Employment Offer: California
Federal law and guidance on this subject should be reviewed together with this section.
Author: Jennifer K. Achtert, Fisher Phillips
- Employers in California should be careful not to make any promises of continued employment, or employment for a particular length of time, when offering employment because this could defeat the presumption of at-will employment. See Verbal Offer.
- A verbal offer should ordinarily be followed by a written offer letter which should state, among other things, that the letter is not an employment contract. See Written Offer.
- If the offer is being withdrawn due to a failed background check, employers should be sure to comply with all applicable state and federal notification requirements. See Withdrawing or Rescinding an Employment Offer.
- Localities including Los Angeles, San Francisco and San Jose have requirements pertaining to employment offers. See Local Requirements.
Once the interview process is completed and a selection has been made, it is time to make an employment offer. There are special considerations to be made when offering employment to an at-will employee as compared to an employee with an employment contract. Employment in California is presumed to be at-will, but this presumption can be overcome. +Cal Lab Code § 2922. An employer needs to be careful when communicating an employment offer because an at-will employer "does not have carte blanche to lie to an employee about any matter whatsoever to trick him or her into accepting employment." An employer may be exposed to damages if it makes false promises regarding compensation that induces an individual to change employment to his or her detriment. Agosta v. Astor, +120 Cal. App. 4th 596 (Cal. App. 4th Dist. 2004).
Salary History Restrictions
All employers are prohibited from:
- Relying on an applicant's salary history as a factor in determining whether to offer employment or what salary to offer; and
- Personally or through an agent, seeking salary history information about an applicant, orally or in writing, including compensation and benefits.
However, an employer may ask an applicant about his or her salary expectations. In addition, an employer is allowed to make a compensation decision based on the employee's current salary, as long as any resulting wage differential is justified by one or more of the following factors:
- A seniority system.
- A merit system.
- A system that measures earnings by quantity or quality of production.
- A bona fide factor other than sex, such as education, training, or experience.
If an applicant voluntarily and without prompting discloses his or her salary history, an employer may consider or rely on that information when determining salary. However, an employer cannot rely on prior salary, by itself, to justify any disparity in compensation.
Further, an employer must provide the pay scale for a position to an applicant who makes a reasonable request for that information.
The law defines the following terms:
- Pay scale as a salary or hourly range;
- Reasonable request as a request made after an applicant has completed an initial interview with the employer; and
- Applicant as an individual seeking employment with the employer and is not currently employed with that employer in any capacity or position.
This law does not apply to salary history information disclosable to the public pursuant to federal or state law, including the California Public Records Act or the federal Freedom of Information Act.
San Francisco and San Jose also have requirements involvement employment offers. See Local Requirements.
Typically, an employer will first make a verbal offer to the selected applicant. Employers should be careful not to make any promises of continued employment or employment for a particular length of time when offering employment because this could defeat the presumption of at-will employment, and potentially create an implied employment contract. A verbal offer should ordinarily be followed by a written offer letter.
The written offer letter, should contain certain information and should also state clearly that the letter is not a contract of employment. The written offer letter should include the following:
- The name of the employee;
- The name of the employer;
- The position the employee is being offered with a brief job description, if appropriate;
- The job location where the employee will work;
- The salary or hourly wage, but avoid making promises about future salary increases or bonuses, unless the employer intends to provide a hiring bonus or similar payment;
- The proposed start date;
- The working hours or initial schedule, if appropriate;
- A brief reference to benefits;
- Employers should be careful not to contradict more detailed statements about benefits that are included in the employer handbook or summary plan documents. Most employers refer generally to the categories of benefits provided, and reference the more detailed information that is available after the start of employment.
- In addition to medical, vacation, and similar benefits, the letter may also mention other, less traditional benefits, such as telecommuting, relocation expenses, stock options, or hiring bonuses.
- A clear statement that employment will be at-will;
- A deadline for the employee to accept the employment offer;
- Include a statement that the offer can be withdrawn before it is accepted, if appropriate;
- Consider attaching confidentiality agreements, if there is a reason to have it in place before the rest of the new hire paperwork is completed on the first day;
- Identify the individual who can be contacted with any questions; and
- A signature line for the employee to sign accepting the offer, and provide information about how the letter should be returned.
San Francisco also has requirements involving written employment offers. See Local Requirements.
