A background screening report can help an employer evaluate a candidate, but ordering it too early or rejecting an applicant without the required notices can create legal exposure. California businesses must separate permission to obtain a report from permission to use particular information. This guide explains the main disclosure rules, the Fair Chance hiring process, and practical steps for building a compliant screening procedure.
Background check laws California employers should know
Employment screening can involve several overlapping laws. Using a screening company does not transfer the employer’s responsibilities to that vendor.
- ICRAA: California’s Investigative Consumer Reporting Agencies Act, Civil Code section 1786 et seq., regulates qualifying reports about a person’s character, general reputation, personal characteristics, or mode of living. It can apply to employment background reports even without personal interviews.
- FCRA: The federal Fair Credit Reporting Act governs consumer reports obtained through consumer reporting agencies, including employment reports. Its disclosure, authorization, and adverse-action requirements can apply alongside California law.
- Fair Chance Act: Government Code section 12952 generally restricts criminal-history inquiries and hiring decisions by employers with five or more employees, subject to statutory exceptions.
- Other restrictions: Labor Code section 432.7 limits inquiries into and use of certain criminal-history information. Labor Code section 1024.5 restricts employment credit reports to specified positions.
Coverage depends on the employer, position, report, and location. Itkin Law’s regulatory compliance counsel can help businesses identify which requirements apply before screening begins.
Provide disclosures and obtain written authorization
Before procuring a qualifying investigative consumer report for employment purposes, follow ICRAA’s disclosure and authorization requirements under Civil Code section 1786.16. The disclosure must be clear, conspicuous, and in a document consisting solely of the required disclosure.
Required information includes the report’s purpose, the screening agency’s identifying and contact information, the nature and scope of the investigation, and information about the applicant’s rights. Obtain written authorization before procuring the report.
ICRAA also requires a checkbox through which the applicant can request a copy. If requested, the copy must generally be supplied within three business days after the report is provided to the employer.
Separately, before procuring an employment consumer report, the FCRA requires a clear and conspicuous written disclosure, in a document consisting solely of the disclosure, that a consumer report may be obtained for employment purposes, plus the applicant’s written authorization. See 15 U.S.C. section 1681b(b)(2). The authorization may appear on the stand-alone disclosure document. Do not assume a combined vendor form satisfies both laws. Liability waivers, unrelated acknowledgments, and extra contractual language can create disclosure problems.
Wait for a conditional offer before criminal screening
For covered employers, California’s Fair Chance Act generally prohibits asking about conviction history, including on an application, before making a conditional offer. It also generally prohibits considering or distributing conviction-history information before that offer. A candidate’s authorization does not remove this timing restriction.
After the conditional offer, the employer may conduct permitted criminal-history screening. However, receiving information does not necessarily make it lawful to consider. Restrictions apply to arrests that did not result in conviction, diversion participation, and specified sealed, dismissed, or expunged records, subject to statutory exceptions.
If a conviction might justify withdrawing the offer, the employer must make an individualized assessment. The assessment considers:
- The nature and gravity of the offense or conduct.
- The time since the offense or conduct and completion of the sentence.
- The nature of the position sought.
A blanket exclusion for anyone with a conviction is not a substitute for this assessment. Connect the concern to actual job duties rather than general discomfort with a criminal record.
Follow both Fair Chance and adverse-action procedures
If the individualized assessment leads to a preliminary decision to deny employment, Government Code section 12952 requires written notice. The notice must identify the disqualifying conviction or convictions, provide a copy of any conviction-history report the employer obtained, and explain the applicant’s right to respond.
Give the applicant at least five business days after receiving the notice to respond. If the applicant timely disputes the report’s accuracy and states that they are taking specific steps to obtain supporting evidence, provide at least five additional business days. Consider timely submitted evidence, including information about inaccuracies, rehabilitation, or mitigating circumstances, before making a final decision.
If employment is ultimately denied because of conviction history, provide the required final written notice stating the final denial or disqualification, any existing procedure for challenging the decision or requesting reconsideration, and the applicant’s right to file a complaint with the California Civil Rights Department.
When a consumer report contributes to the decision, the FCRA adds separate requirements. Before adverse action, provide the report and the prescribed summary of FCRA rights under 15 U.S.C. section 1681b(b)(3). After adverse action, provide the notice required by 15 U.S.C. section 1681m(a), including the reporting agency’s information and the applicant’s report-access and dispute rights.
Build a consistent screening workflow
A documented process helps recruiters, managers, and screening vendors follow the same sequence. Practical safeguards include:
- Define the need: Identify which checks relate to the position and whether credit screening is legally permitted.
- Review forms: Check disclosures, authorization language, copy-request options, and required notices.
- Control timing: Prevent criminal-history screening before a conditional offer where required.
- Review results carefully: Separate potentially relevant information from records the law restricts.
- Track response periods: Avoid final decisions before required opportunities to respond have expired.
Check local rules as well. The City of Los Angeles and Los Angeles County have separate fair-chance ordinances that impose additional obligations. The County ordinance generally applies to employers located or doing business in unincorporated Los Angeles County that employ five or more employees who perform at least two hours of work per week in the unincorporated areas, and it may cover hiring and other employment actions. Limit access to reports and establish lawful retention and disposal procedures.
Talk to a California business attorney
Itkin Law offers a free consultation to discuss hiring-screening procedures and background-check concerns affecting employers or individuals. Schedule a free consultation or call (424) 603-8888.
This article is attorney advertising and provides general information only. It is not legal advice and does not create an attorney–client relationship. The law changes, and this article reflects the law as of its publication date. Every situation is different — contact us to discuss how the law applies to your exact circumstances. See our full disclaimer.
