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Background Checks in California are Different than the Rest of the United States

Posted By Editor, Laurie, Thursday, March 2, 2017
Updated: Thursday, March 2, 2017

Contributed by Attorney Lester Rosen, Founder and CEO of Employment Screening Resources® (ESR)

Speaker session: Avoiding Lawsuits and Bad Hires with Effective Background Screening March 6th - 3:00p

When it comes to background checks and due diligence, California has unique rules that go beyond the other 49 states and the federal Fair Credit Reporting Act (FCRA), the national law that regulates background checks. While California employers also need to follow the FCRA, there are additional “only in California” rules that employers must follow to the letter of the law.  A failure to dot every “i” or cross every “t’” allows applicants to sue for up to $10,000 regardless of damages.

And it’s not just state rules that employers need to understand.  Cities and counties have passed their own version of “Ban the Box” rules that also significantly impact how employers do background checks.  San Francisco and Los Angles are two large counties that have special rules for when and how criminal records can be considered.

Here are a few key areas that employers need to understand:

  1. California Special Rules and Forms:  Although there have been cases challenging the constitutionality of some California rules, the California Investigative Consumer Reporting Agencies (ICRA) Act sets out some very specific rules that differ substantially from the national rules.  In California, for example, very specific language is needed on the front of a background report as well as in the release and authorization signed by a consumer.  California requires that a screening firm be identified along with their phone number.  California also has stricter rules about what goes into an agreement between a screening firm and an employer. California mandates the use of a Spanish language form in certain situations.

  2. Privacy and Offshoring: California passed a first in the nation offshoring law that applies specifically to background checks, with a number of requirements imposed on both employers and background firms.

  3. Expungements: California provides significant protection to ex-offenders who committed crimes, including felonies, when it comes to job hunting and what employers can legally discover or use.  The law prohibits an employer from asking about, seeking, or utilizing criminal convictions that have been judicially set aside.  Employers violating the new prohibitions can face civil penalties and even misdemeanor criminal charges if done intentionally. It also allows a convicted person to get a case expunged sooner. 

  4. Credit Reports: California regulates the use of credit report checks of job applicants and current employees by employers for employment purposes in very specific ways.

  5. Social Media Passwords:  California consumers are protected from revealing their social media passwords.

Despite all of the laws and special rules in California, “due diligence” through background checks is still mission critical for employers in the Golden State. Employees are typically a firm’s greatest investment and largest cost, and each hire also represents a large potential risk. Every employer has an obligation to exercise due diligence in hiring since an employer that hires someone it either knew – or should have known through reasonable screening – was dangerous, unfit, or unqualified for the work can be sued for negligent hiring.

The bottom line: California employers must maintain compliance with a whole different set of rules than the rest of the country when conducting due diligence background checks.

Lester S. Rosen is an attorney at law and CEO of  Employment Screening Resources, an accredited national background screening company located in California. He is the author of The Safe Hiring Manual and The Safe Hiring Audit. Lester is also a consultant, writer, and frequent presenter nationwide on pre-employment screening, safe hiring and legal compliance issues. He has qualified and testified in the California, Florida and Arkansas Superior Courts as an expert witness on issues surrounding safe hiring and due diligence. He has been a presenter for the past eight years at the SHRM National Conference. Attorney Rosen will cover more at his session, Avoiding Lawsuits and Bad Hires with Effective Background Screening, at HR West 2017 this Monday.


Tags:  employee background screening  employment law  employment lawyer  HR law  HR West 2017 

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