San Francisco has posted FAQs explaining key provisions of the city’s so-called Fair Chance Ordinance (“Ordinance”), which took effect on August 13, 2014. The Ordinance “bans the box,” prohibiting most private employers and contractors in the city from asking job applicants about their criminal histories until after the first interview or following a conditional offer of employment. The Ordinance further restricts the types of criminal offenses about which employers and contractors may inquire or otherwise may consider when making hiring and personnel decisions. And, the Ordinance affords expansive anti-retaliation protections to employees who complain of violations, and imposes various notice, posting, and record-retention obligations on employers and contractors in connection with criminal background inquiries. For more on the Ordinance, see our prior client alerts dated February 24, 2014, March 28, 2014, and August 8, 2014, and our editorial published with the Wall Street Journal.
The 17-page guidance issued by the city not only summarizes many aspects of the Ordinance, but also helps to clarify several of the following provisions:
The Ordinance defines the term “employer” as any person located or doing business in the city and county of San Francisco (the “City”), and that employs 20 or more persons (including the owner(s) and management and supervisorial employees) regardless of location. “Employment” covered under the Ordinance includes any occupation, vocation, job or work (including temporary, seasonal, and part-time work, as well as contracted, contingent and commission-based work), so long as the employment occurs in whole or substantial part within the City.
The guidance clarifies that:
- the Ordinance applies to employers that are not based in San Francisco so long as the employee’s position is “in whole or in substantial part within the City”;
- “in substantial part” means an average of only 8 hours of work performed a week in San Francisco;
- an employer should look to previous years to determine if a position will require an average of 8 hours of work a week in San Francisco (if the position or employer is new, the employer is to evaluate the job description and the work expected of that position, before making a “reasonable, good faith determination”);
- if an employee lives in San Francisco and telecommutes from his or her home for a company located outside of San Francisco, so long as the employee works at least 8 hours a week in San Francisco and the company otherwise employs at least 20 people anywhere, the employee is covered under the Ordinance;
- the Ordinance covers independent contractors; and
- an employer who utilizes a third-party recruiting firm or staffing agency for hiring purposes is otherwise responsible for complying with the Ordinance.
The guidance also (i) makes clear that the law applies to companies with contracts with the City, regardless of the size of the company, and (ii) provides examples of the types of contracts covered or excluded by the law. For more on the coverage requirements of the Ordinance, see our prior client alert dated February 24, 2014.
As noted above, unless otherwise exempted, employers may not make criminal inquiries on an initial employment application. The guidance specifically addresses whether employers may include a criminal history question on a multistate application if the application contains a disclaimer that applicants in San Francisco are not to answer the question. In order of preference, the guidance makes the following recommendations:
- multistate employers “should consider omitting” the question from the form given the risk that “an applicant will inadvertently provide arrest and conviction information”;
- “otherwise, it would be preferable to use a separate job application form for San Francisco positions,” or to “disable the answer field for any such question in electronic applications”; and
- should a multistate employer choose to use one application form, it should “include a clear and conspicuous disclaimer next to the question instructing applicants for San Francisco positions not to answer that question.”
For more on the prohibitions of the Ordinance, including the types of arrests and convictions about which an employer or contractor may inquire or otherwise consider at any time, see our prior client alert dated February 24, 2014.
It also is worth noting that, under the Ordinance, before an employer or contractor takes an adverse employment action based on a permissible aspect of the applicant’s or employee’s criminal history, it must provide notice to the individual of the action contemplated and the basis for it. If, within seven days of that notice, the individual provides the employer or contractor with notice, either orally or in writing, of evidence that the criminal history record is inaccurate, or any evidence of rehabilitation or other mitigating factors, the employer or contractor is to “delay the adverse action for a reasonable period” to reconsider its decision in light of the information. Upon taking any final adverse action based on conviction or arrest history, an employer or contractor is to furnish a notice of the decision to the applicant or employee.
The guidance opines that, what constitutes a reasonable period of time to delay an adverse action, “will usually depend upon the specific circumstances of the applicant, the position, and the employer.” In making this determination, employer can weigh such “factors” as:
- “the amount of mitigating evidence submitted by the applicant”;
- “the average length of time that the employer spends in selecting a candidate”; and
- “the urgency with which a position must be filled.”
“In general,” according to the guidance, “a reconsideration period will likely be reasonable if it gives the employer an opportunity to conduct a new individualized assessment that takes into account all additional information.”
The Ordinance requires employers to post a notice prepared by the Office of Labor Standards (OLSE). The guidance clarifies that employers must post the notice in English, Spanish, Chinese, and Tagalog (all available on the OLSE website), and are “responsible” for translating and posting notices in any other language spoken by 5% of more of the employees. The guidance makes clear that employers are to post the notices in a “conspicuous location” at every workplace, job site, or other area in San Francisco under the employer’s control that is frequently visited by their applicants and employees. The guidance provides examples of suitable places for posting, such as an “employee break room” or on the “company notice board.”
Prior to making any permissible criminal inquiries, the Ordinance also requires employers and contractors to distribute the notice to applicants and employees, but does not specify whether employers must distribute the notice in each of the languages specified for posting the notice. In the absence of clarity, employers and contractors should err on the side of caution and distribute the notice in all of the languages in which they would otherwise post the notice.
The guidance also reminds employers that they must send a copy of the notice to each labor union or representative of workers with which they have a collective bargaining agreement or other agreement of understanding that is applicable to employees in San Francisco.
Under the Ordinance, employers must state in all advertisements for employees (including, as the guidance points out, “online job postings”) that they will consider for employment qualified applicants with criminal histories. The guidance notes that a “Now Hiring” sign or sticker in the front of a store need not include this disclosure.
The guidance provides the following example of an acceptable statement in a job advertisement: “Pursuant to the San Francisco Fair Chance Ordinance, we will consider for employment qualified applicants with arrest and conviction records.” The guidance also provides the following examples of statements that, unsurprisingly, are not acceptable: “no felons” or “no criminal history allowed.” However, the guidance even casts doubt on the legality of more neutral language such as “a background check must be passed.”
The guidance also addresses to what extent federal or state law preempts the notice and poster provisions of the Ordinance. One the one hand, if federal or state law requires a criminal background check for a particular position, then, according to the guidance, the Ordinance (including the notice and poster provisions) does not apply to that position. However, the guidance warns that, if other positions at the company are not subject to superseding federal or state law, then the company still must comply with the notice and posting requirements of the Ordinance as to those positions.
Recordkeeping and Reporting Obligations
Under the Ordinance, employers and contractors must retain records, for a period of three years, documenting compliance with the law. According to the guidance, examples of such records include (but are not limited to):
- documentation showing that the employer posted the required notices;
- any background check reports obtained;
- copies of job ads and postings;
- job application forms distributed;
- job applications submitted by applicants;
- documentation of employment interviews (including forms, notes, and interview questions);
- any information provided to the applicant regarding potential adverse action;
- any information received from an applicant or employee in response to a background check;
- documentation of all individualized assessments conducted;
- any documentation of rehabilitation or mitigating factors submitted by applicants or employees;
- documentation of adverse actions based on unresolved arrest or conviction records; and
- documentation of hiring or promoting individuals after considering unresolved arrest or conviction records.
The guidance also makes clear that employers must submit an annual reporting form to OLSE, which will be available on the OLSE website annually.
San Francisco employers should carefully review the guidance described in this post and take any necessary additional measures to ensure compliance with the Ordinance.