Many employers are already familiar with California’s Fair Chance Act (“FCA”), which went into effect in 2018 and governs how employers may consider an applicant’s criminal history in hiring decisions. Effective October 10, 2024, San Diego County adopted its own Fair Chance Ordinance (“SDFCO”). Covered employers in the County must now comply with both the county’s SDFCO in addition to the state’s FCA.
To Whom Does the SDFCO Apply?
The new ordinance applies to positions that involve performing at least two hours of work on average each week within the unincorporated[1] areas of San Diego County for a covered employer. A covered employer is any private employer who is either located in or doing business in the unincorporated areas of San Diego County, with five or more employees. This includes any entity that evaluates an applicant’s or employee’s criminal history on behalf of a covered employer or acts as an agent of a covered employer.
Key Provisions of the SDFCO
Under the ordinance, covered employers are prohibited from inquiring about an applicant’s criminal history until after a conditional job offer is made. Additionally, they cannot include questions about criminal history on applications before extending such an offer. If a covered employer “intends to deny … [e]mployment, transfer, or promotion” based on criminal history, the employer must conduct a written individualized assessment evaluating whether the criminal history “has a direct and adverse relationship with the specific duties that justify” the decision, and follow a county-specific pre-adverse action letter process.[2] Finally, covered employers must retain all records related to employment applications for at least one year and must provide these records to the Office of Labor Standards and Enforcement (OLSE) or the applicant upon request.
What Is Different Between the FCA and the SDFCO?
Although there are many similarities between California’s FCA and the County’s SDFCO, there are several noteworthy differences:
- While the FCA requires an individualized assessment of whether the applicant’s criminal history has a “direct and adverse relationship with the specific duties” that justifies denying the applicant the position, the SDFCO imposes the additional requirement that the individualized assessment be written.
- In addition to the individualized written assessment, if a covered employer decides that an applicant’s criminal history disqualifies them from employment, transfer, or promotion, the SDFCO requires that covered employers must notify the applicant in writing. This notification must include: (1) details of the disqualifying conviction(s) that led to the preliminary decision; (2) a copy of the criminal background check report or relevant information source; (3) information about the applicant’s right to file a complaint with the OLSE regarding the SDFCO and with the state’s Civil Rights Department concerning the FCA; and (4) an explanation of the applicant’s right to respond to the preliminary decision, including the deadline for doing so and the possibility of submitting evidence to challenge the accuracy of the criminal background check report.
- Under the FCA, certain covered employers are exempt from the individualized assessment requirements. The SDFCO does not provide exemptions similar to the State FCA.
Enforcement and Penalties
The ordinance grants the OLSE substantial enforcement powers, including investigating violations, imposing escalating monetary penalties (up to $5,000 for a first violation, $10,000 for a second, and $20,000 for third and subsequent violations), and recommending suspension or revocation of business licenses for noncompliance. The OLSE is also directed to issue rules clarifying employer violations.
However, the OLSE cannot issue fines under the SDFCO until July 1, 2025.
Next Steps for Covered Employers
Considering the detailed requirements regarding the timing of background checks, the content of notices, and the need for individualized written assessments, employers should review their hiring, recruitment, and personnel policies and documents to ensure they comply with federal, state, and local regulations. Covered employers may also want to consider implementing training regarding the SDFCO for any personnel working in recruiting, in human resources, or on any hiring committee.
FOOTNOTES
[1] Unincorporated areas of San Diego County are regions that are not part of any city but fall under the jurisdiction of the County of San Diego for local governance. Residents in these areas rely on the county for services like law enforcement, fire protection, and public works, rather than city governments.
[2] See County Code Reg. Ordinances, Title 2, Div. 1, Ch. 27, Sec. 21.2704.