What California Employers Must Know About Background Checks (For 2025)

As a business or employer, one of the most valuable tools available to you during the hiring process is background checks. However, in California, background checks are governed by strict laws (both state and federal) that you must comply with. A single error can lead to serious legal consequences. In this article, we share what you need to know as a business or employer in California about background checks in 2025.

What Is a Background Check?

In the employment law context, a background check is when an employer looks into an individual’s history to verify details about them. Usually, background checks involve reviewing a person’s;

• Education
• Employment history
• Criminal history
• Professional licenses
• Credit history

Put another way, a background check is a way for you, as an employer, to learn more about someone before trusting them with a job. Employers across the state use these screenings to make informed hiring decisions.

Some of the most common reasons employers in California conduct background checks include;

• Ensuring workplace safety
• Supporting fair hiring practices
• Lowering negligent hiring risks
• Building trust with clients
• Protecting corporate reputation

California’s “Ban the Box” Law

One of the most vital laws you need to understand in regards to background checks is the California Fair Chance Act (Government Code section 12952), also called the “Ban the Box” law, which went into effect at the beginning of 2018. This law, which applies to employers with at least five employees, prohibits you from asking about an applicant’s criminal record before extending a conditional job offer.

After you have made a conditional offer, you are allowed to perform a criminal background check. However, if you discover an applicant’s criminal record, you must;

• Conduct an individualized evaluation that considers the nature and severity of the offense, the time that has passed since it happened, and its relevance to the position.
• Provide written notice if you intend to rescind the offer, along with a copy of the report.
• Allow the applicant at least five business days to respond to the notice.

It is vital to note that some cities, like Los Angeles and San Francisco, have their own Fair Chance ordinances with additional requirements. You must comply with both state and any local rules.

Also note that under California law, you cannot consider certain records, even if they appear on a criminal background check, including the following;

• Juvenile records
• Arrests that did not result in a conviction
• Marijuana possession convictions over two years old
• Sealed, expunged, or dismissed convictions

Failure to abide by the rules can result in discrimination claims.

The Federal Fair Credit Reporting Act (FCRA)

The FCRA applies to you if you use a third-party background screening service. According to this law, you must;

• Obtain permission from applicants to conduct background checks
• Provide notice if you plan to use the applicant’s friends, neighbors, or associates as character references
• Notify the applicant if you use the information you gather to make an adverse hiring decision

California’s Credit Report Restrictions

According to California Labor Code section 1024.5(a), you can only use a consumer credit report for employment purposes for positions that fall under certain exceptions, including;

• Managerial positions
• Positions with regular access to $10,000 or more in cash
• Law enforcement jobs
• Positions that require disclosing confidential financial information

Contact an Employment Law Attorney

If you have questions or need help complying with the law, contact an experienced employment attorney at SAC Attorneys LLP.