City of Los Angeles Adopts Fair Chance Hiring Ordinance

December 21, 2016

The ordinance, which aims to eliminate a barrier to employment for persons who have been convicted of crimes, becomes effective January 22, 2017.

Joining a growing list of states, cities, and municipalities throughout the United States, the City of Los Angeles has adopted the Fair Chance Initiative Ordinance (Ordinance), which restricts employers from asking job applicants about their criminal histories during the application process.


The new Ordinance applies to any private employer located in Los Angeles or doing business in the city that employs 10 or more employees. This includes owners, managers, and supervisors. Job placement, referral agencies, and other employment agencies also must comply with the Ordinance. The City of Los Angeles, local government units, or any unit of the state or federal government are exempt from compliance with the Ordinance.

The Ordinance defines “applicant” broadly as any individual who submits an application or other documentation for employment. Employment includes any occupation, vocation, job, or work performed in Los Angeles, including temporary, seasonal, part-time, contracted, contingent work, work on commission, work through a temporary or other employment agency, or vocational or educational training with or without pay (presumably interns).

Similar to the city’s ordinance regarding paid sick leave, an “employee” is defined by the Ordinance as any individual who performs at least two hours of work on average each week within the city and is entitled to payment of minimum wage under the California minimum wage law.

The Ordinance does not apply to employers that are required by law to obtain information regarding a conviction of an applicant or those that are prohibited from hiring an applicant who has been convicted of a crime. The Ordinance also does not protect individuals who cannot lawfully hold a position because of a criminal conviction—regardless of whether the conviction has been expunged, judicially ordered sealed, statutorily eradicated, or judicially dismissed following probation. Additionally, the Ordinance does not apply to applicants who would be required to possess or use a firearm in the position sought.

Unlawful Hiring Practices

The Ordinance establishes a number of prohibitions during the pre-employment process. Employers are prohibited from including, on any application for employment, any question that seeks the disclosure of an applicant’s criminal history. Employers are further prohibited from inquiring into or seeking, directly or indirectly, an applicant’s criminal history—unless and until a conditional offer of employment has been made. A “conditional offer of employment” is one conditioned only on an assessment of the applicant’s criminal history and the duties and responsibilities of the position. An employer may not, based on an applicant’s criminal history, take adverse action against the applicant to whom a conditional offer of employment has been made, unless the employer performs a written assessment linking the specific aspects of the criminal history to the risks inherent in the duties of the position sought.

The Fair Chance Process

If an employer determines—after a conditional offer has been made and an inquiry into the applicant’s criminal history has occurred—that an adverse employment action is required based on the criminal history, the employer must engage in the “Fair Chance Process.”

The Fair Chance Process gives the applicant an opportunity to provide information regarding the accuracy of the criminal history. The process requires the employer to conduct a written assessment that links the specific aspects of the criminal history to the risks inherent in the duties of the position sought. In performing this assessment, the employer, at a minimum, must also consider the factors identified by the Equal Employment Opportunity Commission (EEOC) and other factors that may be required by rules and guidelines issued by the Designated Administrative Agency responsible for enforcement of the Ordinance, the Department of Public Works, Bureau of Contract Administration (Department).

Such factors identified by the EEOC include

  • the nature and gravity of the offense or conduct;

  • the time that has passed since the offense, conduct, or completion of the criminal sentence; and

  • the nature of the job held or sought.

The applicant must be provided with written notification of the proposed adverse action, a copy of the written assessment, and any other information or documentation supporting the proposed adverse action. Thereafter, the employer must wait five (5) business days to allow the applicant to provide any information or documentation regarding the criminal history and its accuracy. If the applicant provides information or documentation, the employer must consider it and perform a written reassessment of the proposed adverse action. If the employer still decides to take the adverse action, the employee must notify the applicant of its decision and provide a copy of the written reassessment.

While nothing in the Ordinance prohibits an employer from using a consumer reporting agency to conduct applicant background checks, such use does not mean that the employer can rely on the pre-adverse and adverse action requirements of the federal and state Fair Credit Reporting Acts to comply with the Ordinance. Employers should proceed with compliance with federal and state Fair Credit Reporting Act requirements and the Ordinance at the same time.

Notice, Posting, and Recordkeeping

Employers must state, in all solicitations or advertisements seeking applicants for employment, that they will consider qualified applicants with criminal histories in a manner consistent with the requirements of the Ordinance.

Employers must also post a notice that informs applicants of the provisions of the Ordinance, which must be posted in a conspicuous place at every workplace, job site, or other location in Los Angeles that is under the employer’s control and visited by its applicants. A copy of such notice must be sent to each labor union or representative with whom the employer has a collective bargaining agreement. While the form of such notice is not currently available, we presume that the Department will make one available before the January 22, 2017 effective date.

All records and documents related to employment applications and any written assessments and reassessments performed by the employer must be retained by the employer for a period of three years following the receipt of an employment application.


An employer cannot discharge, reduce the compensation of, or take any adverse employment action against an employee for complaining to the City of Los Angeles with regard to the employer’s compliance with the Ordinance, opposing any practice made unlawful by the Ordinance, participating in proceedings related to the Ordinance, or seeking to enforce or assert rights under the Ordinance.

Enforcement and Penalties

The Ordinance allows an applicant or employee to bring a civil action against an employer for violation of the Ordinance. However, the applicant or employee must first report the alleged violation to the Department within one year of the alleged violation. The Department must complete the administrative process, or a hearing officer’s decision must be rendered, before the employee can file suit. The Ordinance requires the Department to issue rules and procedures for the administrative process. These have not yet been established.

Beginning July 1, 2017, the Department can impose penalties and fines against an employer for violations of the Ordinance. The employer may be fined up to $500 for the first violation, up to $1,000 for the second violation, and up to $2,000 for the third and subsequent violations. Prior to July 1, 2017, the Department shall only issue written warnings for violations of the Ordinance—no monetary penalties will be assessed.

Next Steps

Covered Los Angeles employers should review their employment applications and hiring process policies and procedures to ensure compliance with the Ordinance. Employment and job solicitations, both internal and external, must be revised to include information conveying that the employer will consider qualified applicants with criminal histories consistent with the Ordinance. Offer letters should be changed to comply with the Ordinance as well.

All personnel—including managers, supervisors, and human resources personnel—should be trained on the requirements of the Fair Chance Initiative and its application to the interviewing and hiring process. Employers should review all job descriptions to determine the effect, if any, a criminal history may have on available job positions. Finally, employees should develop and implement a process for assessment and reassessment of criminal histories that is separate from any current background or reference checking processes.


If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Los Angeles
Jackie Aguilera
John Battenfeld
Debra Fischer
Barbara Fitzgerald
Harry Johnson
Jason Mills
Seth Sethness