California Employment Screening Overview
California has a highly restrictive employment screening environment with comprehensive ban-the-box rules requiring individualized assessments before rescinding job offers, strict limits on salary history inquiries, significant restrictions on credit checks and drug testing (including cannabis protections), and automatic criminal record sealing under clean slate laws.
Employers face detailed procedural requirements at nearly every stage of the hiring process, with substantial penalties for violations enforced by the California Civil Rights Department and Labor Commissioner—federal requirements and local ordinances in cities like San Francisco and Los Angeles may add further obligations.
What's Permitted
- Criminal history inquiries permitted only after conditional job offer (5+ employees)
- Credit checks allowed for managerial, law enforcement, and financial-responsibility positions
- Pre-employment drug testing generally permitted for safety-sensitive positions only
- E-Verify use permitted only after a formal job offer is extended
What's Prohibited
- Asking about criminal history before a conditional job offer, for most employers
- Using non-psychoactive cannabis metabolites in pre-employment drug screening decisions
- Requesting salary history from job applicants before extending an offer
- Running credit checks except for specifically exempt positions like managerial roles
Ban the Box Laws
StatewideStatus Summary
California’s Fair Chance Act (Gov. Code §12952) prohibits pre-offer conviction inquiries, requires individualized assessments and notices; strengthened by 10/1/2023 regulations. San Francisco imposes stricter limits; L.A. County exploring enhanced enforcement. See CRD overview, FAQ, forms, and LA County report.
Key Requirements
California Fair Chance Act (Gov. Code §12952)
State law restricting criminal-history inquiries until conditional offers: https://calcivilrights.ca.gov/fair-chance-act/ https://calcivilrights.ca.gov/wp-content/uploads/s...
- Applies to employers with five+ employees
- No conviction questions before conditional offer
- Individualized assessment before rescinding offers
- Written notice plus copy of report
- At least five business days to respond
San Francisco Fair Chance Ordinance
Local ordinance providing stricter fair-chance protections: https://calcivilrights.ca.gov/fair-chance-act/
- Applies to employers with five+ employees
- No criminal questions before first live interview
- Bars convictions older than seven years
- Excludes infractions and decriminalized convictions
Los Angeles County Fair Chance Provisions
County measures to strengthen enforcement and penalties: https://file.lacounty.gov/SDSInter/bos/supdocs/165...
- Require individualized nexus assessments
- Require written rescission explanations
- Establish response timelines and penalties
- Portion of fines awarded to complainants
Ban the Box Best Practices for California Employers
- Delay criminal-history questions until after conditional job offer.
- Conduct individualized assessment considering offense, time, and job.
- Provide written notice, conviction report copy, and five business days.
- Remove criminal-history questions from applications and job postings.
- Train staff and oversee background-check vendors for compliance.
Salary History Ban
StatewideCalifornia Labor Code §432.3
Statewide ban on seeking or relying on applicant salary history:
- Prohibits seeking applicant salary history
- Prohibits relying on salary history
- Exception for publicly disclosable information
- Must provide pay scale upon request
- 15+ employees: include pay scale postings
Sources: https://www.dir.ca.gov/dlse/Pay-Trans-Instructions... https://www.dir.ca.gov/dlse/california_equal_pay_a...
SB 642 (Pay Equity Enforcement Act)
2024 amendments strengthening pay transparency and limits:
- Limits pay ranges ±10% around mean
- Expands definition of wages covered
- Extends Equal Pay Act statute limitations
- Affects 15+ employee posting requirements
Sources: https://sd21.senate.ca.gov/sites/sd21.senate.ca.go... https://women.ca.gov/nr04-25-sb642-signed/
San Francisco Consideration of Salary History Ordinance
Local ordinance adding stricter employee privacy protections:
- Prohibits asking or considering salary history
- Prohibits disclosing employee salary without consent
- Requires city notice postings at workplaces
- Enforced by SF OLSE; complaint process available
Source: https://www.sf.gov/information--salary-history-ord...
Important Distinction
San Francisco bars employers from disclosing a current or former employee’s salary history to third parties without the employee’s authorization, adding protections beyond the state ban. https://www.sf.gov/information--salary-history-ord... https://www.dir.ca.gov/dlse/Pay-Trans-Instructions...
Salary History Best Practices for California Employers
- Do not ask or solicit applicant salary history information.
- Do not rely on salary history when setting compensation.
- Allow voluntary, unprompted salary disclosures; document them carefully.
- Include pay scale in postings when employer has 15+ employees.
- Maintain wage and wage-rate history for three years.
Consumer Credit Checks
RestrictedCalifornia prohibits employer use of consumer credit reports except eight statutory exceptions; FCRA procedures still apply; civil remedies available (Cal. Civ. Code §1785.31).
