Following the Los Angeles minimum wage ordinance that was enacted earlier this year, the City of Los Angeles has now enacted another ordinance that will significantly impact employers doing business within city limits.  On December 9, 2016, Mayor Garcetti signed into law the “Fair Chance” ordinance, which significantly limits the ability of Los Angeles employers to ask job applicants about criminal convictions.

Currently, at least 9 states, as well as many cities, have laws limiting the ability of private employers to inquire about applicants’ criminal histories.  These statutes and ordinances are sometimes referred to as “ban the box” laws because they prohibit the use of a criminal history “box” on job applications.  Most “ban the box” laws require that employers wait until after an interview or conditional offer of employment to inquire about criminal history.

California may soon follow, but currently, the state’s “ban the box” law is applicable only to government agencies.  In 2014, San Francisco enacted a Fair Chance Ordinance, which applies to employers with 20 or more employees.  Now, Los Angeles has followed suit with its own Fair Chance Ordinance.

The Los Angeles Fair Chance Ordinance applies to any employer with at least 10 employees that work two or more hours each week within the City of Los Angeles.  The ordinance prohibits employers from asking or requiring disclosure of a job applicant’s criminal history prior to a conditional offer of employment.  This includes any question that seeks the disclosure of a job applicant’s criminal history, such as a criminal history box on a job application or a question during an initial job interview.

Additionally, employers must engage in a “Fair Chance Process” before withdrawing a conditional offer of employment based on the applicant’s criminal history, no matter how severe the disclosed offense may be.  The “Fair Chance Process” requires the following:

  • Before withdrawing a conditional job offer based on a job applicant’s criminal history, an employer must notify the applicant that the job offer may be withdrawn due to the applicant’s criminal history, and must prepare a “written assessment” that addresses why the applicant’s criminal history is relevant to the position. This assessment must consider factors such as the gravity of the offense, time passed, and the nature of the job, and must be given to the applicant.
  • The employer must give a job applicant five business days to respond to the written assessment.
  • If the applicant provides any documentation or information in response, the employer must prepare a “written reassessment,” again with notice and a copy of the reassessment sent to the job applicant.
  • Employers must maintain records of any job applications, with corresponding written assessments and written reassessments, for a period of three years following the receipt of a job application.

Employers also may not retaliate against an employee or applicant for reporting any alleged violation of the Fair Chance Ordinance or for participating in the Fair Chance Process.

The LA Fair Chance Ordinance also places additional obligations on employers with respect to advertisements and notices:

  • Employers must state in every advertisement seeking applicants for employment that they will consider qualified applicants with criminal histories.
  • Employers must prepare and post a notice informing applicants of the Fair Chance Ordinance’s provisions in a conspicuous place at any location job applicants may visit.
  • Employers must send copies of the posted notice to every labor union with which they have a collective bargaining agreement.

Employees or job applicants alleging violations of the Fair Chance Ordinance must bring claims to the Department of Public Works within one year of a violation.  Under the ordinance, employers may be fined $500 up to $2,000 per violation.  Applicants or employees establishing a violation may recover some or all of these penalty amounts, up to $500 per violation.

Although the Fair Chance Ordinance will go into effect January 1, 2017, monetary penalties will not be imposed until July 1, 2017.  Generally, there are no exceptions to the ordinance, unless the employer is required by law to inquire about criminal history or prohibited by law from hiring individuals who have committed certain criminal offenses, or the position requires use of a firearm.

The ordinance calls for rules and regulations to be drafted establishing an administrative process for investigation and enforcement of alleged violations.  Sheppard Mullin will continue to monitor these developments and will provide updates as additional information becomes available.