On July 24, 2023, the California Office of Administrative Law approved the California Civil Rights Council’s modifications to regulations pertaining to California’s Fair Chance Act. Under the Fair Chance Act, employers with five or more employees are prohibited from asking an applicant about conviction history before making a job offer and setting forth other requirements pertaining to an applicant’s criminal history.

The modifications take effect on October 1, 2023.

The following are a few of the modifications that employers should take note of.

Notice of Preliminary Decision and Opportunity for Applicant Response

The modification clarifies that if an employer makes a preliminary decision after an “initial” individualized assessment that the applicant’s conviction history disqualifies the applicant, the employer shall notify the applicant in writing. The notice must include all of the following:

1. Notice of disqualifying conviction that is the basis for the preliminary decision.

2. A copy of the conviction history report relied upon.

3. Notice of the applicant’s right to respond to the notice before the preliminary decision becomes final.

4. Explanation of the type of evidence an applicant can submit to challenge the conviction history or as evidence of rehabilitation or mitigation.

5. Notice of the deadline for the applicant to respond.

Individualized Assessment

The modified regulations clarify that an individualized assessment must be a “reasoned, evidence-based determination,” and provide detail on what may be taken into consideration in assessing the three factors to determine whether the applicant’s conviction history has a direct and adverse relationship with the specific duties of the job that justify denying the applicant the position.

Evidence of Rehabilitation or Mitigating Circumstances

The modified regulations also clarify that evidence of rehabilitation or mitigating circumstances is optional and may only be voluntarily provided by the applicant or by another party at the applicant’s request.  The regulations state-specific actions that an employer is prohibited from taking: refusing to accept additional evidence voluntarily provided by an applicant, requiring an applicant to submit any additional evidence or a specific type of documentary evidence, disqualifying an applicant from the employment conditionally offered for failing to provide any specific type of evidence, requiring an applicant to disclose their status as a survivor of domestic or dating violence, sexual assault, stalking or comparable statuses, and/or requiring an applicant to produce medical records and/or disclose the existence of a disability or diagnosis.

Reassessment

The modification provides examples of the factors the employer may consider when making a final decision regarding whether to rescind a condition offer of employment.

The modified regulations provide more detail on the types of evidence an employer may consider including:

1. When the conviction led to incarceration, the applicant’s conduct during incarceration, including participation in work and educational or rehabilitative programming and other prosocial conduct;

2. The applicant’s employment history since the conviction or completion of the sentence;

3. The applicant’s community service and engagement since the conviction or completion of sentence, including but not limited to volunteer work for a community organization, engagement with a religious group or organization, participation in a support or recovery group, and other types of civic participation; and/or

4. The applicant’s other rehabilitative efforts since the completion of sentence or conviction or mitigating factors.

Labor Contractors, Union Halls, and Client Employers

The modified regulations add labor contractors, union hiring halls, and client employers as types of employers governed by the Fair Chance Act and the regulations and specify that they must comply with the requirements for workers who are admitted to a pool or availability list.

IRS Work Opportunity Tax Credit

The modified regulations specify that an employer may require applicants to complete the IRS form 8850 or equivalent before a conditional offer is made, so long as the information gathered is used solely to apply for the credit.