Key Requirements
Fair Credit Reporting Act (FCRA)
Federal framework for consumer reports:
- Written disclosure and authorization required
- Provide pre-adverse action notice with report
- Provide final adverse action notice thereafter
- Applies nationwide to consumer reports
California Civil Code §1785.31
Civil remedies and penalties for violations:
- Actual damages for negligent violations
- Punitive damages $100–$5,000 per violation
- Minimum $2,500 for false-pretenses violations
- Injunctive relief and attorney fees
Credit Check Best Practices for California Employers
- Limit credit checks to positions in Labor Code §1024.5 exceptions
- Obtain written FCRA disclosure and signed authorization
- Provide consumer report and FCRA Summary; allow review period
- Document legitimate business basis and retain supporting records
- Follow state and federal procedures; consult counsel for ambiguity
Marijuana Protection
Medicinal Marijuana
California employers may prohibit on-duty possession, use, or impairment, and maintain drug-free workplaces. But they generally cannot take adverse action for off-duty cannabis use or nonpsychoactive metabolite results, except in exempt roles. Gov. Code §12954
Recreational Marijuana
Effective Jan. 1, 2024, employers generally cannot discriminate based on off-duty cannabis use or tests detecting only nonpsychoactive metabolites; exemptions include building/construction trades and certain federally regulated/cleared roles (e.g., DOT, security clearance). Gov. Code §12954
Drug Testing Regulations
California generally restricts workplace drug testing: post‑offer/pre‑employment and reasonable‑suspicion testing permitted; random testing generally prohibited except safety‑sensitive roles. AB 2188 (2024) bars adverse action for non‑psychoactive cannabis metabolites/off‑duty use, with federal/DOT/construction exemptions.
Permitted Testing Types
Pre-Employment
Allowed after conditional offer; cannabis metabolite results limited by law.
Random Testing
Generally prohibited; allowed for federally regulated or safety‑sensitive roles.
Reasonable Suspicion
Allowed when objective facts indicate on-duty impairment; must be documented.
Post Accident
Permitted after incidents; nonpsychoactive cannabis metabolites cannot justify discipline.
Workers' Compensation Discount
No California statute ties workers' compensation premium discounts to employer drug testing, based on the reviewed legislation.
Research did not identify statutory workers' comp discounts; consult insurers or legal counsel for carrier‑specific policies.
Best Practices
- Post-offer testing only; apply uniformly to same position.
- Do not rely on metabolite-based cannabis tests.
- Use impairment or psychoactive-THC tests where appropriate.
- Limit testing to reasonable suspicion or safety-sensitive roles.
- Respect privacy, disability accommodations, and local ordinance requirements.
Clean Slate Laws
StatewideCalifornia: Fair Chance Act (Gov. Code §12952, eff. Jan 1, 2018) bars pre‑offer conviction inquiries; DOJ automatic record‑relief (AB 1076/SB 731) limits dissemination—not expungement; SB 731 enacted Sept 29, 2022, effective Oct 1, 2024. https://calcivilrights.ca.gov/fair-chance-act/ https://oag.ca.gov/fingerprints/automatic-record-r...
E-Verify Requirements
VoluntaryWho Must Use E-Verify
Private Employers [Labor Code §2814 (AB 622); §§1019.1, 1019.2 (SB 1001; SB 112); AB 1236]
May not use E-Verify on current employees or applicants before a formal job offer; post-offer use permitted only if federal law/funding requires it. https://www.dir.ca.gov/DIRNews/2025/2025-52.html https://www.dir.ca.gov/dlse/AB_450_QA.pdf
Federal Contractors [Federal Acquisition Regulation; 8 U.S.C. §1324a]
May be required to use E-Verify when a federal contract or funding condition mandates it; federal requirement can preempt California restrictions. https://www.dir.ca.gov/dlse/AB_450_QA.pdf https://www.congress.gov/bill/119th-congress/house...
Any other relevant groups [Background screening companies; Labor Code §90.2; Labor Code §2814]
Third-party screeners are subject to California limits; employers remain liable for vendor violations; employers must follow 72‑hour I-9 inspection notice requirements. https://www.dir.ca.gov/dlse/howtofilelinkcodesecti... https://www.dir.ca.gov/dlse/LC_90.2_EE_Notice.pdf
Background Check Regulations
Federal FCRA applies, but California imposes additional rules: mandatory written disclosures/authorization, stricter consumer‑reporting protections, limits on asking or using conviction and credit history, required individualized assessments before adverse action, and local ordinances that may add further restrictions.
FCRA Compliance Process
Disclosure & Authorization
Provide clear, standalone written disclosure that a background check will be conducted. Obtain separate written authorization from the applicant before ordering the report.
Obtain Background Report
Order the background check from a Consumer Reporting Agency (CRA). Ensure the CRA is FCRA-compliant and provides accurate, up-to-date information.
Pre-Adverse Action Notice
If considering denying employment based on the report, provide the applicant with:
- Copy of the background report
- Copy of "A Summary of Your Rights Under the FCRA"
- Reasonable time to respond (typically 5 business days)
Adverse Action Notice
If final decision is made to deny employment, provide written notice including:
- Name, address, and phone number of the CRA
- Statement that the CRA did not make the decision
- Notice of right to dispute report accuracy
- Notice of right to request additional free copy within 60 days