San Francisco’s Fair Chance Ordinance.  Effective August 1, 2014, a new San Francisco city ordinance, called the Fair Chance Ordinance, will strictly limit an employer’s ability to gather and utilize information about the criminal history of an applicant or employee.  Specifically, covered employers are not allowed to ask about an applicant’s criminal history including convictions and pending charges on their employment application or in the first interview of an applicant.  This “Ban the Box” ordinance will affect every covered employer in San Francisco because it requires revision of applications, advertisements, and interview processes.

 What is Ban the Box?  First some background, it has been estimated that one in four adults in the United States have a criminal record that will show up on a routine background check, and that a criminal record will reduce an individual’s lifetime earnings by as much as 40%.  Because of this data, a nationwide movement has emerged to limit the consideration of past criminal history on job applications and in the early stages of the interview process.  This movement has been given the name “Ban the Box” referring to the common practice of asking applicants to check a box on a job application form if they have ever been convicted of a crime.

To date more than 50 cities and counties in the US have enacted policies limiting inquiries into individual’s criminal history in the employment hiring process.  Last year, the California legislature passed a bill prohibiting state and local governments from asking job applicants about their conviction history until after it has been determined that the applicant meets the minimum employment qualifications.[1] Now San Francisco has enacted an ordinance to apply Ban the Box to private employers.[2]  If you are a covered employer in San Francisco, it is very likely that your employment application, interview process, and job advertisements may violate this new ordinance.

What Employers are Covered? The ordinance, will apply to all private employers “located or doing business” in San Francisco with 20 or more employees[3]. The count of employees includes employees working both in and outside of San Francisco and also includes business owners, management and supervisors.

What type of Employment is Covered?  The ordinance applies to any type of work, full time, part time, on commission or under contract, whether through direct employment or through an agency and includes any form of vocational or educational training with or without pay. 

What and When can an Employer Inquire about Criminal History?  After the first interview has been completed, an employer can inquire about an applicant’s criminal history but only within limits and with disclosures.  Specifically, the employer can only inquire about misdemeanor and felony convictions that occurred in the last seven years. Generally, no inquires can be made about an arrest not leading to a conviction; an infraction; the participation or completion of a diversion or deferral of judgment program; a conviction that has been dismissed, expunged, voided, invalidated or otherwise rendered inoperative; or a conviction or other judgment rendered in the juvenile justice system.

In addition, any inquires regarding an applicant’s or employee’s criminal background, whether made directly by the employer or through a background checking agency, must be disclosed to the applicant or employee.  This disclosure must contain the same information as will be contained in a poster that San Francisco’s Office of Labor Standards Enforcement (OSLE) will create and publish.  Update:  This poster and further information is now available at: http://sfgsa.org/index.aspx?page=6599

A major change that the Fair Chance Ordinance makes to existing law is that it will require a notice to the applicant or employee of an adverse action before the adverse action is taken regardless of how the employer obtains information regarding the relevant criminal history information.  In addition covered employers are required to affirmatively state in job advertisements that they will consider applicants with a criminal history.

What Happens if an Employer Violates the Fair Chance Ordinance?  Under the new ordinance, the city can assess penalties against employers in an administrative proceeding.  The City Attorney also may bring a civil action against an employer and may request legal or equitable relief including back pay, benefits, liquidated damages of $50 for each day the violation occurred, and reasonable attorneys’ fees and costs.

What Should Employers in San Francisco or Contracting in San Francisco Do?  Any employer who is located in San Francisco or contracts with San Francisco  should immediately work with counsel to revise all job application forms, advertisements, and job postings and train staff involved in recruiting and managing employees and ensure that the OSLE poster is posted when it becomes available and retain all applications and recruiting materials for at least three years.

If you have any questions, please contact Valerie J. Menager at vmenager@carr-mcclellan.com or at (650) 342-9600.