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:
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By Laura Maechtlen and Kristen Verrastro

During onboarding, it would not be unusual for an employer to ask a new hire to give written authorization for deductions from their final paycheck if the employee does not return employer provided uniforms, tools, or equipment.  It also would not be unusual for employers to ask employees to supply their own equipment and tools, or clothing as a uniform when reporting for work.

In California, however, written authorization executed during the onboarding process will not suffice for reimbursement deductions at the time of termination.  Additionally in California, employers cannot require employees to supply certain clothing, tools, and equipment without reimbursement.

Uniforms

When it comes to uniforms, federal law differs from California law:

Federal law:  Federal law may allow employers to pass the costs of providing or maintaining uniforms to employees, as long as the employee’s pay would not drop below minimum wage in doing so.

California law:  California law requires that employers pay for or reimburse nonexempt employees for all costs associated with uniforms, regardless of the employees’ compensation.

What is a “Uniform”?
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By Laura J. Maechtlen and Chantelle C. Egan

It’s payday!  If the employer uses direct deposit, an employee can conveniently and immediately access wages without going to the bank (or waiting for the check to clear).  For that reason, it might seem that every new employee would want direct deposit.  But, employers must be careful.

By Chantelle Egan and Laura Maechtlen

Drug testing implicates the California right to privacy, which is enshrined in our Constitution.  Therefore, employers must be careful when drug testing is a component of their onboarding process.

The General Rule  

A private employer in California can require a job applicant to pass a pre-employment drug test as

By Laura Maechtlen and Kristen Verrastro

We’ve all been in this situation: you’re trying to get to know someone better, so you ask that person a seemingly innocent question which inadvertently elicits an answer you wish you could have avoided!  If this happens in a social setting it’s unlikely to create a big problem, but