this notification. If the candidate provides the employer with certain information within this five-business-day period, such as that they are disputing the criminal history in the criminal background report, the employer must defer any final decision for at least 10 additional business days. Applicants must have the opportunity to arrange to meet with the employer to present this information verbally if they request such a meeting.

Employers must consider any additional information timely submitted by an applicant before making a final decision. This further assessment also must be documented in writing.

If an employer decides to take adverse action, a form of "adverse action" notice is required. The contents of the notice are mandatory, including enclosing a copy of the second individualized assessment and notifying the individual of the right to submit a complaint to DCBA for violations of the ordinance, and with the state's Civil Rights Department for violations of the state law. It must be sent by both mail and e-mail if the employer has the individual's e-mail address. Notices sent more than 30 days after an individual's response to the initial notice are deemed untimely and violate the ordinance. However, the employer can rebut this presumption with evidence justifying why it could not make the decision within 30 days.

Record Retention

The ordinance requires employers to retain pertinent records for a minimum of four years.

Enforcement and Exhaustion

The ordinance authorizes public and private remedies, including civil claims. An aggrieved individual may not file a private lawsuit against an employer unless and until they first meet certain exhaustion requirements.

Recommendations

Employers with operations in, or that do business or have contracts with, the County, at a minimum, should evaluate necessary changes in when and how they inquire into criminal history during the hiring process. They should also consider whether to undertake a broader (and privileged) assessment to strengthen their compliance with federal, state, and local employment laws that regulate use of a candidate's criminal history. Suggested action items for employers with employees in the County and other jurisdictions having ban-the-box laws are as follows:

• Review and update job applications and related forms for impermissible inquiries regarding criminal records;
• Review and update workplace postings to help ensure all required postings are included;
• Review and update company webpages for necessary additions about fair chance hiring;
• Provide training to recruiters and other personnel involved in posting job openings;
• Provide training to personnel who conduct job interviews and make or influence hiring and staffing decisions to explain permissible inquiries into, and uses of, criminal history;
• Provide training to personnel involved in ordering and adjudicating background reports;
• Review written and electronic communications about the hiring process, including conditional job offer templates and pre-adverse action and adverse action notices;
• Plan for the requirement to prepare additional documentation for the individualized assessment and record retention;
• Plan for delays in filling staffing openings due to delays in receiving background reports; and
• Review the hiring and screening process to help ensure compliance, including the timing of background checks, the distribution of mandatory notices, and the application of mandatory deferral periods.

Posted: March 26, 2024

¹ See also Rod Fliegel and Alice H. Wang, Changes in California's Regulations Regarding Criminal Records Approved, Littler ASAP (Aug. 1, 2023).

² The unincorporated areas of the County include East Los Angeles (with an estimated population exceeding 100,000), Florence-Graham, Belvedere Gardens, City of Terrace, Hacienda Heights, South Whittier, Westmont, Willowbrook, and many more.

³ There are also specific requirements for employers, such as banks, which are required by law to screen applicants for certain disqualifying criminal records.

⁴ The ordinance sets up a rebuttable presumption that an applicant's criminal history will not meet this standard if they have obtained a license, certificate, authorization, or any other similar credential from a licensing, regulatory, or other government agency or board required for the applied-for job position.

⁵ Calculating the date for the individual to respond to the initial notice will depend on how the initial notice was delivered and where it was sent from (e.g., notice sent by e-mail will be deemed received two business days after the notice was sent).