Any conditions that must be satisfied before employment can begin, such as the completion of a drug test and/or background check, should be listed and explained in the written offer. Employers should be sure to comply with all federal and state requirements pertaining to background checks.
Under the Fair Employment and Housing Act it is an unlawful employment practice for an employer with five or more employees to:
- Include on a job application any question that seeks the disclosure of an applicant's conviction history before the employer makes a conditional employment offer to the applicant.
- To inquire into or consider an applicant's conviction history, until after the employer has made a conditional job offer.
- Consider, distribute, or disseminate the following information while conducting a conviction history background check in connection with any job application:
- Arrests not resulting in a conviction, except that an employer in a health facility may ask an applicant for certain positions about specified types of arrests;
- Referral to or participation in a pretrial or postrial diversion program; or
- Convictions that have been sealed, dismissed, expunged, or statutorily eradicated pursuant to law.
- To interfere with, restrain, or deny the exercise of, or the attempt to exercise, any right provided by this law.
Individualized assessment. An employer that intends to deny an applicant a position of employment solely or in part because of the applicant's conviction history must make an individualized assessment of whether the applicant's conviction history has a direct and adverse relationship with the specific duties of the job that justify denying the applicant the position. When making an individualized assessment the employer must consider all of the following:
- The nature and gravity of the offense or conduct;
- The time that has passed since the offense or conduct and completion of the sentence; and
- The nature of the job.
Disqualification notification. If an employer initially decides that the applicant's conviction history disqualifies the applicant from employment, the employer must notify the applicant of this decision in writing. The notification, may, but is not required to, justify or explain the employer's reasoning for making the decision. However, the notification must contain the following:
- Notice of the conviction that is the basis for the decision to withdraw the offer;
- A copy of the conviction history report, if any; and
- An explanation of the applicant's right to respond to the notice of the employer's decision before that decision becomes final and the deadline by which the applicant must respond. The employer must inform the applicant that the response may include submission of evidence challenging the accuracy of the conviction history report that is the basis for withdrawing the offer, evidence of rehabilitation or mitigating circumstances, or both.
The employer must give the applicant at least five business days to respond to the notice. If within that time period, the applicant notifies the employer in writing that he or she disputes the accuracy of the conviction history report and that he or she is taking steps to obtain evidence, then the applicant must be given five additional business days to respond to the notice. An employer must consider that information before making a final decision.
Denying employment. If an employer makes a final decision to deny an application solely or in part because of the applicant's conviction history, the employer must notify the applicant in writing the following:
- The final denial;
- Any existing procedure the employer has for the applicant to challenge the decision or request reconsideration; and
- The right to file a complaint with the Department of Fair Employment and Housing.
Exempt positions. This law does not apply to the following positions:
- Positions for which a state or local agency is required to conduct a criminal history background check;
- Positions with a criminal justice agency;
- Farm labor contractors; and
- Positions where an employer is required under state, federal or local law to conduct criminal background checks for employment purposes or restricts employment based on criminal history.
This law does not preempt local ban the box laws.
California law allows an employer to ask an applicant or seek information from any source about a particular conviction if:
- The employer is required by law to obtain information regarding that particular conviction, regardless of whether that conviction has been expunged, judicially ordered sealed, statutorily eradicated, or judicially dismissed following probation;
- The applicant would be required to possess or use a firearm in the course of his or her employment;
- The individual with that particular conviction is prohibited from holding the position sought, regardless of whether the conviction was expunged, sealed, statutorily eradicated, or dismissed following probation; or
- The employer is prohibited by law from hiring an applicant who has that particular conviction, regardless of whether that conviction has been expunged, judicially ordered sealed, statutorily eradicated, or judicially dismissed following probation.
A particular conviction is defined as a conviction for specific criminal conduct or a category of criminal offenses prescribed by any federal law, federal regulation, or state law that contains requirements, exclusions, or both, expressly based on that specific criminal conduct or category of criminal offenses.
The law does not prohibit an employer required by state, federal, or local law to conduct criminal background checks for employment purposes or to restrict employment based on criminal history from complying with those requirements, or to prohibit the employer from seeking or receiving an applicant's criminal history report that has been obtained pursuant to procedures otherwise provided for under federal, state, or local law.
Criminal History Information
The California Fair Employment and Housing Council enacted regulations concerning criminal history information in employment. The regulations were enacted prior to the above conviction history law and the regulations are still in effect.
