New California Regulations Will Limit Use of Criminal History Information in Hiring and Retention Decisions

New regulations from the California Fair Employment and Housing Council (FEHC) will limit an employer’s ability to use criminal history in making hiring and retention decisions. The regulations go into effect July 2, 2017. What’s behind them and what should employers do?


Federal agencies have taken an increasingly critical view of the use of criminal history in hiring decisions over the past few years. Although convicted felons are not a protected class under the Civil Rights Act of 1964, the U.S. Equal Employment Opportunity Commission (EEOC) and Department of Labor (DOL) issued guidance suggesting that consideration of criminal history in hiring and retention may constitute unlawful discrimination.

FEHC’s new regulations expressly adopt that view.

A Matter of Disparate Impact

Based on existing state law prohibiting employment practices that have an adverse or disparate impact on the basis of race, religion, color, sex, and other enumerated classes, the new regulations effectively create a “rebuttable presumption” that use of criminal history will disparately impact on the basis of race. The burden then shifts to the employer to show that there is no disparate impact based upon the:

  • Applicant pool;
  • Convictions being considered; or,
  • Particular job at issue.

If the policy or practice is deemed to have a disparate impact on a protected class of applicants or employees, the employer must demonstrate a business necessity, in addition to job-relatedness, for requesting a criminal history from a prospective employee.

Defining Business Necessity and Job Relatedness

The California Code of Regulations defines “job-related” as “sufficiently related to an essential function of the job in question to warrant its use.” It defines “business necessity” as “an overriding legitimate business purpose such that the practice is necessary to the safe and efficient operation of the business and the challenged practice effectively fulfills the business purpose it is supposed to serve.”

  • In establishing job-relatedness and business necessity, that employment practices must take into account the:
  • Nature and gravity of the offense;
  • Amount of time that has passed since the offense and/or completion of the sentence; and,
  • Nature of the job held or sought anytime a prospective employee with a prior criminal history is being evaluated.

There must be some demonstrable relationship between the criminal history qualification being used and the person’s ability to do the job, such as federal or state laws that prohibit employing persons with certain criminal records in the position. Alternatively, the employer must perform an individualized assessment of the applicants to be excluded based upon prior convictions, and provide the applicant an opportunity to explain why the qualification should not be applied to them.

Even if an employer can demonstrate job-relatedness and that the use of criminal history information is consistent with business necessity, an applicant or employee may still bring a discrimination claim for violation of these new regulations if he or she can show that there is a less discriminatory alternative available to advance the employer’s legitimate business objectives.

The Takeaways

The regulation will exempt employers that are required to comply with federal or state laws or other regulations which mandate a criminal history screening process or require an employee or applicant to possess or obtain a required occupational license. Those employers can rely on the applicable laws as a defense to an adverse impact claim.

In an effort to comply with the new regulation, all other employers should begin by following a few simple suggestions:

  • First, blanket polices against hiring applicants with criminal convictions without any real justification for such a policy will not stand under the new law. For any such policy to be upheld, it must have a real and tangible relationship to successful performance on the job and in the workplace and measure the person’s fitness for the specific job.
  • Second, employers may want to consider adopting the following practices:
    • Reconsider whether criminal background checks are beneficial to your business.
    • Craft a narrowly tailored policy that demonstrates how the policy is job-related, consistent with business necessity, and includes an individualized assessment of employees and applicants.
    • Conduct training for hiring managers and human resources personnel regarding the collection and usage of employees’ and job applicants’ criminal conviction histories.
    • Consult with an attorney to ensure that applications, policies, and practices are consistent with state and federal law.

Regardless of the new regulations, employers can still never inquire about:

  • An arrest or detention that did not result in conviction.
  • Referral to, or participation in, a pretrial or post-trial diversion program.
  • A conviction that has been judicially dismissed or ordered sealed, expunged, or statutorily eradicated pursuant to law.
  • A non-felony conviction for possession of marijuana that is two or more years old.

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