San Francisco Expands Fair Chance Ordinance to Protect Certain Out-of-State Criminal Records

San Francisco amended its Fair Chance Ordinance (FCO) to expand employment protections for individuals with certain out-of-state criminal records and impose additional procedural requirements on covered employers, effective August 10, 2026. According to the FCO’s legislative findings, the amendments respond to the growing number of states that have criminalized or imposed penalties for abortion-related healthcare, gender-affirming care, drag performances, and pregnancy-related conduct following the US Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization.

The amendments are intended to ensure that individuals are not adversely affected in employment in San Francisco because of out-of-state arrests or convictions arising from conduct that is lawful in California.

COVERED EMPLOYERS AND EMPLOYEES

The amendments apply to employers covered by San Francisco’s Fair Chance Ordinance. The ordinance defines an “employer” broadly to mean any individual, firm, corporation, partnership, labor organization, group of persons, association, educational institution, nonprofit organization, or business in the city that employs five or more persons, regardless of location, including owners and managers with supervisory responsibilities.

The definition of “employment” remains broad and includes traditional employment relationships as well as temporary or seasonal work, part-time work, contingent work, contracted work, work performed through temporary or other employment agencies, and unpaid work performed through vocational or educational training.

Accordingly, employers should consider whether the amended requirements apply not only to traditional employees, but also independent contractors, contingent workers, and other workers engaged through alternative work arrangements.

NEW PROTECTED CATEGORIES OF OUT-OF-STATE CRIMINAL RECORDS

The amendments prohibit covered employers from inquiring into, considering, or relying upon certain out-of-state convictions and unresolved arrests involving conduct that is lawful in California. Specifically, the ordinance creates four new protected categories:

• Abortion-related healthcare convictions, which is defined as “an out-of-state Conviction or Unresolved Arrest for conduct that is lawful under California law, and has the primary aim of seeking, performing, providing, receiving, or facilitating the services by or of a physician or other medical professional to terminate a pregnancy.”
• Gender-affirming care convictions, which is defined as “an out-of-state Conviction or Unresolved Arrest for conduct that is lawful under California law, and that is related to seeking, performing, providing, receiving, or facilitating medical care, support, or advocacy for the purpose of addressing disparities between a person’s gender identity and their physiology or perceived gender identity, including but not limited to hormone replacement therapy, surgical procedures, and changes to a person’s name or gender marker. This includes a Conviction for use of a gendered facility that corresponds with one’s gender identity and/or playing sports on a team that corresponds with one’s gender identity.”
• Drag-performance-related convictions, which is defined as “an out-of-state Conviction or Unresolved Arrest for conduct that is lawful under California law and that is related to a public, artistic performance characterized by exaggerated displays of femininity or masculinity, in some instances demonstrated by wearing clothing associated with a different gender than the person’s assigned gender at birth.”
• Spontaneous abortion (miscarriage)-related convictions, which is defined as “an out-of-state Conviction or Unresolved Arrest for conduct that is lawful under California law, and is related to actions taken by a person regarding their own noninduced pregnancy loss before 20 weeks of pregnancy, also known as a miscarriage, or seeking, performing, providing, receiving, or facilitating the services by or of a physician or other medical professional related to such type of pregnancy loss. This includes a Conviction for conduct related to a stillbirth, which is a pregnancy loss after 20 weeks of pregnancy”

These records cannot be used as the basis for an adverse decision under the FCO.

EXPANDED PRE-ADVERSE ACTION REQUIREMENTS

The amendments also expand employers’ obligations during the pre-adverse action

If an applicant or employee submits information challenging the accuracy of criminal history or provides evidence regarding rehabilitation or other mitigating circumstances within seven days of receiving a pre-adverse action notice, the employer must acknowledge receipt of that information within 14 days. Previously, employers were required to consider the information, but were not required to confirm receipt of it.

If an applicant or employee makes a reasonable factual showing that the proposed adverse action is based solely on a conviction that is not a “Directly Related Conviction,” the employer must withdraw the proposed adverse action. The ordinance defines a “Directly Related Conviction” as one in which the underlying conduct has a direct and specific negative bearing on the individual's ability to perform the duties and responsibilities of the position.

Employers must also provide any final adverse action notice based on criminal history within 30 days of either receiving information from the applicant or employee in response to the pre-adverse action notice or, if no response is received, within 30 days of issuing the pre-adverse action notice.

INCREASED PENALTIES FOR NONCOMPLIANCE

The amendments increase administrative penalties from up to $500 per violation to up to $1,000 per affected applicant or employee for a first violation, from up to $1,000 to up to $2,000 for a second violation, and up to $2,000 up to $4,000 for each subsequent violation. The amendments also increase liquidated damages available in private civil actions to up to $1,000 per violation. Because these penalties are assessed on a per-applicant or per-employee basis, systemic compliance failures affecting multiple individuals may result in significant aggregate liability, particularly for employers engaged in high-volume hiring.

EXISTING FAIR CHANCE REQUIREMENTS REMAIN UNCHANGED

The amendments do not alter many of the ordinance’s core requirements. Covered employers must continue to adhere to the following:

• Delay criminal history inquiries until after extending a conditional offer of employment.
• Conduct an individualized assessment before taking adverse action based on criminal history.
• Provide required pre-adverse and final adverse action notices.
• Allow a reasonable period to reconsider a proposed adverse action in light of new information submitted by the applicant or employee.
• Comply with existing prohibitions on considering arrests not resulting in conviction (subject to limited exceptions), expunged or dismissed convictions, juvenile matters, convictions older than seven years (subject to limited exceptions), infractions, and convictions based on conduct that has since been decriminalized.

TAKEAWAYS FOR EMPLOYERS

Before the amendments take effect on August 10, 2026, employers who hire in San Francisco should consider taking the following steps:

• Review background screening policies. Ensure policies do not inquire into or rely upon the newly protected categories of out-of-state arrests and convictions.
• Update adverse action procedures. Incorporate the ordinance’s new notice and timing requirements.
• Confirm coverage across worker populations. Ensure compliance processes extend to contingent and contracted workers covered by the ordinance.
• Evaluate existing California compliance processes. Determine whether updates are needed to address San Francisco’s requirements. Many employers already comply with overlapping California state and local fair chance laws, but San Francisco’s amendments impose additional obligations that may require jurisdiction-specific changes.
• Train hiring personnel. Train recruiters, hiring managers, and human resources personnel on the amended requirements before they become effective.
• Monitor aggregate exposure. Administrative penalties and liquidated damages are assessed on a per-applicant or per-employee basis, making systemic compliance issues potentially costly.