Hire With Less Risk: Limits On Employment Candidate Inquiries In California

California state and local legislation has made the employment application and interview process nearly as nerve-wracking for employers as it is for prospective candidates. From salary history to criminal history, topics once considered “standard” and mundane are now sensitive topics that, in some cases, are entirely off-limits. Topics that interviewers used to consider harmless and even “friendly” have long been illegal under California’s Fair Employment and Housing Act. The requirements, new and old, impact various steps of the hiring process. Below are some key areas of legally limited inquiry to consider when conducting interviews.

Compensation History 

California employers are prohibited from asking job candidates for their prior salary history or relying on that information in making hiring decisions or setting compensation. Employers must avoid any question seeking a prospective candidate’s salary or benefits at her or his current or former jobs at all points in the hiring process. The prohibition on salary history requests continues even after an employee is hired. 

Recent legislation clarifies that employers may ask about a candidate’s salary expectations for the position. And, if a candidate voluntarily discloses salary history, the employer may consider or rely on that information in setting salary (as long as other legitimate reasons support the disparity and prior salary is not the only factor justifying any disparity in pay). In practice, however, employers must carefully navigate this limited exception, and should be sure to avoid questions that implicate salary history details beyond the specific information voluntarily disclosed by the candidate.
 
For more information, please read our detailed advisories here and here.

Investigative Consumer Reports & Background Checks 

Investigative consumer reports supply information about the character, general reputation, personal characteristics, and mode of living of the subject of the report. Third-party administrators that conduct background checks and employers who use the resulting reports must comply with all applicable requirements.

To obtain an investigative consumer report from a Consumer Reporting Agency (“CRA”), employers must disclose this intention to the candidate being investigated and obtain the candidate’s written authorization. Employers must provide a “Summary of Rights” under the Fair Credit Reporting Act (“FCRA”) as well as under the California Civil Code, each on a separate sheet of paper, before the report is requested or run. The FCRA requires that employers that use third-party background checks add new terms to the disclosure, which are designed to alert the job candidate to his or her rights to place a so-called “security freeze” on his or her credit report from a nationwide CRA. See our detailed advisory here.

Before taking adverse action based on an investigative consumer report, employers must provide the candidate with a copy of the “Pre-Adverse Action Disclosure,” and include a copy of the report. This gives the candidate an opportunity to explain any negative information. If, after a reasonable amount of time, the candidate has failed to appeal the “Pre-Adverse Action Disclosure” or to provide a reasonable explanation of the information in the report, the employer must provide an “Adverse Action Disclosure,” confirming that the applicant has been rejected, and containing the following information: (1) a statement that the adverse action is based on information contained in the background report; (2) notice of the applicant’s right to dispute the accuracy or completeness of the provided information; (3) the name, address and number of the CRA used; (4) a statement that the CRA had no hand in the decision to take adverse action and cannot give specific reasons for it; and (5) notice of applicant’s right to another free consumer report. Investigative reports that are not job-related may violate federal and state civil rights laws if they have a disparate impact on minority job candidates.

If criminal history is sought as part of an investigative consumer report, employers must follow California law relating to criminal history inquiries (see below).

More information on FCRA requirements and California-specific requirements for background checks can be found here.

Criminal History 

Employers may not ask about criminal history information on job applications and may not inquire about or consider criminal history at any time before a conditional offer of employment has been made. This type of law is commonly referred to as a “ban-the-box” law, as it eliminates the frequently used criminal history check box found on many employment applications.

When conducting a criminal history background check, California employers with more than five employees cannot: (1) include questions that seek the disclosure of a candidate’s conviction history on any job application; (2) ask about or consider the conviction history of an candidate until he or she has received a conditional offer; or (3) consider, distribute, or disseminate information related to certain prior arrests that did not result in convictions, referral to or participation in a diversion program, and convictions that have been sealed, dismissed, or expunged. Even after an employment offer is made, employers can only consider convictions, not arrests, unless the employee is out on bail pending trial.

Some California cities have their own “ban the box” regulations. Read our detailed advisory about California here, and about city ordinances for San Francisco (here) and Los Angeles (here and here).

