Employment Background Checks in California: What’s Legal & What’s Not

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Traditional gate in Chinatown San Fransisco at night

California employers routinely conduct background checks when screening job applicants. Sometimes they are used for current employees too.

While background checks are common, it’s crucial to understand your rights regarding these checks. California provides some of the nation’s strongest employee privacy protections. These legal safeguards extend to background checks.

Employers must follow specific rules when conducting background checks. They must also follow strict rules if using the information found to make employment-related decisions. Violating these rules can lead to employer legal liability and various penalties.

So, what makes a background check legal versus one that crosses the line? That is the key question this article explores. Understanding your rights is important, even if you’re not sure about potential violations.

We’ll start by outlining the most important federal and California laws governing employment background checks. Then we’ll discuss what steps you can take if you believe an employer violated these laws.

Finally, we’ll answer some common questions about background checks in California.

Table Of Contents
  1. Summarizing the Fair Credit Reporting Act and its Impact on Employee Background Checks
  2. Background Check Laws Specific to California
  3. How California's Ban the Box Law Protects Job Applicants
  4. Other Relevant California Laws on Employment Background Checks
  5. What to Do If an Employer Violates Your Rights Regarding Background Checks
  6. Answers to Commonly-Asked Questions About Employment Background Checks in California

Summarizing the Fair Credit Reporting Act and its Impact on Employee Background Checks

The federal Fair Credit Reporting Act (FCRA) sets baseline national standards. It governs employment background checks across the U.S.

Importantly, FCRA only applies when employers use third-party companies. These are known as Consumer Reporting Agencies (CRAs). It doesn’t apply to background checks conducted in-house by an employer’s own staff.

CRAs compile background reports, called “consumer reports” for employers to use in decision-making. The term “consumer report” here is broad. It includes criminal background checks, driving records, and other kinds of checks.

FCRA requires employers to follow these steps before they use a CRA to conduct a background check:

1)  Provide Notice: Give the applicant or employee clear written notice that a background check may be run. This must be in a standalone document.
2)  Obtain Consent: Get the individual’s written permission to obtain the report before ordering it.
3) State Potential Use: Inform the individual that information from the report could be used in making employment decisions, including potentially negative ones.

Before taking negative action based on a CRA report, employers have to follow two additional steps.

First, the employer must provide a pre-adverse action notice. This notice comes before any negative action is taken, like not hiring, denying a promotion, or firing.

It must include a copy of the actual background report and a summary of the individual’s rights under FCRA. This gives the person a chance to review the report and potentially explain or correct inaccuracies before the final decision.

What if the employer decides to proceed with the negative action? They have to provide a final adverse action notice. This notice informs the individual of the action taken and provides information on their right to dispute the report’s accuracy or completeness.

Essentially, FCRA aims for transparency. It gives you the right to see information used against you and to dispute errors with the reporting agency.

FCRA also limits how far back CRAs can report certain negative information. Generally, consumer reports cannot include:

Arrests or other non-conviction records older than 7 years.
Bankruptcies older than 10 years.

However, criminal convictions have no time limit for reporting under FCRA.

State laws, like California’s, may impose stricter limits though. Remember: FCRA provides federal minimum standards. California law often adds greater protections for applicants and employees.

Let’s explore California’s specific background check laws.

Background Check Laws Specific to California

The federal FCRA sets minimum standards for background checks nationwide. But states like California can and do provide stronger protections for workers.

California’s primary state law governing these checks is the Investigative Consumer Reporting Agencies Act (ICRAA). ICRAA often gives job applicants and employees greater rights than FCRA alone.2

A key difference involves scope. FCRA primarily governs reports from third-party Consumer Reporting Agencies (CRAs). ICRAA, however, can apply more broadly. Its coverage focuses on the type of information collected and how it’s gathered, not just who prepares the report. It may cover certain investigations conducted directly by employers.

ICRAA uses distinct terms. The reporting agency is an ICRA. The report is called an investigative consumer report (ICR).

What kind of background checks fall under ICRAA? It does not include standard credit reports (which have separate regulations).

Instead, ICRAA cover investigations into subjective areas like a person’s:

Character
General reputation
Personal characteristics
Mode of living

ICRAA applies to information gathered “through any means.” This could include methods like personal interviews, reference checks, or reviewing publicly available records.

However, important limitations exist. Some basic verification checks might fall outside some ICRAA requirements. This could include simply confirming past employment dates or educational degrees without probing into character or reputation.