The criminal history regulations set forth the following types of criminal history an employer cannot consider when making hiring decisions:
- An arrest or detention that did not result in conviction;
- Referral to or participation in a pretrial or post-trial diversion program;
- A conviction that has been judicially dismissed or ordered sealed, expunged or eliminated by statute;
- An arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while a person was subject to juvenile court; and
- A non-felony conviction for marijuana possession that is two or more years' old.
Further, employers are prohibited from utilizing criminal history in employment decisions, including hiring, if:
- There would be an adverse impact on the individuals protected under California's Fair Employment and Housing Act that the employer cannot prove is job-related and consistent with business necessity; or
- An employee or applicant has demonstrated a less discriminatory alternative means of achieving the specific business necessity as effectively.
Before an employer may take an adverse action such as declining to hire based on criminal history obtained by a source other than the applicant or employee, the employer must give the impacted individual notice of the disqualifying conviction and reasonable opportunity to present evidence that the information is factually inaccurate. If the applicant or employee establishes that the record is factually inaccurate, then the record cannot be considered in the employment decision. +2 CCR 11017.1.
Juvenile Criminal History Inquiries
Employers are prohibited from asking job applicants about their juvenile records or an arrest or detention that did not result in conviction.
Transgender Identity and Expression
An employer is prohibited from from inquiring about or requiring documentation or proof of an individual's sex, gender, gender identity, or gender expression as a condition of employment unless the employer can show that sex, gender identity or gender expression is a bona fide occupational defense. Inquiries that directly or indirectly identify an individual on the basis of sex, including gender, gender identity, or gender expression, are unlawful. However, an employer may ask an applicant to voluntarily provide such information for specific recordkeeping purposes as authorized under existing law. An employer and employee may also communicate about these issues when the employee initiates communications regarding working conditions. See EEO - Discrimination: California
Employers should perform credit checks if appropriate and permissible. However, California severely limits when credit checks of applicants and employees are permitted. +Cal Lab Code § 1024.5. Credit reports can be used by private employers for employment purposes only if the person about whom the report is sought is or is applying to be:
- In a managerial position;
- In a position for which the information contained in the report is required by law to be disclosed or obtained;
- In a position that involves regular access (for any purposes other than routine solicitation and processing of credit card applications in a retail establishment) to bank or credit card information, social security number, and date of birth for any one person;
- A named signatory on the bank or credit card account of the employer, authorized to transfer money on behalf of the employer, or authorized to enter into financial contracts on behalf of the employer;
- In a position that involves access to confidential or proprietary information, including trade secrets; or
- In a position that involves regular access to cash totaling $10,000 or more of the employer, a customer, or client, during the workday.
California employers must be aware that they not demand or require any applicant or employee to take a polygraph or lie detector test as a condition of employment or continued employment. +Cal Lab Code § 432.2. Further, California employers may not "request" any person to take such a test without advising the person in writing of the provisions of this law. +Cal Lab Code § 432.2(b). This prohibition does not apply to the federal or state government, or any agencies or local subdivisions thereof.
Additionally, employers may make an employment offer conditional upon the successful completion of the following:
- Demonstration of eligibility to work , i.e., completion of a Form I-9 and compliance with any immigration requirements;
- Completion of a medical questionnaire if appropriate; and
- Compliance with any other employer-specific or job-specific requirements, such as providing a copy of a drivers' license or professional license, or signing a confidentiality agreement.
Employers should use extreme caution when using any medical questionnaires in order to avoid claims under the Americans with Disabilities Act, the California Fair Employment and Housing Act, or other applicable federal or state laws. All questions must be job-related, and consistent with business necessity. Medical information must be kept in a confidential file, and separate from the remainder of the personnel file.
The City of Los Angeles and San Francisco also have requirements involving conditional employment offers. See Local Requirements.
Withdrawing or Rescinding an Employment Offer
Unfortunately, sometimes an employer may need to withdraw or rescind an employment offer. The appropriate handling of the withdrawal depends on the reasons for the rescission.
- If the offer is being withdrawn due to a failed background check, employers should be sure to comply with all applicable state and federal notification requirements. For instance, for employers who are authorized to use consumer credit reports in California, the Consumer Credit Reporting Agencies Act (CCRAA), Cal Civ Code § § 1785.1 - 1785.36, requires, among other things, that if an employer actually takes adverse action based in whole or in part on a consumer credit report, the employer must give the applicant or employee a written notice of the adverse action along with specific information about the consumer credit reporting agency which provided the consumer credit report. See Employee Privacy: California.
