California Bans the Box and Limits Compensation Inquiry

Posted: December 07, 2017

Several new laws and regulations will become effective in California on January 1, 2018. Two laws, in particular, are noteworthy given their impact on employer hiring practices. The following information is provided for general educational purposes only and should not be considered legal advice. Consultation with qualified legal counsel is recommended in all matters of employment law. Ban the Box. Ban the Box” laws exist in over 29 States and 150 municipalities. And, as many readers know, the requirements and limitations of these laws vary by location. California will soon join the fray with its version of ”Ban the Box,”  effective January 1, 2018. A.B. 1008, California’s version of ”Ban the Box”, was signed on October 14, 2017 by Governor Jerry Brown. The law:
  • Applies to all public and private employers with five or more employees.
NOTE: Employers frequently ask for clarification regarding specific conditions creating applicability of a law. In the case of A.B.1008, a common question may be whether the employer and/or the five employees must be within California. The law does not provide that level of detail and instead states only: “… it is an unlawful employment practice for an employer with five or more employees to do any of the following:” The law then addresses prohibited practices. Courts may eventually address specifics of applicability. Until that time, a cautious approach for employers would be to apply the ban the box law for any employee in California, regardless of where the employer and other employees are located.
  • Prohibits inquiry into a candidate’s criminal history or conducting/procuring a criminal background check until after a conditional offer of employment has been made.
  • Requires an employer, if considering an adverse employment decision based on criminal history, to:
    •  Conduct an individualized assessment regarding the relationship between the criminal history and job duties by considering: 1) the nature and gravity of the offense, 2) the time that has elapsed since the offense and completion of sentence, and 3) the nature of the job sought.
    • Provide written notification to the candidate and include: 1) notice of the potentially disqualifying conviction/s, 2) a copy of the conviction history, 3) an explanation of the candidate’s right to respond before a final decision is made, 4) an explanation that the response may include evidence challenging the accuracy of the criminal information, and 5) the deadline for responding, which must be at least five business days after the notice. (If the candidate informs the employer s/he is obtaining evidence to support his/her position, the candidate must have an additional five days to respond.)
  • Requires the employer, if making a final decision not to employ, to:
    • Inform the candidate in writing of the final denial or disqualification.
    • Explain the existing procedure, if any, the employer has for the candidate to challenge the decision or request reconsideration.
    • Inform the candidate of his/her right to file a complaint with the California Department of Fair Employment and Housing (DFEH).
The law makes exceptions for certain categories of employment including: 1) positions for which a state or local agency is required to conduct a criminal background check, 2) criminal justice agencies, 3) farm labor contractors, and 4) employers required by federal, state, or local law to conduct background checks or restrict employment based on criminal history. It is important to note that the California Statewide ”Ban the Box” law does not supersede municipal ”Ban the Box” laws or affect any other rights a candidate may have under any other local ordinance. Employers must continue to comply with the requirements these types of laws in San Francisco and Los Angeles, each of which has its own unique requirements. Los Angeles, for example, requires employers complete a special form, Fair Chance Initiative for Hiring Ordinance (FCIHO), Individualized Assessment and Reassessment Form,” as part of the individualized assessment process.   Compensation Inquiry Limitation. A newer trend is limiting an employer’s legal right to inquire about current and prior compensation of an employment candidate. California joins a small group of states (Delaware, Massachusetts, and Oregon) and municipalities (New York City, Philadelphia, and San Francisco) in limiting compensation inquiries. A.B. 168 restricts an employer’s use of salary information, including compensation and benefits. Specifically, the law provides, “An employer shall not rely on the salary history information of an applicant for employment as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant.” The law:
  • Applies to all public and private employers.
  • Prohibits employers from asking candidates for employment about their pay history.
  • Allows employers to consider salary information if provided voluntarily by the candidate and without prompting.
  • Requires employers provide the pay scale for the position if requested by the candidate
  Employer Takeaways Before the January 1, 2018 deadline in California:
  1. Remove questions about criminal and compensation history from employment applications and other candidate data collection tools.
  2. Document the process to be used when considering an adverse employment decision or finalizing an adverse employment decision based on a candidate’s criminal history. Ensure the process complies with the requirements of California State and municipal ban the box laws.
  3. Educate team members on changes in law(s) and new processes.
  4. Keep in mind that compliance with the Federal FCRA, State FCRA Analogues, and other applicable laws is still required.
To read more about changes in compensation inquiry regulations across the U.S., read Compensation Inquiry Limitations Gain Traction.