Let’s explore the specific notice, consent, and access rights guaranteed under ICRAA.

How California’s Investigative Consumer Reporting Agencies Act (ICRAA) Regulates Employee Background Checks

ICRAA is similar in some ways to FCRA. However, its protections go above and beyond federal law. ICRAA applies to employment background checks for work performed within California. This holds true regardless of where the employer is based.

What Employers Need to do Before Performing Background Checks

Employers must follow specific steps before conducting ICRAA-covered background checks:

a) Provide Written Notice: They must give clear, written notice that a background check may be done. This notice often includes a checkbox allowing you to request a copy of the report (called an ICR).
b)  Obtain Written Consent: They must get your separate written authorization (consent) before conducting the check.

A narrow exception exists for these rules. Notice and consent might not be required beforehand if the check is solely to investigate suspicion of specific employee misconduct or wrongdoing.

Employers using ICRs must also certify they have a permissible purpose. Permissible employment purposes generally include using the report for:

1)  Hiring decisions
2)  Decisions about promotion, reassignment, or transfer.
3) Decisions about retention (firing or not firing an employee), often related to potential employee misconduct.
4) Compliance needed to meet specific federal, state, or local laws requiring such checks for the position.

So, employers usually need a valid job-related reason. They generally must provide notice and obtain consent before running an ICRAA-covered check (unless the narrow misconduct investigation exception applies).

What Employers Must Do After the Background Check

ICRAA also sets rules for accessing the report information.

If an outside agency (ICRA) prepared the report, the employer must provide you a copy if you requested it (typically via the checkbox on the initial notice). They must send it within three business days after they receive the report themselves. The report provided must include agency contact information and other required disclosures.

What if the employer gathered public records directly (in-house) that fall under ICRAA? They must usually offer you a copy of those records. They must provide these within seven days, unless you specifically waived your right to receive a copy beforehand (e.g., on the application).

But, if they take adverse action based on those public records, they must give you a copy, even if you waived that right. There’s one exception: if the employer is investigating potential misconduct, they can wait until the end of their investigation.

ICRAA also limits reporting old negative information, often more strictly than FCRA. Reports generally can’t include criminal convictions older than seven years. However, this 7-year reporting limit doesn’t apply if the job’s salary is $70,000 or more per year.

California law mandates specific steps if the report might cause negative action. Employers must usually provide notice before taking adverse action (the pre-adverse action stage). This notice typically includes the report copy and gives you time to respond or dispute inaccuracies.

This notice must include:

1) A copy of the background check report
2) A summary of your rights under the FCRA
3) Instructions on how to dispute inaccurate or incomplete information
4) A reasonable amount of time (usually 5 business days) to dispute the information

Once the decision is finalized, employers must provide an additional final adverse action notice. This notice confirms the decision and provides information about your rights to dispute the report.

The notice must include:

1) A statement that the employer has taken an adverse action.
2) If they used a CRA, the name, address, and phone number of that agency.
3) A statement that the CRA did not make the decision to take adverse action and can’t explain the reasons for it.
4) A notice of your right to dispute the accuracy of the report.
5) A notice of your right to get a free copy of your consumer report within 60 days.

Let’s look at other important California laws affecting background checks now.

How California’s Ban the Box Law Protects Job Applicants

California’s Fair Chance Act provides significant protections for job applicants. It’s commonly known as the “Ban the Box” law. It aims to give people with past criminal records a fairer opportunity to secure employment, going beyond basic federal guidelines.

This law applies to California employers with 5 or more employees. It strictly limits when employers can inquire about or consider an applicant’s criminal history. Usually, this inquiry is banned before the employer makes a conditional job offer.3

Specifically, employers cannot ask about or use the following information prior to making a conditional offer:

1)  Any history of criminal convictions.
2)  Arrests that didn’t result in a conviction (subject to limited exceptions).
3) Participation in pretrial or post-trial diversion programs.
4) Convictions that have been legally sealed, dismissed, expunged, or similarly cleared from the public record.

This means applicants generally have the right to apply and interview for most jobs first. The potential impact of a past criminal record is only considered later in the process, if it’s relevant and legally permissible. (Note: Exceptions exist for positions where specific laws require certain background checks earlier).