Except where there are statutory requirements relating to jobs and convictions, Fair Employment and Housing Council regulations and Equal Employment Opportunity Commission Enforcement Guidance impose further limitations on an employer’s ability to consider criminal history when making employment decisions. For instance, a rule that automatically bars employment to any candidate who has a record of criminal conviction will likely violate state and federal guidance where: (1) the conviction is not job-related, and (2) the policy has a disparate impact upon a protected class. Read our detailed advisory here. 

If information from a criminal history report is used for employment purposes, an employer must comply with the FCRA and California Civil Code requirements in connection with Investigative Consumer Reports & Background Checks (see above). Factors to consider in reviewing criminal records include: the nature and gravity of the offense, the candidate’s age at the time of the offense, the number of offenses, the time that has passed since the offense, conduct, and/or completion of sentence, and the relatedness of the offense to the job held or sought.

Consumer Credit Checks

A consumer credit report is any written, oral or other communication of any information by a CRA bearing on an individual’s credit worthiness, credit standing, or credit capacity, which is used as a factor in evaluating a candidate for employment, promotion, reassignment, or retention. Except for a list of exceptions (below), employers and prospective employers (not including certain financial institutions) are generally prohibited from using a consumer credit report for employment purposes. 

The prohibition against the use of credit reports for employment purposes does not apply to certain positions and situations, including certain managerial positions, positions with the state Department of Justice, law enforcement, positions for which information in the credit report is legally required to be disclosed, positions with access to confidential/proprietary information, positions with regular access to personal information (such as social security numbers, dates of birth, and credit or bank account information), positions with regular access to more than $10,000, or positions that include the authority to enter into financial transactions on behalf of the employer. 

If one of the exceptions applies and the employer is able to obtain and use the report, there are still restrictions on how the employer goes about obtaining the report. An employer must comply with the FCRA and California Civil Code notice requirements in connection with Investigative Consumer Reports & Background Checks (see above).

Protected Classes

Longstanding requirements under both California’s Fair Employment and Housing Act (“FEHA”) and Title VII of the Civil Rights Act impact the types of questions that can be asked at an interview more than employers often realize. Interviewers must be aware of questions that may illegally implicate a protected class under FEHA:

National Origin/Religion/Race: One of the easier traps for interviewers to fall into as they build a rapport with candidates are questions such as “Where are you from?”, “How long have you lived in the U.S.?”, or “What church do you go to?” These questions may be interpreted as questions about the candidate’s national origin, race, citizenship, or religion. Interviewers should not ask which languages a candidate speaks unless the job requires the candidate to speak and/or write a particular language fluently or if knowledge of another language would be beneficial for the position. Interviewers should tread lightly when asking about hobbies or outside activities, as the interviewer could discover protected classification information when asking about clubs, societies, lodges, or organizations to which the candidate belongs that might indicate race, religion, national origin, or other protected categories. 

Citizenship: Interviewers should not question a candidate’s citizenship (unless U.S. citizenship is a legal job requirement). It is fair to ask whether a candidate can verify identity and eligibility to work in the U.S., but only if the interviewer is asking all candidates this question, not just select candidates. And, it is fine to tell all applicants that the ability to prove identity and eligibility to work in the U.S. are job requirements.

Marital Status: Any questions soliciting information pertaining to parenthood or marital status are prohibited. Interviewers should avoid questions in which responses would reveal whether a candidate is married, single, pregnant, or plans to be pregnant in the future.

Gender: Interviewers should not ask about the candidate’s sex, gender, gender identity or expression or whether the candidate is transgender, transitioning, or has transitioned.

Age: Avoid questions that indirectly seek information about a candidate’s age. For example, stay away from questions that could reveal a candidate’s age, like “What year did you graduate from high school?” The interviewer may ask if a candidate is over a certain age, however, if the job has a minimum age requirement.

Disability: Interviewers should not ask about a candidate’s disability, medical history, medications, or workers’ compensation history, nor should they attempt to solicit this information from the candidate’s medical provider(s). Employers are required to reasonably accommodate qualified employees with disabilities who can perform the essential job functions. Employers can ask if a candidate can perform the essential functions of the position, either with or without reasonable accommodation.  

***

It is important that employers make managers, supervisors, human resources, recruiting personnel, and others involved in this process aware of these rules and requirements. If they have not done so already, employers should take steps to ensure that all of the above laws are being considered, honored, and put into practice in their organizations through training and education of the necessary parties.