Seyfarth Synopsis: For California employers, compliance with the Fair Chance Act (FCA) is not a game. In recent years, the California Civil Rights Department (CRD) has stepped up its investigations into complaints of FCA violations, and employers who don’t know the rules risk landing on a chute at every turn. Read on for our guide to navigating compliant background check practices and staying ahead of CRD enforcement.
The stakes are getting higher for California employers, who are seeing an increase in charges filed with the California Civil Rights Department (CRD) alleging violations of the California Fair Chance Act (FCA). This trend follows the CRD’s expanded regulations governing the use of criminal history in employment decisions, which became effective October 1, 2023, and reflects the agency’s heightened focus on FCA compliance in response to complaints filed by applicants and employees. Make no mistake, the CRD is not handing out Get Out of Jail Free cards.
Continue reading for an overview of the rules of the game, including the FCA legal framework, compliance areas the CRD typically examines when FCA charges are filed, and steps employers can take to prepare for and defend against these inquiries.
The Fair Chance Act Rulebook and the 2023 Regulatory Clarifications
The FCA generally requires California employers to:
- Delay inquiry into or consideration of criminal history until after a conditional offer of employment—this includes ordering a criminal history background report;
- Conduct an individualized, job‑related assessment before rejecting an applicant based on criminal history; and
- Follow a two‑step notice process—a preliminary determination notice and a final determination notice—when taking action based on criminal history, regardless of how the information is obtained.
Regulatory amendments approved in 2023 clarified and expanded several key compliance obligations, including:
- Expanding the definition of “applicant” to include certain current employees whose criminal history is reviewed due to changes in ownership, management, policies, or practices.
- Reaffirming that employers may not include language in job advertisements or postings suggesting that individuals with criminal histories will not be considered.
- Prohibiting employers from considering voluntarily disclosed criminal history prior to a conditional offer.
- Clarifying that exemptions for legally mandated background checks apply only when the employer itself is required by law to conduct the check.
- Requiring an initial individualized assessment before issuing a preliminary decision notice.
- Expanding the categories of mitigating and rehabilitative evidence employers must consider, including trauma, disability‑related circumstances, and evidence of rehabilitation.
Time to Show Your Cards: What the CRD Looks for When a Charge Lands
When an applicant or employee files a charge alleging an FCA violation, the CRD’s investigation commonly extends beyond the narrow factual allegation to examine whether the employer complied with related FCA requirements across the board. In those investigations, the CRD typically focuses on the following areas:
1. Timing of Criminal‑History Inquiries
The CRD routinely evaluates whether the employer rolled the dice before their turn and made any inquiry—directly or indirectly—into criminal history before making a conditional offer of employment, including:
- Questions on employment applications
- Interview conversations
- Informal recruiter or hiring‑manager inquiries
- Reliance on information volunteered too early in the application process
1. Individualized Assessments
The FCA does not require an employer to document its assessment. But, like a game of Clue, the CRD expects employers to show their winning strategy, and frequently requests documentation demonstrating that the employer:
- Conducted the required initial individualized assessment before issuing a preliminary decision notice;
- Considered each of the three statutory factors (i.e., the nature and gravity of the offense or conduct, the time that has passed since the offense, conduct, or completion of sentence, and the nature of the job sought or held)s; and
- Connected the assessment to the actual duties and risks of the position.
2. Notice and Response Procedures
The CRD commonly examines whether:
- The preliminary and final determination notices included all required materials, including the conviction‑history report and a statement that the individual has the right to file a complaint with the CRD;
- The applicant or employee was afforded the full response period required by regulation; and
- The employer refrained from making a final decision before the response period expired.
3. Consideration of Mitigating or Rehabilitative Evidence
When an applicant plays a new card—submitting mitigating or rehabilitative evidence—employers must factor it into their next move. Investigators often assess whether the employer:
- Accepted and evaluated all mitigating or rehabilitative information submitted;
- Conducted and documented a meaningful reassessment; and
- Considered trauma‑related, disability‑related, or other mitigating factors where applicable.
4. Consideration of Convictions Older than Seven Years
Although California law permits employers to consider convictions older than seven years—outside the City and County of San Francisco and unincorporated areas of Los Angeles County—doing so can be a risky gambit as the CRD frequently asks whether the employer relied on older convictions.
These inquiries reflect the CRD’s publicly stated position, including guidance posted on its website, prohibiting reliance on older criminal records. Employers should be prepared to articulate and document why consideration of an older conviction was job‑related and consistent with business necessity. The CRD will expect a heightened showing of job-relatedness.
Your Next Move: Getting Ahead of the Charge
The best defense is a good strategy. Employers facing an FCA charge—or seeking to reduce future exposure—should consider the following moves:
1. Check the Board: Audit Criminal‑History Decision‑Making Processes
Review job postings, applications, interview materials, recruiter scripts, conditional offer letters, and pre-adverse (preliminary determination) and adverse action (final determination) templates to ensure compliance with FCA requirements.
2. Play the Right Cards: Strengthen Documentation of Individualized Assessments
Use job‑specific assessment tools that address the three required factors and prompt decision‑makers to consider rehabilitation and mitigation evidence.
3. No Skipped Turns: Ensure Compliance with Notice and Timing Requirements
Confirm that notices include required attachments and language, response deadlines are properly calculated, and reassessments are documented.
4. Teach the Rules: Train Recruiters, HR, and Hiring Managers
Training should focus on prohibited inquiries, handling volunteered information, and the required assessment and notice procedures.
The Endgame
An FCA charge can trigger searching inquiries into how an employer evaluates criminal history and implements required assessment and notice procedures. Don’t wait until the other player sits down at the board. Employers should ensure their practices are well‑documented, consistently applied, and aligned with the current regulatory framework — before the CRD takes a look first.
Workplace Solutions
Don’t roll the dice and hope to avoid scrutiny of your background check practices.If you need help navigating FCA compliance or an FCA CRD charge, the author of this article or your favorite Seyfarth lawyer are here to help employers develop a winning strategy.
Edited By: Catherine Feldman