What happens if an employer makes a conditional job offer and then wants to withdraw it based on lawfully obtained criminal history information? They must follow a strict, detailed process first:

1) Individualized Assessment: The employer cannot have a blanket policy denying hire. They must individually assess the conviction(s). Key factors include the nature and gravity of the offense, how much time has passed, and the specific duties of the job being sought.
2)  Preliminary Notice: If considering withdrawing the offer based on this assessment, the employer must provide the applicant written notice. This notice identifies the specific conviction(s) causing concern. It usually includes a copy of any conviction history report used.
3)  Opportunity to Respond: The applicant must be given adequate time (typically at least five business days) to respond to the notice. They can submit evidence challenging the accuracy of the record or provide evidence of rehabilitation or other mitigating circumstances.
4)  Reassessment: The employer must carefully consider any information submitted by the applicant before making a final decision.
5)  Final Notice: If the employer still decides to withdraw the job offer after this process, they must provide the applicant with a final written notice explaining the decision and informing them of any relevant appeal rights.

The Fair Chance Act helps prevent unlawful discrimination against applicants based on their records. While criminal history itself isn’t a protected characteristic like race or gender under FEHA, employers cannot use criminal history information as a pretext for such discrimination. For example, rejecting one applicant for a minor offense while hiring another applicant of a different race with a similar record would likely be illegal discrimination.

In 2012, the U.S. Equal Employment Opportunity Commission (EEOC) issued extensive guidance instructing employers not to rely on convictions and arrest records when making employment decisions.4

Do you believe an employer violated your Fair Chance Act rights during the hiring process? Consulting with an experienced California employment lawyer is highly recommended. They can explain your specific rights and help you decide the best course of action, which may include filing a complaint with the California Civil Rights Department (CRD).

Other Relevant California Laws on Employment Background Checks

California has several other key background check laws. They place further limits on employment background checks and how employers can use gathered information. Key examples include:

Photographs and Fingerprints: Employers generally can’t share employee photos or fingerprints collected for work with other employers or third parties if the purpose or effect is to potentially blacklist the employee (Labor Code § 1051). Internal collection for legitimate identification or security needs might be permissible under specific rules.5
Genetic Information: Employers cannot request, require, purchase, or use genetic information when making employment decisions (FEHA). This includes genetic test results and family medical history related to genetics.6
Arrests Without Conviction: Employers generally can’t ask about or consider information about arrests that did not lead to a conviction. A narrow exception exists for arrests where the person is currently out on bail or their own recognizance while awaiting trial (Labor Code § 432.7).7
Marijuana Convictions: Employers typically can’t ask about or use information regarding marijuana convictions that are more than two years old (Labor Code § 432.8). (Note: Separate California laws also now protect most off-duty cannabis use from employment discrimination).8
Salary History: California employers cannot ask job applicants about their past salary history. They also cannot rely on discovered salary history information to decide whether to offer a job or determine the salary offer (Labor Code § 432.3).9
Sex Offender Records: Employers generally cannot use information obtained from California’s registered sex offender website (Megan’s Law) for employment decisions. Using this information is permissible only if federal or state law specifically requires or authorizes such a check and consideration for that particular job (e.g., positions involving children).10

These specific California laws, combined with the federal FCRA and state ICRAA, create a strong framework. They aim to protect job applicants and employees from unfair or discriminatory background check practices.

What to Do If an Employer Violates Your Rights Regarding Background Checks

Now that you know more about your basic rights regarding employment background checks, what action can you take if you believe an employer violated those rights?

First, gather and carefully review all related documents. Did the employer provide proper written notice before the check? Did they obtain your valid consent? Check the background report itself for accuracy.

Mistakes in background reports are unfortunately common. Inaccurate information could unfairly lead to a negative hiring decision or other adverse action.

If you find clear errors in the report or obvious procedural violations, you might consider contacting the employer directly first (in writing is best). Sometimes clear communication can resolve honest mistakes quickly.

But what if contacting the employer doesn’t resolve the issue, or if you believe the violation was intentional or involved illegal discrimination or retaliation? Consulting an experienced California employment lawyer is the next best step.

Many employment lawyers offer a free initial consultation. This provides a confidential setting to discuss your specific situation. It’s usually offered without any obligation to hire the lawyer or pursue a case.

Ask potential lawyers if they handle cases on contingency. This common fee arrangement means you typically owe no attorney fees unless and until they recover compensation for you.

A lawyer will explain your legal options clearly. They can assist with filing formal complaints if appropriate. This might involve agencies like the California Civil Rights Department (CRD) or the federal EEOC. They also advise on whether filing a lawsuit is appropriate.

