Effective August 10, 2026, San Francisco has expanded its Fair Chance Ordinance (FCO) to prohibit employers from considering certain types of out-of-state convictions and unresolved arrests, while also doubling penalties for violations.
The San Francisco Office of Labor Standards Enforcement (OLSE) enforces its FCO, and more ordinance information can be found on the FCO website.
San Francisco’s FCO is a “ban-the-box” law enacted to limit the use of criminal history in hiring and employment practices. Similar to existing state law, the FCO prohibits employers from asking about criminal history on job applications and considering certain types of criminal history in any employment decisions until after a conditional offer of employment is made. It also prohibits employers from considering certain types of arrest and conviction records.
Who Is Covered
San Francisco’s FCO applies to employers located or doing business in San Francisco who employ five or more employees (regardless of location), including temporary or job placement agencies, referral agencies and other agencies.
It applies to employees and applicants who perform or would be expected to perform an average of eight hours of work per week in San Francisco, including those who work remotely from a location in San Francisco.
Employers May Not Consider Out-of-State Convictions, Unresolved Arrests
San Francisco’s amended FCO now prohibits employers from inquiring about, considering or relying on out-of-state convictions or unresolved arrests for conduct that is lawful in California, including:
- Abortion-related healthcare;
- Drag performances;
- Gender-affirming care; and
- Spontaneous abortion/miscarriage.
Previously, the ordinance gave employers some latitude to assess whether an applicant’s criminal history had a direct impact on their capacity to fulfill their job duties. Under the amended FCO, the above categories are now off-limits and must not be relied upon at any point during the hiring process or employment relationship.
Existing Requirements Remaining in Effect
Even for criminal history that is not off-limits, the FCO limits employers on how they can use the information. Employers must conduct an individualized assessment of the applicant’s or employee’s criminal history and consider the following:
- Only “directly related” convictions;
- The amount of time that has elapsed since the conviction or unresolved arrest;
- Evidence of inaccuracy;
- Evidence of rehabilitation; and
- Other mitigating factors.
Before taking adverse action against an applicant or employee based on their criminal background (e.g., declining to hire, disciplining or terminating an employee), an employer must:
- Provide the applicant/employee with a copy of the background check report (if any); and
- Notify the applicant/employee of the proposed adverse action and the specific items that form the basis for the proposed adverse action.
The applicant/employee has the right to present information that the conviction history is inaccurate or provide evidence of rehabilitation or mitigating factors.
New Procedural Requirements
If the applicant/employee provides evidence that the conviction history is inaccurate or presents rehabilitation or mitigating factors evidence, employers must provide confirmation of receipt to the applicant/employee within 14 days.
In addition, if the applicant/employee makes a reasonable factual showing that the proposed adverse action is based solely on a conviction that is not a directly related conviction, an employer is required to withdraw the adverse action.
Increased Violation Penalties
FCO violations occur when an employer improperly considers an off-limits conviction or arrest in an employment decision, or when an employer fails to conduct an individualized assessment of the conviction history before taking adverse action. The amended FCO also increases the penalty for violations. For a first violation, the administrative penalty increased from $500 to $1,000 for each employee or applicant whose rights were violated. For a second violation, the penalty went up from $1,000 to $2,000 per affected employee or applicant. And for any additional violations, the penalty increased from up to $2,000 to up to $4,000 for each subsequent violation.
San Francisco’s FCO is more protective than California’s Fair Chance Act. When considering criminal history in employment decisions, employers should take care to ensure compliance with San Francisco’s FCO as well as state law.
Shannon Claire, J.D., Employment Law Expert, CalChamber
CalChamber members can read more about San Francisco’s Fair Chance Ordinance and Restrictions on Obtaining Criminal History in the HR Library. Not a member? Learn how to power your business with a CalChamber membership.
