San Francisco Enacts Law Limiting Use of Criminal Background Checks

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By Joyce E. Cutler

Feb. 18 --Employers, contractors and affordable housing providers will have limited use of criminal background checks in vetting workers or tenants under a new San Francisco ordinance signed Feb. 17 by Mayor Edwin Lee (D).

The Fair Chance Ordinance requires employers employing 20 or more workers regardless of location--including employment agencies, contractors, subcontractors and housing providers--to limit the use of criminal history information. An estimated one in four California adults has an arrest or conviction record, according to the ordinance.

Employers, housing providers and contractors, including construction contractors, are barred from asking or conducting a background check until the entity determines that the individual's qualifications meet the requirements for the position or affordable housing unit. Conviction history may be obtained after the first live interview. Applications can't include inquiries as to convictions, including those judicially dismissed, exonerated or committed while a juvenile.

Not covered under the ordinance are contracts worth less than $5,000 in a fiscal year and property contracts of less than 30 days' duration. Only applicants and employees who would be or are performing work in furtherance of a contract within the city are covered.

The law doesn't require an employer to give preference to or hire an unqualified person with an arrest or conviction record or a housing provider to rent to an unqualified tenant, stating: “this Article shall not be construed to limit an employer or housing provider's ability to choose the most qualified and appropriate candidate from applicants for employment or housing.”

Chamber Support
Under the ordinance, which was supported by the San Francisco Chamber of Commerce, the conviction must bear a direct relationship to the housing or position.

The employer or provider must consider whether the position or housing offers the opportunity for the same or a similar offense to occur. Applicants have the right to offer evidence about whether their conviction is inaccurate and offer evidence of rehabilitation and other mitigating factors. Arrests that do not lead to conviction can't be considered in any manner.

Jim Lazarus, chamber senior vice president of public policy, in a Jan. 28 letter to the board, said the measure “helps ensure that employers can fill job openings with qualified applicants in a timely manner and balances that with the right of applicants to be judges on their suitability for available positions early in the hiring process. Individual employers are free to make the best hiring decisions for their businesses without second-guessing by the city or threat of a private right of action.”

The ordinance comes as San Francisco's unemployment rate was 4.8 percent in December, according to the Federal Reserve.

Penalties for Violations
Under the new ordinance, the first violation found during the initial year the ordinance is in effect will result in warnings and notices to correct. Second violations carry a $50 administrative penalty for each employee or applicant, increasing to $100 per employee or applicant violation for a second violation.

Where prompt correction is not forthcoming, the San Francisco Office of Labor Standards Enforcement may refer the matter to the city attorney for civil action.

Relief could include reinstatement, back pay, payment of benefits or salary unlawfully withheld, additional liquidated damages of $50 per employee whose rights were violated and appropriate injunctive relief.

The law goes into effect 30 days after signing and becomes operative in 180 days.

Growth of Background Checks
The ordinance, which passed on final reading Feb. 11, said the law recognizes the socioeconomic impacts of serial incarceration. San Francisco is responding to the “widespread proliferation” in the use of criminal background checks, with hundreds of companies offering online low-cost checks that turn up decades-old records for minor offenses, the law said.

More than 50 U.S. cities and counties have passed laws regulating use of criminal background checks, including Philadelphia, Seattle and Buffalo, N.Y., the ordinance said.

Ten states have adopted laws regarding background checks and four states--Hawaii, Massachusetts, Minnesota and Rhode Island--have applied their policies to private employers.

The San Francisco ordinance follows the state's prison realignment implemented in 2011 legislation (A.B. 109) that shifted to counties the focus on alternatives to incarceration that have a proven track record of reducing recidivism. Lack of housing and employment are significant causes of recidivism, the ordinance said.

By Joyce E. Cutler

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