Be aware of strict filing deadlines. Legal time limits, known as statutes of limitations, apply to these claims. Missing the deadline typically means losing your right to seek legal remedy forever.

Deadlines vary depending on the specific law violated. For instance, claims under California’s Fair Chance Act (related to criminal history checks) generally must be filed with the CRD within 3 years of the violation. Other types of claims may have different or shorter deadlines. Prompt action is essential.

If illegal violations are proven in your case, you might recover various types of relief through settlement or court order. Potential remedies can include:

Lost wages: back pay for past harm or front pay for future harm if wrongly denied hire, fired, or demoted.
Statutory damages: set penalty amounts available under laws like FCRA or ICRAA for certain violations, sometimes even without actual financial loss.
Emotional distress damages for significant anxiety, stress, or harm caused by the violation.
Attorney’s fees and court costs incurred pursuing your rights.
Reinstatement to your former or a comparable job position (if applicable).
Injunctive relief: court orders demanding the employer change its illegal practices.

Do you believe your rights were violated during an employment background check process? Contact us using the button above (on desktop) or below (on mobile). We can help you understand your options and potential remedies.

The FAQ section below provides answers to common inquiries.

Answers to Commonly-Asked Questions About Employment Background Checks in California

Question: Can my employer perform a background check on me without my permission?
Answer: Generally no for most types of checks. Employers usually need your written consent before running checks like criminal history or obtaining consumer reports. This consent requirement applies particularly strongly to checks involving medical information (which face very strict limits pre-offer).

If an employer conducts checks in-house relying only on public records, California’s ICRAA requires they give you notice. That notice usually must include a box to check if you want a copy of public records found. Unless you waive that right, they must provide them if requested or if adverse action is taken. Violating notice or consent rules can lead to legal liability.
Question: Does my employer need my permission every time they do a background check?
Answer: Usually yes, for checks covered by FCRA or ICRAA. Your notice and consent are typically required for each separate report requested from an outside agency. A narrow exception might exist for ongoing investigations into specific employee misconduct.
Question: Does my employer have to give me everything they find in the background check?
Answer: Not necessarily all information gathered, but you have rights to key reports. If an outside agency (CRA/ICRA) prepared an investigative consumer report, you have the right to request a copy (usually via the initial notice). The employer must then provide it within 3 business days after they receive it.

If the employer collected public records directly themselves (in-house), they must offer you the choice to receive a copy. If you don’t waive the right, they must provide it within 7 days. Information like informal notes from reference checks conducted directly by the employer might not need to be provided under these specific background check copy rules.
Question: What if there’s a mistake in my background check report?
Answer:  If the report was from a third-party agency, you have a legal right under federal and state law to dispute errors directly with that agency. The adverse action notices provide information on how to do this. If your employer gathered incorrect information in-house (e.g., public records), dispute the inaccurate information directly with your employer immediately. Put your dispute in writing and provide any correcting documentation you have.
Question: Can my employer check my credit report?
Answer:  Generally, no. California law prohibits employers from accessing your credit report unless the job falls under a specific exemption.  Here are some examples of jobs where a credit check might be allowed:

 •  A position in the state Department of Justice
  •  A managerial position
  •  A position as a sworn peace officer or other law enforcement job
  •  A position for which a credit check is required by state or federal law
  •  A position involving access to certain sensitive personal information (like bank account numbers or social security numbers) or access to confidential or proprietary company information
  •  A position in which the person is a named signatory on the employer’s bank or credit card account
  •  A position requiring signatory authority over the employer’s financial accounts
  •  A position that involves regular access to $10,000 or more of cash

If your employer plans to check your credit report, they have to notify you and explain why they’re allowed to do so under the law.11

Citations

  1. 15 U.S.C. § 1681 et seq. (Go back)
  2. Cal. Civ. Code § 1786 (Go back)
  3. Cal. Gov. Code § 12952 (Go back)
  4. Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964 (Go back)
  5. Cal. Lab. Code § 1051 (Go back)
  6. Cal. Gov’t Code § 12940(o) (Go back)
  7. Cal. Lab. Code § 432.7 (Go back)
  8. Cal. Lab. Code § 432.8 (Go back)
  9. Cal. Lab. Code § 432.3 (Go back)
  10. Cal. Pen Code § 290.46 (Go back)
  11. 2011 CA A.B. 22 (Go back)

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