The City of Los Angeles passed the “Fair Chance Initiative for Hiring (LAFCIH),” a new “ban-the-box” legislation that goes into effect January 22, 2017, with monetary fines for non-compliance starting July 1, 2017. The LAFCIH applies to most private sector employers that (1) are located in or doing business in the City of Los Angeles; and (2) employ 10 or more people. The law covers both applicants and incumbent employees in virtually any type of employment situation.

The ordinance prohibits covered private employers from inquiring about an applicant’s criminal history until a conditional offer of employment has been extended, and imposes significant compliance obligations, including a requirement that before making an adverse decision based on a criminal record, the employer “performs a written assessment that effectively links the specific aspects of the applicant’s criminal history with risks inherent in the duties of the employment position sought by the applicant.” At a minimum, the employer must consider factors identified by the Equal Employment Opportunity Commission in its 2012 Enforcement Guidance and any other factors that may be required by rules or guidelines promulgated by the city’s Department of Public Works, Bureau of Contract Administration [Department] which will be administering the LAFCIH.

The employer must then engage in a “fair chance process,” allowing the candidate to provide information or documentation regarding the accuracy of the criminal record or other information that the employer should consider, such as evidence of rehabilitation or other mitigating factors. The proposed position must be held open for at least five business days after the candidate has received the employer’s notification and assessment. If the candidate provides additional information or documentation, the employer is required to consider the new information and perform a written re-assessment.

Additionally, the LAFCIH provides that all covered employers include the following language in any advertisement or solicitation seeking applicants: “The employer will consider for employment qualified applicants with criminal histories in a manner consistent with [the Los Angeles Fair Chance Initiative for Hiring].” There is also a notice posting requirement, which must be in a conspicuous place at every workplace, job site, or other location in the City of Los Angeles under the employer’s control that is visited by applicants. Copies of the notice must be sent to each labor union or representative of workers that has a collective bargaining agreement or other agreement applicable to employees in Los Angeles.

Employers are required to maintain all records and documents related to an individual’s application for employment, including any written assessments and re-assessments for a period of three years after the receipt of the job application.

As with other “ban-the-box” legislation, the LAFCIH makes it unlawful for an employer to retaliate or otherwise take adverse action against an individual who has complained about the employer’s non-compliance or anticipated non-compliance; opposed any practice made unlawful by the ordinance; participated in any proceedings related to enforcement of the law, or otherwise sought to enforce or assert his/her rights under the LAFCIH.

The LAFCIH does not apply in the following circumstances: (1) when the employer is required by law to obtain information regarding an applicant’s criminal convictions; (2) when the applicant will be required to possess or use a firearm in the course of his/her employment; (3) when the applicant is prohibited by law from holding the position sought due to a conviction, regardless of whether the conviction has been expunged, sealed, eradicated, or dismissed; or (4) when the employer is prohibited by law from hiring an applicant who has been convicted of a crime.

With this new ordinance, Los Angeles joins the fast-growing list of localities (Austin, Baltimore, Buffalo, Chicago, Columbia (MO), the District of Columbia, Montgomery County (MD), New York City, Philadelphia, Portland, Prince George’s County (MD), Rochester, San Francisco, and Seattle) and nine states (Connecticut, Hawaii, Illinois, Massachusetts, Minnesota, New Jersey, Oregon, Rhode Island, and Vermont) that have enacted similar laws for private employers.

Companies covered by the LAFCIH should immediately review and revise, if applicable, their applications, offer letters, background check forms, and notices, and ensure that their employment screening policies incorporate the ordinance’s pre-adverse and adverse action procedures and documentation, and record keeping requirements.

Since “ban-the-box” legislation is gaining momentum at a rapid pace, all nationwide employers may want to conduct an assessment of their employment screening practices to ensure their compliance with applicable laws and regulations.