San Francisco tightened its Fair Chance Ordinance on August 10, 2026, adding new protected categories and firm response deadlines, and doubling its administrative penalties. Most Inland Empire employers will never hire someone to work in San Francisco, so it’s tempting to skip the news. That would be a mistake, because the San Francisco changes are a good prompt to check compliance with the rules that do apply in Riverside and San Bernardino counties: the statewide Fair Chance Act, California’s background check reporting statutes, and, for companies whose drivers or technicians spend time in unincorporated Los Angeles County, one of the strictest local ordinances in the state. State enforcement is active. In July 2026, the Civil Rights Department announced a $200,000 settlement with Ralphs resolving its first Fair Chance Act lawsuit.
What does California’s Fair Chance Act require of every employer with five or more employees?
Government Code § 12952 bars employers with five or more employees from asking about conviction history, or considering it, until after a conditional offer. Even then, some records are off limits entirely: arrests that didn’t lead to a conviction, participation in diversion programs, and convictions that have been sealed, dismissed, or expunged. Labor Code § 432.7 separately prohibits using those records and allows the greater of actual damages or $200 per violation, or the greater of treble damages or $500 for intentional violations, plus attorney’s fees. Under Labor Code § 432.8, misdemeanor marijuana possession convictions more than two years old are also out.
If an employer wants to rescind an offer because of a conviction, it must first make an individualized assessment of whether the conviction has a direct and adverse relationship with the specific duties of the job, considering the nature and gravity of the offense, the time that has passed since the offense and the completion of the sentence, and the nature of the job. It then sends a preliminary notice identifying the conviction and including a copy of any report, and it gives the applicant at least five business days to respond, with five more if the applicant disputes the record and is gathering evidence. The final decision must be in writing and must explain any internal appeal process and the right to file a complaint with the Civil Rights Department. The department’s sample Fair Chance Act forms are a practical starting point.
What did the 2023 regulations add?
The Civil Rights Council’s amended regulation, Cal. Code Regs., tit. 2, § 11017.1, took effect October 1, 2023, and it’s where many employers get caught. Job postings can’t say “no felons” or “must have a clean record.” Employers can’t use a background check or an internet search to learn about conviction history before making an offer. Evidence of rehabilitation is something the applicant may offer, not something the employer may require. Policies that automatically disqualify people for convictions seven or more years old are subject to a rebuttable presumption that they aren’t tailored enough. And the definition of “employer” reaches staffing agencies and the businesses that take workers from them, while “applicant” includes someone who’s already started work under a conditional offer. For a Moreno Valley fulfillment center that brings in seasonal workers through an agency, both companies can be responsible for getting the process right.
Do local ordinances add stricter rules near the Inland Empire?
Yes, and the one that matters most isn’t San Francisco. The Los Angeles County Fair Chance Ordinance for Employers, effective September 3, 2024, covers employers with five or more employees that do business in unincorporated Los Angeles County, for workers who average at least two hours of work a week there, including remote work. It bars considering most convictions more than seven years old, with exceptions for jobs involving minors, dependent adults, people 65 or older, and public funds. It requires written assessments before and after the applicant’s response, and it authorizes penalties of up to $5,000, $10,000, and $20,000 per affected person for successive violations. An Ontario distributor whose merchandisers regularly service stores in unincorporated areas like East Los Angeles or Hacienda Heights should assume it’s covered. The City of Los Angeles has its own ordinance for employers with ten or more employees.
San Francisco’s ordinance applies to employers with five or more employees for jobs involving at least eight hours of work a week in the city. According to published summaries of the August 2026 amendments, they bar reliance on out-of-state arrests or convictions for conduct that’s lawful in California involving abortion care, miscarriage, gender-affirming care, and drag performance. They also require the employer to confirm an applicant’s response in writing within 14 days and to send the final notice within 30 days, and they raise administrative penalties to $1,000 for a first violation, $2,000 for a second, and $4,000 for each one after that. The city’s Fair Chance Ordinance page covers the basics, and its August 2026 poster reflects the update.
| Rule | California (statewide) | Unincorporated LA County | San Francisco |
|---|---|---|---|
| Employers covered | 5 or more employees | 5 or more employees; workers averaging 2+ hours a week in the area | 5 or more employees; jobs with 8+ hours a week in the city |
| Conviction inquiry timing | After conditional offer | After conditional offer | After conditional offer |
| Older convictions | Blanket 7-year-plus exclusions presumed overbroad | Convictions over 7 years generally can’t be considered | Convictions over 7 years generally can’t be considered |
| Applicant response time | At least 5 business days, plus 5 if disputing | 5 business days, plus 10 in some cases | 7 days; employer confirms receipt within 14 days |
| Final notice | Written, with appeal and CRD complaint rights | Written second assessment and final notice | Within 30 days of response, or of preliminary notice if no response |
| Penalties | FEHA remedies; CRD enforcement | Up to $5,000 / $10,000 / $20,000 per person | $1,000 / $2,000 / $4,000 administrative penalties |
What can a background check company legally report in California?
