On December 9, 2016, the City of Los Angeles enacted the Fair Chance Initiative Ordinance, a "ban the box" law that significantly restricts employers when conducting a criminal background check or taking adverse employment action merely because of an applicant's criminal history. Los Angeles joins the growing list of states and cities throughout the country implementing "ban the box" laws. The Los Angeles City ordinance takes effect on January 22, 2017, with penalties and fines imposed starting July 1, 2017.

The ordinance applies to all private employers with more than 10 employees (including owners, managers, and supervisors) located or doing business in the City of Los Angeles. Notably, employees covered by this law include persons who perform "at least two hours of work on average each week" in the City. Exceptions apply to city and local government departments, state or federal government units and employers that are required by law to inquire about past convictions. The law also provides an exception if a convicted applicant is prohibited by law from holding a certain position or if the applicant would be required to possess or use a firearm in the course of employment. Applicants include any individual who submits an application for work performed in the City, including temporary, seasonal, commission, contracted, and even unpaid training positions.

Employers must comply with the following requirements:

• State in all advertisements and solicitations (both internal and external) that they will consider qualified applications with criminal histories in a manner consistent with the ordinance. 

• Post a notice of the ordinance in a conspicuous place at every workplace and job site in the City.

• Refrain from asking applicants about their criminal history until after a conditional offer is made. 

• If, after a conditional offer has been made, the employer conducts a criminal background check that discloses criminal history information unfavorable to the applicant, employers must still perform "a written assessment that effectively links the specific aspects of the criminal history with risks inherent in the job sought by the applicant. The employer must consider various factors, including the nature and gravity of the offense, time that has elapsed, and nature of the job sought. 

• Before taking any adverse action, the employer must also engage in the "Fair Chance Process," which involves: (1) providing the applicant written notification of the adverse employment action; (2) providing a copy of the written assessment described above; and (3) providing any other information or documentation supporting the proposed adverse action. The employer then must allow the applicant five business days to provide additional information or documentation regarding the accuracy of the criminal history results or mitigating factors. If the applicant provides correcting or mitigating information, the employer must conduct another written assessment and inform the applicant of its decision with a copy of that written assessment.

Penalties and fines will be imposed up to $500 for the first violation, $1,000 for the second, and $2,000 for subsequent violations. The law also has anti-retaliation provisions.

Employers who do business in the City of Los Angeles should review all applications and hiring policies to ensure compliance with this new law. Applicants and current employees must be properly informed of the requirements of the ordinance, and personnel should be trained in the Fair Chance Process.