By Ryan Danz, Founding Attorney, Employer Guidance Group PC
Disclaimer: This article is general information about California law — not legal advice, and not a substitute for having counsel review your specific policies. Reading it does not create an attorney-client relationship. Employment law changes frequently; consult a licensed California employment attorney about your situation before acting.
A background check can go wrong for a California employer without anything wrong in the report. The trouble is paperwork and sequence: a disclosure form with one extra sentence on it, a conviction question asked a week too early, an offer pulled the same afternoon the report arrived. The applicant does not need to show they lost a job because of it. Under California's investigative consumer reporting statute, a violation can carry a $10,000 recovery per person even with no proven harm.
The fix is not to stop screening. It is to run the steps in the right order, every time.
Three laws govern one background check
One report from a screening company can trigger three statutes at once. In Connor v. First Student, Inc. (Cal. Supreme Court, No. S229428, Aug. 20, 2018), the court held that a report covering criminal records and other character information is an investigative consumer report under state law, and that employers must follow every statute that applies, even where they overlap.
| Law | What it controls | Key requirement |
|---|---|---|
| Federal Fair Credit Reporting Act, 15 U.S.C. § 1681b | Disclosure, authorization, and pre-adverse action notice | The disclosure must be in a document that contains nothing but the disclosure |
| Investigative Consumer Reporting Agencies Act (ICRAA), Civ. Code § 1786 et seq. | California-specific disclosure contents and the right to a copy | A checkbox to request a copy, and sending that copy within three business days |
| Fair Chance Act, Gov. Code § 12952 | When and how conviction history may be used | No conviction inquiry before a conditional offer, and a written two-notice process before withdrawing it |
Step 1: No conviction questions until after a conditional offer
If you have five or more employees, the Fair Chance Act bars you from asking about conviction history on a job application, or from asking about or considering it in any other way, until you have made a conditional offer of employment. That reaches interview questions, not just the application form.
Some information stays off limits even after the offer. You may not consider or pass along arrests that did not lead to a conviction, participation in a diversion program, or convictions that were sealed, dismissed, expunged, or pardoned.
Narrow exceptions exist, mainly for jobs where another law requires a criminal history check. Confirm one applies before relying on it. Local ordinances can add requirements on top.
Step 2: The standalone disclosure and written authorization
Before you order the report, the applicant must get a written disclosure and sign a written authorization. Federal law requires the disclosure to sit in a document that consists solely of the disclosure. Keep liability waivers and at-will acknowledgments off that page.
California adds content requirements under Civ. Code § 1786.16. The disclosure must tell the applicant:
- that an investigative consumer report may be obtained, and why;
- that it may cover character, general reputation, personal characteristics, and mode of living;
- the screening company's name, address, and phone number;
- the nature and scope of the investigation, with a summary of the applicant's inspection rights; and
- where to find the screening company's privacy practices.
You must also offer a box to check for a copy of the report. If it is checked, the copy goes out within three business days after you receive the report.
Step 3: The individualized assessment
If the report shows a conviction you may hold against the applicant, the Fair Chance Act requires an individualized assessment before you decide. The question is whether the conviction has a direct and adverse relationship to the specific duties of the job. You must weigh:
- the nature and gravity of the offense;
- the time that has passed since the offense and since the sentence was completed; and
- the nature of the job.
The statute does not require a written assessment. Write it down anyway; it shows a person, not a blanket policy, made the call.
Step 4: The preliminary notice and the waiting period
If the assessment points toward withdrawing the offer, send a preliminary notice first.
| What happens | Deadline or requirement |
|---|---|
| Preliminary notice sent | Must identify the disqualifying conviction, include a copy of the conviction history report, and explain the right to respond |
| Applicant's time to respond | At least 5 business days |
| Applicant disputes the report's accuracy and is taking steps to get evidence | 5 additional business days |
| Your obligation before deciding | Consider whatever the applicant submits |
Federal law separately requires that, before any adverse action based in whole or in part on a consumer report, you give the applicant a copy of the report and a written description of their federal rights. ICRAA has its own adverse-action provision as well. One notice packet can be drafted to address all three statutes, but only if it is built for that.
Step 5: The final notice
If you still decide to withdraw the offer, the decision must be in writing. It must state the final denial, any procedure you have for challenging it or requesting reconsideration, and the applicant's right to file a complaint with the California Civil Rights Department.
Where the exposure comes from
Under Civ. Code § 1786.50, an employer that violates ICRAA owes the applicant the greater of actual damages or $10,000, plus costs and reasonable attorney's fees. Punitive damages are available if the violation was grossly negligent or willful. The statute treats the $10,000 figure differently in class actions.
In Yeh v. Barrington Pacific, LLC (Cal. Ct. App., 2d Dist., Div. 3, No. B337904, Jan. 21, 2026), a published decision arising from tenant screening rather than hiring, the Court of Appeal held that a plaintiff can sue under ICRAA without proving actual damages.
Fair Chance Act violations go to the Civil Rights Department.
The steps below are general information, not legal advice. Have counsel tailor them to your workforce and practices before you act.
Your background check compliance checklist
- Strip conviction-history questions from applications and pre-offer interviews.
- Run no criminal check before a conditional offer.
- Put the federal disclosure on its own page.
- Add every ICRAA item and the copy checkbox to the California disclosure.
- Name someone to send requested copies within three business days.
- Use a written individualized assessment form built on the three factors.
- Build one preliminary notice packet covering all three statutes, and calendar the 5-plus-5 business-day window.
- Use a written final notice, and check for a local fair chance ordinance.
Our guide to California personnel file requests covers what employees can later ask to see, and if your company is based outside California, start with which California laws apply to your California employees.
Get your hiring process reviewed
Forms and sequence can be fixed before anyone files a claim. Employer Guidance Group can audit your hiring and screening documents against all three statutes. If you have already received a demand letter, contact us.
Disclaimer
This article is general information about California law. It is not legal advice, and reading it does not create an attorney-client relationship. Employer Guidance Group PC is not your attorney unless and until you have signed a written engagement agreement with the firm.
California employment law changes constantly. The information here may be incomplete, out of date, unverified, or incorrect, and it does not account for your specific facts — and outcomes turn on facts. Do not act, or refrain from acting, on the basis of this article. Consult a licensed attorney about your own situation before making any employment decision.
This communication may constitute attorney advertising. Prior results do not guarantee a similar outcome.