Strict Limitations Placed on San Francisco Employers Regarding Background Checks

A new ordinance, titled the Fair Chance Ordinance, will take effect on August 13, 2014 in the city of San Francisco, CA.  This Ordinance will provide strict limitations for any employer doing business in San Francisco when it comes to the use of an applicant’s criminal history.

As a result of this ordinance, employers are now barred from asking about criminal convictions or even conducting a background check until the employer determines if the applicant meets the minimum qualifications for the position that is in whole or in part within San Francisco.  After the first live interview, the criminal background check can be run, or after a conditional offer of employment.  These strict limitations take away the ability of an employer to ask direct questions that might influence their hiring decision before an applicant has been chosen to begin or move through the hiring process.

Much like employers are required to provide an applicant a copy of their rights under the FCRA, employers in San Francisco will now have to provide an applicant a notice of their rights under this Ordinance.  This will outline the strict limitations that are in place via the Ordinance, and give the applicant the information needed to know if they have been treated fairly with regards to the information obtained on a criminal background check.

In following the EEOC’s guidance issued in 2012 regarding the use of criminal background information, the Fair Chance Ordinance requires that employers in San Francisco make an individualized assessment of the information obtained.  Only convictions directly related to the position in question may be considered as useable in an adverse action decision.  They must also look at other mitigating factors, such as the elapsed time of the conviction, evidence of inaccuracy or evidence of the applicant’s rehabilitation since the conviction.

While the penalty for employers violating this Ordinance is not a drastic one, it is one that can compound and if violated, companies must also be aware of other action that could be taken by the applicant and the EEOC.  A first violation earns a warning; a second violation results in a $50 administrative penalty and any subsequent violations may increase to $100.  There can also be civil enforcement action against the company which can include back pay, benefit payment and several other penalties which can build against an employer.

Any employer that is hiring in San Francisco for a position that is either whole or in part within the city limits should consider reviewing its hiring policies and familiarize itself with the Ordinance and the new strict limitations.  For more information on the Fair Chance Ordinance, please click here.

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