Publications

New California Laws Restrict Employer Access to Criminal and Pay Histories

5/1/2018 Articles
North Bay Business Journal

If you are planning to hire new employees to work in your winery, you should be aware of two new employment laws that restrict employers from obtaining and relying upon certain information about job applicants.

In 2017, the California legislature passed laws limiting employers from collecting and considering information about applicants’ criminal backgrounds and prohibiting employers from asking applicants to disclose their prior salaries. Employers – even small businesses – who fail to comply with these new laws can be subjected to administrative charges, government investigations, costly litigation, and significant damages and penalties. All California employers should carefully consider their hiring processes and practices to ensure compliance.

Employers are Restricted From Inquiring into Applicants’ Criminal Backgrounds

Many employers perform criminal background checks on job applicants, but collecting and relying on criminal history information in making hiring decisions has been scrutinized due to concerns about the practice’s impact on certain groups. In recent years, California has passed a series of “ban the box” measures which restrict employers’ ability to rely on criminal history information.

Now, any employer with five or more employees may not ask about or consider an applicant’s criminal history until after the employer makes a conditional job offer. Further, employers may never consider, distribute, or disseminate information related to arrests that did not result in convictions, referrals to pretrial or post-trial diversion programs, or convictions that have been sealed, dismissed, expunged, or eradicated pursuant to law.

In addition, employers who intend to rely on criminal history in employment decisions must show that the practice is “job-related and consistent with business necessity.” Employers must also individually assess whether the applicant’s conviction history has a “direct and adverse relationship with the specific duties of the job,” considering the nature and gravity of the offense, time passed since the offense or conduct and completion of the sentence, and the nature of the job.

If an employer preliminarily decides that the applicant’s conviction history disqualifies him or her from employment, the employer must (1) notify the applicant in writing and (2) allow the applicant at least five business days to respond to the notice and provide evidence challenging the accuracy of the conviction report before the decision becomes final.

Employers May Not Solicit Applicants’ Prior Salaries

While an applicant’s salary history has historically been a central data point in wage negotiations, a new California law has put an end to that practice. In 2017, the California legislature prohibited employers from obtaining and relying on salary history information in making employment decisions.

The new law, which applies to all employers in California, prevents employers from relying on an applicant’s salary history in determining whether to offer employment or how much to pay him or her. Employers cannot – whether orally, in writing, personally, or through an agent – seek salary history information, including compensation and benefits, about an applicant for employment. Further, employers must now provide the pay scale for a position to applicants who request it.

Importantly, the law does not prohibit an applicant from voluntarily and without prompting disclosing salary history information to a prospective employer, and does not prohibit an employer from considering or relying on that voluntarily disclosed information in setting that applicant’s salary. It also does not prohibit employers from considering salary information that is publicly available. However, the law is clear that an applicant’s prior salary, by itself, is not sufficient to justify any disparity in compensation.

Best Practices for California Employers

To comply with new laws relating to job applicants, below is a list of best practices for California employers:

1. Ensure that job applications and online postings do not seek information about criminal history or salary history.

2. Establish a salary range or fixed salary for every position and ensure that salary negotiations take place within those parameters. Be prepared to provide a pay scale to job applicants upon request.

3. Train interviewers to avoid questions about salary history or criminal background.

4. Carefully consider whether, and to what extent, the consideration of an applicant’s conviction history is consistent with business necessity.

5. Establish a consistent and neutral individualized assessment policy for the consideration of applicants’ criminal backgrounds which complies with FEHA regulations and considers the factors articulated in Cal. Gov. Code § 12952(c).

6. Develop a process which allows applicants to challenge adverse employment decisions based on criminal background in compliance with FEHA regulations and the provisions of Cal. Gov. Code § 12952(c).

Firm Highlights

News

Farella Announces 2024 Leadership Council on Legal Diversity Pathfinders: Taylor Rottjakob and John Ugai

Farella Braun + Martel is proud to announce that senior associates  Taylor E. Rottjakob and John M. Ugai have been named 2024 Leadership Council on Legal Diversity (LCLD) Pathfinders. Pathfinders have been identified as...

Read More
News

Scraping Battles: Meta Loses Legal Effort to Halt Harvesting of Personal Profiles

Alex Reese spoke to Matt Fleischer-Black of  Cybersecurity Law Report about the Meta v. Bright Data decision and its impact on U.S. scraping case law. Read the article here (paywall or trial).

Read More
Publication

Employment Law Update for Nonprofits With Holly Sutton

Welcome to  EO Radio Show - Your Nonprofit Legal Resource . Charities, foundations, and their founders often request help addressing employment practices and compliance questions. In this episode, host Cynthia Rowland is joined by Holly...

Read More
News

Farella Braun + Martel Earns San Francisco Green Business Recertification

Read More
Publication

Nonprofit Quick Tip: State Filings in North Carolina and South Carolina

Welcome to  EO Radio Show - Your Nonprofit Legal Resource . Episode 75 is the tenth in a series of Quick Tip episodes focusing on the details of state registration of nonprofit corporations. With...

Read More
Publication

Insurance Market Crushes Wineries and Wine Country Homeowners

We keep hearing about how difficult it is for winery and vineyard owners to get property insurance these days, both for their homes and their wine businesses in California’s wildfire-prone areas. Those who have...

Read More
News

JPMorgan Chase Accuses TransUnion of Stealing 'Trade Secrets'

Intellectual property practice chair Eugene Mar provided expert commentary to American Banker for the article "JPMorgan Chase Accuses TransUnion of Stealing 'Trade Secrets'." In the article, he said: "By filing this as a trade...

Read More
Publication

Corporate Transparency Act: A Guide on Beneficial Ownership for Nonprofit Executives

The Corporate Transparency Act, enacted as part of the National Defense Authorization Act for Fiscal Year 2021, represents a significant shift in regulatory requirements for entities across the United States. This act, set to...

Read More
News

North Coast Industry Insiders Weigh In on Why California Cannabis Tax Revenue Slipped in 2023

Jeff Hamilton spoke to Susan Wood with the North Bay Business Journal for the article "North Coast Industry Insiders Weigh In on Why California Cannabis Tax Revenue Slipped in 2023." Read the article with Jeff's...

Read More
Publication

Corporate Transparency Act: State of the Law and Beneficial Ownership Reporting Requirements

Key Points: Despite ongoing legal challenges, the Corporate Transparency Act (CTA) generally remains in effect and enforceable. Clients should continue to abide by its regulations. Initial reports for entities formed in 2024 are due within...

Read More