California Background Check Laws: Fair Chance Act and FCRA

California background check laws restrict when an employer can ask about your criminal history, which records they can look at, how far back a report can reach, and what steps they must take before rejecting you because of a conviction. Two state statutes do most of the work: the Fair Chance Act in Government Code section 12952 and the Investigative Consumer Reporting Agencies Act (ICRAA) in Civil Code sections 1786.10 through 1786.40. The federal Fair Credit Reporting Act applies on top whenever an outside agency runs the report.

When an Employer Can Ask About Your Criminal History

No criminal history questions until after a conditional job offer. Under the Fair Chance Act, a covered employer cannot put conviction questions on the application, ask about convictions in an interview, or run a background check before extending a conditional offer.¹ The offer must be a real commitment to hire, contingent only on the background check results or other specified pre-employment conditions.

The point of this “ban the box” timing is to force employers to evaluate your skills and experience first. Violating it is an unlawful employment practice under the Fair Employment and Housing Act, and the Civil Rights Department (CRD) handles complaints.²

Which Employers Are Covered

The Fair Chance Act applies to every California employer with five or more employees.¹ Businesses with four or fewer workers fall outside this particular statute, but other California laws restricting the use of arrest and diversion records apply regardless of employer size.

Some positions are exempt. Section 12952(d) carves out jobs where another law requires a criminal background check, including law enforcement roles, positions at criminal justice agencies, and jobs at state-licensed facilities where a background check is a licensing condition. For those roles, an employer can ask about criminal history earlier in the process.

Records an Employer Cannot Consider

Even after a conditional offer, California limits which parts of your record an employer can look at. Section 12952(a)(3) prohibits considering, distributing, or using:

Arrests that did not lead to conviction, with narrow exceptions under Labor Code section 432.7
Participation in a pretrial or posttrial diversion program
Convictions that were sealed, dismissed, expunged, or pardoned, including dismissals under Penal Code section 1203.4

Labor Code section 432.7 reinforces those protections and applies to every California employer regardless of size. It prohibits asking about or using arrest records with no conviction, diversion participation, dismissed or sealed convictions, and juvenile court records, and it bars employers from seeking that information from any outside source.³ Labor Code section 432.8 separately restricts inquiries into marijuana convictions more than two years old.

A conviction dismissed under Penal Code 1203.4 will still show up on a background check, but marked as dismissed. The record isn’t hidden; the employer is simply prohibited from using it against you.

How Far Back a Background Check Can Reach

Civil Code section 1786.18 caps the reporting window. An investigative consumer reporting agency generally cannot report a criminal conviction if the date of disposition, release, or parole is more than seven years before the report date.⁴ Arrests that never led to conviction also cannot appear, except during the narrow window while a case is still pending judgment.

Two exceptions let older records through: reports used for underwriting life insurance policies of $250,000 or more, and positions where a government regulatory agency specifically requires a check for records that would otherwise be excluded.⁵

Disclosure and Authorization Before the Check

Before an employer orders an investigative consumer report on you, Civil Code section 1786.16 requires a written disclosure that is clear, conspicuous, and presented in a standalone document. It cannot be buried in a job application, employee handbook, or other form.⁶

You have to give written authorization before the check moves forward. The disclosure must also include a checkbox letting you request a copy of the completed report; if you check it, the employer or reporting agency has three business days from receiving the report to send you a copy.

Employers trip over these requirements often. Missing the standalone document, bundling the disclosure with other paperwork, or leaving out the checkbox can each trigger the greater of actual damages or $10,000 in statutory damages, plus attorney’s fees, under Civil Code section 1786.50.⁷

If a Conviction Turns Up: The Individualized Assessment

When a background check reveals a conviction and the employer is thinking about withdrawing the offer, automatic rejection is not allowed. Government Code section 12952 requires an individualized assessment that ties your specific conviction history to the specific duties of the job. The employer must weigh three factors:

The nature and gravity of the offense
The time that has passed since the offense or completion of the sentence
The nature of the job you were offered

Those three factors come from section 12952(c)(1)(A) and track the EEOC’s “Green factors” from federal enforcement guidance, which uses the same test to judge whether a criminal history exclusion is job-related and consistent with business necessity.⁸ The employer may document the assessment in writing but is not required to. Blanket policies that disqualify anyone with a conviction, without this case-by-case review, will not survive a challenge.

The Pre-Adverse and Final Adverse Action Process

If the individualized assessment points toward pulling the offer, the employer has to follow a two-step notice process before making the decision final.

Pre-Adverse Action Notice

The first step is a written notice describing the preliminary decision. It must identify the specific conviction or convictions behind the decision, include a copy of the conviction history report if one was used, and explain your right to respond before the decision is final, including the response deadline. The notice must tell you that your response can include evidence disputing the accuracy of the report, evidence of rehabilitation or mitigating circumstances, or both.¹

Your Response Window

You get at least five business days to respond after receiving the pre-adverse action notice. If within that window you notify the employer in writing that you are disputing the accuracy of the conviction report and are taking specific steps to gather supporting evidence, you get an additional five business days on top of the original period. A vague objection is not enough; the notice has to be in writing and describe the concrete steps you are taking.

Final Adverse Action Notice

If the employer considers your response and still decides to withdraw the offer, they must send a final written notice explaining the decision and informing you of your right to file a complaint with the Civil Rights Department, along with any internal grievance procedures. The CRD accepts complaints filed within three years of the violation.²

How Federal FCRA Rules Fit In

California’s ICRAA does not replace federal law. Whenever an employer uses a third-party agency to run a background check, the federal Fair Credit Reporting Act applies alongside the state statutes, and the stricter standard controls. The FCRA requires a standalone written disclosure and written authorization before the report is obtained, and the employer has to certify to the reporting agency that it has complied with those requirements and will follow adverse action procedures.⁹ Before taking adverse action based on the report, the FCRA separately requires the employer to give you a copy of the report and a written summary of your rights under federal law.¹⁰ That federal step runs parallel to California’s pre-adverse action notice; skipping either creates liability under both systems.

What You Can Recover If an Employer Violates the Rules

Remedies depend on which statute was broken.

An ICRAA violation under section 1786.50 exposes the employer or reporting agency to the greater of actual damages or $10,000 per violation, plus attorney’s fees and costs. That floor makes even a single procedural error expensive, especially when several applicants are affected.

Labor Code section 432.7 provides lower statutory damages but adds a criminal element. An applicant can recover actual damages or $200, whichever is greater, plus attorney’s fees. Intentional violations increase that to treble actual damages or $500, and the employer also faces misdemeanor charges punishable by a fine of up to $500.³

Fair Chance Act violations fall under the Fair Employment and Housing Act. Successful complainants can recover lost wages, emotional distress damages, and attorney’s fees, and the CRD can impose civil penalties that scale with employer size and prior violations.² If you believe an employer broke one of these rules, a written complaint to the CRD within three years is the starting point.

1
California Legislative Information. California Government Code 12952
2
Civil Rights Department. Fair Chance Act: Criminal History and Employment
3
California Legislative Information. California Labor Code 432.7
4
California Legislative Information. California Code Civil Code 1786.18
5
California Legislative Information. California Civil Code 1786.18
6
California Legislative Information. California Code Civil Code 1786.16
7
California Legislative Information. California Code Civil Code 1786.50
8
U.S. Equal Employment Opportunity Commission. Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act
9
Federal Trade Commission. Fair Credit Reporting Act
10
Office of the Law Revision Counsel. 15 U.S. Code 1681b – Permissible Purposes of Consumer Reports