Effective July 1, 2017, new regulations will further limit employers’ ability to consider criminal history when making employment decisions.

On March 27, 2017, the Office of Administrative Law approved the Fair Employment Housing Counsel’s new regulations clarifying existing limitations on criminal background checks and, in large part, conforming to the Equal Employment Commission’s position that criminal background checks on applicants may have an adverse impact on protected classes.

Potential Disparate Impact

The new regulations, which largely track the Equal Employment Opportunity Commission’s (“EEOC”) April 2012 Enforcement Guidance, require employers to demonstrate that any criminal history information sought is job-related and consistent with a business necessity. An applicant or employee challenging an employer’s criminal background check has the initial burden to show the employer’s policy or practice of considering criminal history has a disparate impact upon a protected class (e.g., race, national origin, and so on).

If the applicant or employee demonstrates a disparate impact, the burden shifts to the employer to establish that the policy nonetheless is justifiable because it is job-related and consistent with business necessity. The employer also must demonstrate that the policy or practice is tailored to the specific circumstances, taking into account: (1) the nature and gravity of the offense or conduct; (2) the time that has passed since the offense or conduct and/or completion of the sentence; and (3) the nature of the job held or sought.

Where an employer adopts a bright-line policy or practice automatically disqualifying all applicants with certain types of past convictions, the new regulations impose a rebuttable presumption that the policy or practice is not sufficiently tailored to the specific circumstances of the job.

The new regulations recognize that certain jobs, like those that have particular licensing requirements, and certain employers, by state or federal law, are prohibited from employing people with certain criminal records. Compliance with state or federal criminal history screening requirements is a viable defense for employers.

Takeaway

Employers using criminal background checks should review carefully their policies and practices to ensure they are in compliance with these new regulations as well as applicable local ordinances (such as Ban the Box ordinances enacted in Los Angeles and San Francisco).