New Employer Compliance Obligations in Los Angeles County

Disclaimer: The content of this blog is provided for informational purposes only and should not be construed as legal advice. AccuSourceHR recommends contacting a knowledgeable employment law attorney for specific guidance.

Los Angeles County has enacted Ordinance No. 2024-0012, also known as the Fair Chance Ordinance for Employers. While companies who recruit and retain employees and/or other workers in California are familiar with various fair chance laws, the new ordinance goes beyond what is already required of employers from federal, state, and local law perspectives. Probably the most comparable version of a California fair chance law is the City of Los Angeles Fair Chance Hiring Ordinance. The Los Angeles County version extends beyond the LA City Ordinance in terms of its requirements. Because this ordinance is more complex than others of its kind, AccuSourceHR recommends reviewing the ordinance itself with knowledgeable legal counsel. Below is a summary for informational purposes.  

Effective Date
September 3, 2024

Application of Ordinance: Employer, Employment, Applicant/Employee
The law applies to an “employer” that is located or doing business in the unincorporated areas of Los Angeles County. A covered employer is one who employ five or more employees regardless of location, meaning that the five employees do not themselves have to be located in Los Angeles County. “Employer” is also defined more broadly to include job placement, temporary agencies, referral agencies and other employment agencies, and non-profit agencies. Finally, “employer” also includes any entity that evaluates an applicant’s or employee’s criminal history on behalf of an employer, or acts as an agent of an employer, directly or indirectly, in evaluating an applicant’s or employee’s criminal history. 

“Employment” is also defined broadly, including any occupation, vocation, job, or work. This includes  temporary or seasonal work, part-time work, contracted work, contingent work, work on commission, and work through the services of a temporary or other employment agency, including non-profit organizations, or any form of vocational or educational training with or without pay. The ordinance specifies that the physical location of the employment must be within the unincorporated areas of the County, including when an individual is working remotely, teleworking, or telecommunicating from an area within the unincorporated areas of the County. 

An “applicant” is an individual who is seeking “employment” with an “employer,” which are defined above. Keep in mind that under the ordinance, employees who are seeking promotions are also considered applicants. An “employee” is any individual whose job involves performing at least two hours of work on average each week within unincorporated areas of Los Angeles County. 

Restrictions on Inquiries into Criminal History
Before reviewing the ordinance’s requirements, it is important to point out employers must continue to comply with any applicable federal, state and local laws. For example, if an individual resides in Los Angeles County, California law will also apply and an employer must still comply with California law. For example, California law prohibits employers from inquiring about or considering criminal history until after a conditional offer of employment has been made. 

The County ordinance is more restrictive, prohibiting employers from asking about asking applicants directly about criminal history even after extending a conditional job offer until an additional event occurs. Here, employers may directly ask about criminal history only after the employer provides a copy of the criminal background check report to the individual, a vast departure from other fair chance act processes. 

There are also limits to the scope of questions an employer can ask. Employers are limited to asking about or considering convictions older than seven years from disposition date with limited exceptions for certain roles. Employers also cannot ask about or consider non-criminal infractions unless a job requires driving. Additionally, employers cannot inquire about or consider convictions that arise out of conduct that has been decriminalized since the conviction, or diversion and deferrals. 

Criminal History Consideration and Adverse Action Requirements
If an employer plans to take adverse action, it must first conduct a documented, written individualized assessment of the individual’s criminal history. The individualized assessment must consider whether the criminal history has a “direct adverse and negative bearing” on his or her ability to perform the duties of the position in that it justifies taking adverse action. The employer must consider the factors outlined in California state law when conducting the individualized assessment. 

The employer must send a form of a pre-adverse action letter (called the “preliminary determination” in the ordinance) before it takes adverse action, in whole or in part, on the criminal history. The letter must notify the individual that he or she has the right to submit evidence of rehabilitation among other required contents. The employer must include a written copy of the individualized assessment. Importantly, the letter and the assessment must be sent by both mail and email if the employer has the individual’s email address. 

As with general adverse action processes, the employer must meet a waiting period before taking adverse action and must hold the position during that period. The initial period is five business days from when the individual receives the pre-adverse action notice. As with the California state law, the Los Angeles County ordinance outlines when the letter is deemed “received” based on when and when it was sent. Because the letter must always be mailed (and also emailed if the email address is known), the waiting period for Los Angeles County will always be based on when the letter is mailed. If the individual provides certain information within that initial five-day period, such as notification of a dispute, the employer must defer any final decision for at least ten additional business days. The employer must also provide the opportunity to meet with the individual to discuss verbally if requested. If the individual provides additional information, the employer must consider it and document the second assessment in writing before making a final decision. 

If, after the process above, the employer decides to take adverse action, it must provide a final adverse action notice (called the “final determination” notice in the ordinance), including any contents required by federal, state and local law. This includes providing a copy of any second individualized assessment as well as notice of the right to submit a complaint to the Los Angeles County Department of Consumer and Business Affairs for ordinance violations. As with the pre-adverse action notice, the letter and any second assessment must be sent by both mail and email if the employer has the individual’s email address. 

Employers should take special notice of the timeliness requirement: adverse action notices sent more than 30 days after an individual provided a timely response to the pre-adverse action notice will be presumed untimely. The employer can rebut the presumption as outlined in the ordinance. 

Job Postings and Related Materials
As with similar fair chance laws, the Fair Chance Ordinance prohibits language in job solicitations that states that individuals with criminal history will not be considered for hire or should not apply, such as “no convictions.” A posting is allowed to include language such as “background check required.”

It is important to note that the ordinance requires that job postings contain language stating that qualified Applicants with arrest or Conviction records will be considered for Employment in accordance with the Los Angeles County Fair Chance Ordinance for Employers and the California Fair Chance Act. Additionally, if an employer is required to consider certain local, state, or federal laws or regulations that may restrict or prohibit hiring individuals with certain criminal records, the employer must include those laws and regulations in the job postings.

Another major change is for employers who condition job offers on a criminal background check. In that situation, the job posting and related materials must include a list of all material job duties of the specific position where the employer reasonably believes criminal history may have a “direct, adverse, and negative relationship” that could potentially result in the withdrawal of the conditional job offer. Additionally, if an employer intends to review information beyond criminal history, the notice must include the list of what may be considered. For example, this could include employment and education history. 

Offer Letter Contents
Employers subject to the ordinance must meet certain requirements when providing offer letters to applicants covered under the ordinance. Conditional offer letters must include specific information under the ordinance: 1) A statement that the conditional offer is contingent upon the review of criminal history; and 2) A statement that the employer has good cause to conduct a review of criminal history for the specific job position with supporting justification provided in writing. The ordinance provides information on how an employer can establish good cause. The offer letter must also list any other information beyond criminal history that will be considered by the employer such as education and employment history, driving history, and others. 

Mandatory Posting
Employers must post notice of the ordinance at every workplace and must also post it on websites frequently visited by employees and applicants. If an employer is unionized, it must provide the notice to the unions. 

Retention Requirements
All documentation related to compliance with the ordinance must be retained for a minimum of four years from the receipt of an applicant’s employment application.

Exceptions 
The ordinance does allow exceptions for regulated employers, such as banks, or certain types of positions that may have restrictions in hiring.  We recommend consulting with counsel to determine whether the exceptions may apply to your screening program. 

Additional Considerations
AccuSourceHR has previously notified clients through webinars, blog posts, and other methods of background screening delays due to identifier redaction, particularly in Los Angeles County. These delays may also impact the Fair Chance Ordinance process and should also be considered.