On September 3, 2024, Los Angeles County’s Fair Chance Ordinance (FCO) took effect, establishing stricter requirements for employers when conducting criminal background checks. This ordinance applies to businesses located or operating in the unincorporated areas of the county and imposes more stringent rules than existing state laws, such as California’s Fair Chance Act. Here’s a breakdown of some key points employers should be aware of, along with steps to ensure compliance.
For additional information regarding Los Angeles County’s Fair Chance Ordinance and to find out how this could impact your business, please contact our Managing Partner, Richard Liu, at richard.liu@consultils.com.
Who Must Comply with the FCO?
The FCO applies to any employer with five or more employees, whether they are located in the unincorporated areas of Los Angeles County or doing business there. This includes temporary agencies, staffing agencies, non-profit organizations and any entity that conducts criminal history checks on behalf of an employer. The ordinance is also applicable to contract and freelance workers whose physical work location is within these unincorporated areas, even if they work remotely from a location within the county.
The ordinance applies to both new job applicants and current employees seeking promotions. Anyone who performs at least two hours of work per week within the county’s unincorporated areas is protected by the FCO.
What Are the Key Requirements?
The FCO introduces new rules that employers must follow throughout the hiring process, particularly in job postings, offer letters, and consideration of criminal history.
Job Posting
Employers need to be aware of significant changes in how job postings are structured. Under the FCO, employers must:
Avoid language that discourages individuals with criminal records from applying.
Include a statement affirming that applicants with arrests or convictions will be considered in accordance with the FCO and the California Fair Chance Act.
Identify any legal restrictions that would prevent the hiring of individuals with specific criminal histories.
List any "material job duties" that could be negatively impacted by an applicant’s criminal history, should such a history be reviewed after a conditional offer is made.
Employers should also ensure that the required notice about the ordinance is posted both in their workplace and on any frequently visited webpages. For unionized workplaces, a copy of this notice must also be provided to the union.
Conditional Offers and Criminal Background Checks
In line with both state law and the FCO, employers cannot inquire about an applicant’s criminal history before extending a conditional job offer. The FCO adds further requirements for employers who intend to conduct a background check after the offer:
Written notification must be provided, stating that the conditional offer is contingent on the results of the background check.
Detailed disclosure: Employers must list all types of background information to be reviewed, such as education, employment history, social media activity, driving records, and more.
After conducting a background check, employers may not discuss the applicant’s criminal history until the report has been received and reviewed. Even then, certain types of criminal history cannot be considered, such as older convictions, cannabis-related offenses, or non-criminal infractions (with limited exceptions).
Individualized Assessments Before Adverse Action
Before taking any adverse action based on criminal history, the FCO requires employers to perform a documented, individualized assessment. This assessment must evaluate:
The nature and severity of the offense.
The time that has passed since the offense occurred.
The relevance of the offense to the job duties in question.
If, after the assessment, the employer intends to take adverse action, they must provide the applicant with:
Written notice of the decision, along with a copy of the background check report.
A minimum of five business days for the applicant to respond with any mitigating information or corrections to the report.
If additional time is requested, employers must wait at least 10 business days for any further information from the applicant.
A second individualized assessment must be conducted and documented before a final decision is made. If the employer chooses to proceed with adverse action, a written final notice must be provided, explaining the decision and informing the applicant of their right to file a complaint.
Recordkeeping and Posting Obligations
To ensure compliance with the FCO, employers must maintain detailed records of all job postings, hiring decisions, and any criminal history information obtained during the hiring process for at least four years. Additionally, the FCO notice must be posted prominently at the workplace and on any company websites or portals that employees or applicants frequently visit.
Penalties for Non-Compliance
Violating the FCO can result in significant financial penalties:
Up to $5,000 for the first violation.
$10,000 for the second violation.
$20,000 for subsequent violations.
These penalties are imposed on a per-violation basis, meaning each affected employee or applicant could result in multiple penalties. Additionally, the county has the authority to suspend or revoke business licenses for severe or repeated violations.
Next Steps for Employers
To avoid potential penalties, employers operating in the unincorporated areas of Los Angeles County should:
Review and update job postings to comply with the FCO’s language requirements.
Revise offer letters to include the necessary background check disclosures.
Train HR personnel on conducting individualized assessments and properly documenting the hiring process.
Post the required notice about the ordinance in visible locations and on relevant web pages.
Retain all records related to hiring and criminal history checks for four years.
For businesses that operate in multiple jurisdictions, keeping track of varying laws and ordinances can be challenging. However, taking these steps will help ensure compliance with the new FCO and reduce the risk of legal issues.
For additional information regarding Los Angeles County’s Fair Chance Ordinance and to find out how this could impact your business, please contact our Managing Partner, Richard Liu, at richard.liu@consultils.com.
Disclaimer: The materials provided on this website are for general informational purposes only and do not, and are not intended to, constitute legal advice. You should not act or refrain from acting based on any information provided here. Please consult with your own legal counsel regarding your specific situation and legal questions.
Richard Liu, Esq. is the Managing Counsel of ILS. He serves clients as a management-side defense lawyer specializing in employment and business litigation. Richard is also an expert on litigation prevention and compliance. He regularly advises Fortune 500 companies and startups on employment, labor, and commercial matters.
Email: richard.liu@consultils.com | Phone: 626-344-8949
*Disclaimer: This article does not constitute legal opinion and does not create any attorney-client relationship.
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