Background Checks

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Seyfarth Synopsis: When the Legislature reconvenes from Spring Break on April 10, 2023, it will resume consideration of the employment bills that were among the 2,600 introduced.  Notable employment bills include those impacting new FEHA protected classes, leaves and accommodations, background checks, layoff and rehire rights, and more.

As one prominent Sacramento lobbyist tweeted: “More than 500 bills were…

Continue Reading Legislative Update: Which L&E Bills Will Flourish Or Wilt As The Legislature Resumes Work After Spring Break?

Seyfarth Synopsis: Taking it down to the wire, Governor Newsom approved the vast majority of labor and employment bills that ran the legislative gauntlet, including bills that will expand pay data reporting and pay scale disclosure requirements, extend COVID-19 Supplemental Paid Sick Leave, create mandatory wages and working conditions for fast food workers, and more.

On the night before his…

Continue Reading California Employment Legislative Update: Pay Transparency Headlines 2022 Session

Seyfarth Synopsis: Having run the legislative gauntlet, the fate of California’s 2022 employment bills now lie with Governor Newsom’s pen, including bills that would expand pay data reporting and pay scale requirements, extend COVID-19 Supplemental Paid Sick Leave, and create mandatory wages and working conditions for fast food workers, and more.

August 31, 2022, marked the close of the 2022…
Continue Reading Final Round: Employment Bills Making The Cut To The Governor

Seyfarth Synopsis: Headlining the employment-related bills that passed the May 27, 2022, House of Origin Deadline is AB 85, which extended COVID-19 Supplemental Paid Sick Leave to September of this year, as well as bills related to accommodations, leaves, retaliation, and workers’ compensation.

On the deadline for bill introduction, back in February, California legislators introduced 611 bills between the…
Continue Reading California Legislative Update: What’s Left To Affect You?

Seyfarth Synopsis: As the number of class actions alleging FCRA violations continues to skyrocket, it is critical for California employers to understand the basics of all laws affecting employment screening programs. This blog examines those laws and provides practical considerations for employers looking to hire or rehire employees during a shutdown affecting critical sources of information needed for background …
Continue Reading The Business of Background Checks During a Pandemic

Seyfarth Synopsis: California’s ban-the-box law strictly regulates how employers may obtain and consider background check information when hiring and making personnel decisions. What’s more, Los Angeles and San Francisco have their own ban-the-box ordinances. These ordinances and the California Labor Code create a patchwork of rules that put employers at risk when checking whether an applicant has a criminal record. …
Continue Reading California Employers Watch Out! Legal Minefields for Background Checks

Seyfarth Synopsis: California is rife with regulation of how employers may obtain and consider background check information for use in hiring and personnel decisions. The relatively new California ban-the-box law (effective January 1, 2018) and the older Los Angeles and San Francisco ordinances and amendments to the California Labor Code set strict rules on when and how employers can consider …
Continue Reading California Employers: Beware the Background Check Bugaboos

By Pam Devata and Dana Howells

Previously in this three-part series, we discussed employer obligations concerning background checks furnished by investigative consumer reporting agencies.  In this third and final segment, we highlight the requirements for California employers who do their own background checks without utilizing the services of a consumer reporting agency. 

Public Records Searches and Disclosure Obligations.  In the Internet age, many types of public records are instantly searchable. Employers who do their own public records searches (either on-line or using old fashioned techniques) must beware of a little-known California law.  Civil Code Section 1786.53(a)  provides broadly that any person who uses personal background information—even information that is a matter of public record—for employment purposes must provide that information to the consumer within 7 days.  “Public records” are defined as records documenting an arrest, indictment, conviction, civil judicial action, tax lien or judgment.

Here’s the most peculiar twist:  the obligation to provide the public records exists regardless of whether the employer obtained actual copies of  public records or simply obtained a verbal summary of the contents.  

By Pam Devata and Dana Howells

Both federal and California law impose additional requirements on the users of “background checks” over and above the requirements for “consumer credit reports.” California’s  most significant peculiarity is that it regulates not only background checks done by a consumer reporting agency, but also background checks done by employers in-house.  In this second part of a three-part series, we focus on California background checks done by an investigative consumer reporting agency.

Employers who use agencies to conduct background checks need a disclosure and authorization under both state and federal law.  However, California’s imposes additional burdens on employers.    

Disclosure Requirements.

Federal Law:  The federal Fair Credit  Reporting Act (the FCRA) imposes requirements on users of “investigative consumer reports.”  Investigative consumer reports are defined by federal law as containing information obtained through personal interviews of neighbors, friends, and other associates about character, general reputation, personal characteristics and mode of living.  

California’s definition is broader.

California Law:  The California Investigative Consumer Reporting Agencies Act’s (“ICRRA’s”) more expansive definition of “investigative consumer report” includes all third party collection of information about character obtained through “any means,” not just personal interviews with acquaintances. This broad definition would  include reference checks performed by a third party.  An employee could argue that any type of background check—other than a pure credit check—is covered by the ICRRA.  In several recent lawsuits, courts have found the ICRRA unconstitutionally vague because criminal background checks concern both credit-worthiness and character.  Therefore, it is unclear whether ICRRA or the less severe California Consumer Credit Reporting Agencies Act is the governing law.

Under California’s ICRRA, employers seeking authorization to procure an investigative consumer report must disclose:
Continue Reading Checking Out Applicants (Part 2): Using Consumer Reporting Agencies for Background Checks

By Pam Devata and Dana Howells

Complying with the federal Fair Credit Reporting Act (the FCRA) is not easy. Compliance with both the FCRA and California restrictions on credit and background checks is much more challenging. Given California’s extra-strength privacy protections and penchant for workplace regulation, it is not surprising that California has peculiarities when it comes to credit and other background checks.  In Part 1 of a three part blog, we take a dive into credit checks—California style.

California is one of  a growing number of states with laws restricting use of credit history for employment. Effective January 1, 2012, California Labor Code Section 1024.5 generally prohibits the use of credit reports for employment purposes by private sector employers.  If an exception to Section 1024.5 permits an employer to use credit reports, California employers must comply with both the FCRA and the California Consumer Credit Reporting Agencies Act, which are not always congruent. 

Comparing and contrasting the FCRA with the California Consumer Credit Reporting Agencies Act

What FCRA requires—in a nutshell.  Prior to conducting a background check on an applicant or employee through a third party, an employer must:

  • Provide a notice/disclosure to the employee/applicant that the employer will seek a credit report.  The disclosure must be clear, conspicuous, and made in a document consisting solely of the disclosure.  This is a huge area of class action litigation.
  • Supply a copy of  “A Summary of Your Rights Under the Fair Credit Reporting Act.”
  • Obtain written authorization/consent from the applicant/employee. 

Prior to taking adverse employment action against an applicant/employee based, in whole or in part, on a consumer credit report (or investigative consumer report—more about those in Part 2), employers must follow a two-step notification process required by the FCRA:
Continue Reading Checking Out Applicants (Part 1): California Credit Checks