On December 9, Los Angeles Mayor Eric Garcetti signed the “Fair Chance Initiative” into law. The new law, also referred to as the “Ban the Box” ordinance, restricts employers in the City of Los Angeles from asking job applicants about criminal convictions until after a conditional offer of employment has been made. Although some exceptions apply in fields such as law enforcement and child care, the ordinance will affect all city contractors and private employers with 10 or more employees who perform at least two hours of work on average each week within the geographic boundaries of the City of Los Angeles.

The new ordinance will be codified as Article 9 to Chapter 18 of the Los Angeles Municipal Code. According to the text of the new law, employers will no longer be permitted to include any questions on job applications that seek disclosure of an applicant’s criminal history, nor can employers ask any questions about criminal history during the job interview process.

An employer may only inquire about an applicant’s criminal history after a conditional offer of employment has been made and is conditioned only on the results of the criminal background check.  An employer will not be permitted to take any adverse action, such as withdrawing the offer, based upon an applicant’s criminal history unless the employer first performs a written assessment that effectively links the specific aspects of the criminal history with the risks inherent in the duties of the employment position.

The ordinance requires that an employer conducting the written assessment must, at a minimum, consider the factors set forth by the U.S. Equal Employment Opportunity Commission, such as (i) the nature of the offense; (ii) the individual’s age at the time of the offense; (iii) circumstances surrounding the offense; (iv) the number of offenses for which the individual has been convicted; (v) employment history before and after conviction; (vi) evidence of rehabilitation; (vii) time that has elapsed since the offense, and other mitigating factors.  Employers must also apply other factors as may be required by rules and guidance issued by the Department of Public Works, Bureau of Contract Administration, which bears administrative responsibilities for this ordinance.

In the event the employer elects to take an adverse action after undertaking a written assessment, the employer will first be required to provide an applicant with a “Fair Chance Process.” This process gives the applicant an opportunity to provide information regarding the accuracy of the criminal history or any other information, such as evidence of rehabilitation or mitigation, that should be considered in the employer’s written assessment. Employers also will be required to post notices regarding the new ordinance and state in all solicitations or advertisements seeking applicants that the employer will consider for employment qualified applicants with criminal histories in accordance with the new ordinance.

Penalties for violating the ordinance will begin issuing on July 1, 2017. Prior to that date, written warnings will issue to employers that violate the law. Penalties for violation of the ordinance (apart from its notice and record retention requirements) will be up to a $500 fine for the first violation, up to $1,000 for the second violation, and up to $2,000 for each subsequent violation. Violations of the notice and record retention requirements will result in fines of up to $500 for each violation.

Los Angeles employers should immediately examine their employment applications, job advertisements, and relevant employment forms and record retention policies in order to ensure immediate compliance with the new ordinance.