Less than federal law allows. The Fair Credit Reporting Act lets consumer reporting agencies report convictions indefinitely, but California’s Investigative Consumer Reporting Agencies Act, Civil Code § 1786.18(a)(7), bars reporting convictions whose date of disposition, release, or parole is more than seven years before the report. Before ordering a report, the employer must give a stand-alone disclosure identifying the screening company and the scope of the investigation, with a box the applicant can check to receive a copy, which is due within three business days under § 1786.16. The federal requirements in 15 U.S.C. § 1681b(b) run alongside: a separate disclosure and written authorization before the check, and a copy of the report plus the federal summary of rights before any adverse action.
Two more statutes trip up hiring managers. Labor Code § 1024.5 limits credit reports to specific positions, such as managers and jobs with access to large amounts of cash or confidential financial data, so a warehouse picker isn’t a lawful credit check position. And Government Code § 12954, effective since January 1, 2024, generally bars decisions based on off-duty cannabis use or on drug tests that detect only nonpsychoactive cannabis metabolites, and bars asking applicants about past cannabis use, with exceptions for construction trades and jobs requiring federal background checks.
What does a compliant hiring decision look like in practice?
Suppose a Moreno Valley fulfillment center, working through a staffing agency, extends conditional offers to 60 seasonal pickers and packers. The job postings say nothing about criminal records, and the offers go out before any screening begins. Each candidate then signs the federal disclosure and authorization and the separate California disclosure. One candidate’s report shows a 2019 Nevada misdemeanor petty theft conviction; the case was resolved in March 2019 and probation ended in March 2020.
The first question is whether the screening company should have reported it at all. Counted from the March 2019 disposition, the conviction falls outside California’s seven-year window in 2026. Counted from the end of probation, it doesn’t until March 2027. The statute doesn’t clearly say which date controls when a sentence includes probation, so the employer should ask how its vendor applies the rule. If the conviction is properly on the report, the assessment comes next. Theft has some relationship to a job handling merchandise, but the offense was a misdemeanor, it’s more than seven years old, and the candidate has worked steadily since. A blanket rule screening out this candidate would run into the regulation’s presumption against policies built on older convictions, and an individualized assessment on these facts points away from rescinding the offer. If the employer still has concerns, it sends a combined state and federal preliminary notice with the report and summary of rights, waits at least five business days for a response, considers anything the candidate submits, and documents its final reasoning. Everything goes in a file kept for four years.
Enforcement makes the paperwork worth doing. In June 2026, the Civil Rights Department announced a $93,000 resolution with the City of Signal Hill over a withdrawn offer based on older, unrelated convictions without an individualized assessment. The Ralphs settlement in July added years of reporting obligations on top of the payment. A bill to expand the state law, AB 2095, was reportedly moved to the Assembly’s inactive file in May 2026, but the current rules already give the department plenty to enforce.
Hiring updates rarely happen one at a time. Employers revising offer letters this year should also check their sign-on bonus terms under the new stay-or-pay law and budget for the 2027 minimum wage and exempt salary increase.
Frequently Asked Questions
Can a California employer ask about criminal history on a job application?
No. Employers with five or more employees can’t ask about or consider conviction history until after making a conditional job offer, and some records, like arrests without conviction, can never be considered.
How long does an applicant have to respond to a preliminary notice?
At least five business days under state law, plus five more if the applicant disputes the record and is obtaining evidence. Local ordinances in Los Angeles County and San Francisco set their own timelines.
Can a background check in California include convictions older than seven years?
Generally no. California law bars screening companies from reporting convictions dated more than seven years from disposition, release, or parole, which is stricter than federal law.
Does the Los Angeles County Fair Chance Ordinance apply to Inland Empire companies?
It can. It covers employers with five or more employees for workers averaging at least two hours a week in unincorporated Los Angeles County, even if the company is based elsewhere.
Is a staffing agency or its client responsible for Fair Chance compliance?
Potentially both. California’s regulation includes staffing agencies and the businesses that obtain workers from them within the definition of employer, so contracts should assign who does the assessment and sends notices.
What changed in San Francisco’s Fair Chance Ordinance in August 2026?
It added protection for out-of-state records involving conduct lawful in California, such as abortion and gender-affirming care, set 14-day and 30-day employer deadlines, and doubled administrative penalties.
How North Star Law Firm Can Help
North Star Law Firm helps California employers update hiring forms, staffing agency agreements, and background check workflows so they match state and local Fair Chance rules. The firm’s business and contract law practice covers the vendor and staffing contracts that decide who’s responsible when a notice is missed, and its contract drafting and review service handles offer letters and screening authorizations. Phillip Zagotti is a California attorney and a CPA who works with Inland Empire and Sacramento businesses on the legal and financial sides of growth. Employers preparing for seasonal hiring can schedule a consultation.