- In California, offers may be withdrawn following a failed drug test, even if the applicant has a medical marijuana card so long as the employer's policy is clear. Preemployment Screening and Testing: California
- If the offer is being withdrawn due to responses to a medical questionnaire or the results of a medical exam, be sure to consider any potential accommodations that would permit the employee to perform the duties of the job. See Employment Offer: Federal.
- If the offer is being withdrawn due to the employer's financial situation, or other reasons not related to the applicant's qualifications, employers should be sensitive to the potential exposure to damages. +Cal Lab Code § 970.
- If an offer is being withdrawn, the employer should provide as much notice as possible to the applicant.
An employer may terminate the employment of an at-will employee at any time for any reason, so long as the reason is not illegal. However, if an employer withdraws an accepted offer, the employer should consider the potential exposure to damages if the employee has taken action in reliance on the offer. Some examples of activities that an employee might take in reliance on an accepted offer include the following:
- Giving notice at another employer;
- Rejecting other offers; and
- Relocating within California or from a different state. +Cal Lab Code § 970.
If an offer is made in writing, it should also be rescinded in writing. However, particularly if there might be a delay, it is prudent to provide the employee with verbal notice as well. If the employee is covered by a contract, the employer must follow the terms of the contract to withdraw or terminate the contract of employment.
Los Angeles Ban the Box
Under the City of Los Angeles Fair Chance Initiative for Hiring ordinance any private employer located or doing business in Los Angeles that employs 10 or more employees are prohibited from seeking an applicant's criminal history on a job application. An employer cannot request an applicant's criminal history unless a conditional employment offer has been made. A conditional employment offer is defined as a job offer conditioned only on an assessment of the applicant's criminal history, if any, and the duties and responsibilities of the employment position.
An employer is prohibited from withdrawing a conditional job offer or refusing to employ the job applicant (i.e., take an adverse action) based on his or her criminal history unless the employer performs a written assessment that links the specific aspects of the applicant's criminal history with risks inherent in the duties of the position sought by the applicant. In performing the assessment, the employer must at a minimum, consider the factors identified by the US Equal Employment Opportunity Commission and other factors as may be required by rules and guidelines promulgated by the Department of Public Works, Bureau of Contract Administration (Designated Administrative Agency).
Prior to taking an adverse action an employer must provide that person a fair chance process, such as by providing the following:
- Written notification of the proposed adverse action;
- A copy of the written assessment; and
- Any other information or documentation supporting the employer's proposed adverse action.
An employer cannot take an adverse action or fill the employment position sought by the applicant for at least five business days after the applicant is informed of the proposed adverse action in order to allow the applicant to complete the fair chance process. The employer must consider any information or documentation provided by the applicant and perform a written reassessment of the proposed adverse action. If the employer, after performing the reassessment, takes the adverse action against the applicant, then it must notify him or her of the decision and provide that applicant with a copy of the written reassessment.
The following positions are exempt from these requirements:
- A job that requires the employer to obtain an applicant's conviction information.
- A job that requires an applicant to possess or use a firearm in the course of his or her employment.
- A job that prohibits by law an individual who has been convicted of a crime, regardless of whether that conviction has been expunged, judicially ordered sealed, statutorily eradicated or judicially dismissed following probation.
- A job that prohibits an employer by law from hiring an individual who has been convicted of a crime.
This law contains notice-posting requirements. It also requires that employers retain all records and documents related to applicants' job applications and the written assessment and reassessment performed for a period of three years following the receipt of an applicant's employment application.
San Francisco Ban the Box
San Francisco adopted the Fair Chance Ordinance (FCO), which extends its "ban the box" law to private employers with five or more employees (prior to October 1, 2018 the law applied to employers with 20 or more employees). In addition to prohibiting criminal history inquiries on job applications, the ordinance bars employers from asking such questions or seeking an applicant's conviction history or unresolved arrest (i.e., an arrest that is pending criminal investigation or trial that has not yet been resolved) until after a conditional employment offer has been made (prior to October 1, 2018 inquiries were limited until after the first "live" interview has taken place or following a conditional offer of employment). However, employers are prohibited at any time from inquiring or requiring disclosure of or making an adverse action on the following:
- An arrest not leading to a conviction, except where there is an unresolved arrest;
- Participation in or completion of a diversion or deferral of judgment program;
- A conviction that has been judicially dismissed, expunged, voided, or invalidated or otherwise rendered inoperative;
- A conviction or any other determination or adjudication in the juvenile justice system, or information regarding a matter considered in or processed through the juvenile justice system;
- A conviction that is more than seven years old;
- Information, such as an infraction that pertains to an offense other than a felony or misdemeanor;
- Conduct that has been decriminalized since the date of the conviction.
Prior to making a conviction history inquiry an employer is required to provide a copy of a notice which informs applicants and employees of their rights under this ordinance. Further, prior to obtaining a background check report, employers must comply with state and federal requirements, including the Fair Credit Reporting Act and provide notice to the applicant or employee that the report is being sought.
When making an employment decision based on the applicant's or employee's conviction history an employer must conduct an individualized assessment considering the following:
- Only directly-related convictions;
- The time that has elapsed since the conviction or unresolved arrest; and
- Any evidence of inaccuracy or evidence of rehabilitation or other mitigating factors.
If an employer intends to base an adverse action (e.g. fail or refuse to hire) on an item(s) in the applicant or employee's conviction history, prior to taking such action the employer must provide the applicant or employee with a copy of the background check report, if any, and notify him or her of the prospective adverse action and the items that form the basis for the prospective adverse action. If the applicant or employee provides the employer within seven days of receipt of the notice of the inaccuracy of the item(s) of conviction history or evidence of rehabilitation or other mitigating factors, the employer must delay the adverse action for a reasonable period after receipt of the information and during that time must reconsider the proposed adverse action.
San Francisco Formula Retail Employee Rights Ordinances
The San Francisco Formula Retail Employee Rights Ordinances (also known as the Retail Workers Bill of Rights) requires certain chain stores with at least 40 retail establishments worldwide that have additional hours of work to offer in job positions held by current part-time employees, to offer those hours of work first to existing qualified employees before hiring additional part-time employees or before securing additional employees through the services of a temporary services agency, staffing agency or any similar contractor. See Managing Employees in Special Situations: Federal. The employer is required to make the offer in writing and retain a copy of the offer for three years.
The requirement applies to employers when:
- The current workers are qualified to do the work, as reasonably determined by the employer; and
- The work is the same or similar to the work the employees have performed at the formula retail business.
The employer is required to offer only the number of hours that the employee requires in order to work 35 hours a week.
Further, under this ordinance if a chain store owner changes ownership the successor employer must retain for 90 days the employees who worked for the old employer for at least six months other than supervisory, managerial, or confidential employees. Among other things, the ordinance requires the successor employer to make a written offer of employment to the individuals on the retention list under the same terms of employment with respect to job classification, compensation and number of work hours that governed those individuals and the previous employer, and as otherwise required by law. The successor employer must retain copies of the offers of employment for three years.
San Francisco, California Police Code SEC. 3300F.4, as amended by City and County of San Francisco Board of Supervisors Ordinance 140880.
San Francisco Salary History Inquiry
The San Francisco Salary History Ordinance prohibits employers, including city contractor and subcontractors, from:
- Considering or relying on an applicant's salary history as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant;
- Inquiring about an applicant's salary history;
- Refusing to hire, or otherwise disfavor, injure, or retaliate against an applicant for not disclosing his or her salary history; and
- Releasing the salary history of any current or former employee to that person's prospective employer without written authorization from the current or former employee unless:
- The release of salary history is required by law;
- Is part of a publicly available record; or
- Is subject to a collective bargaining agreement.
The ordinance does not prevent an applicant from voluntarily and without prompting disclosing his or her salary history. If an applicant voluntarily and without prompting discloses salary history or provides written authorization, the ordinance does not prohibit an employer from considering that disclosed salary history in determining salary for that applicant or verifying such applicant's salary history. However, salary history by itself must not be used to justify paying any employee of a different sex, race or ethnicity less than such applicant or prospective employee for doing substantially similar work under similar working conditions.
Further an employer is not prohibited from:
- Discussing expectations with respect to salary, including, but not limited to unvested equity or deferred compensation or bonus that an applicant would forfeit or have cancelled by virtue of the applicant's resignation; and
- Verifying non-salary related information disclosed by the applicant or from conducting a background check provided that if such verification or background check discloses the applicant's salary history, the disclosed salary history is not considered for purposes of determining salary to be offered or whether to offer employment.
There are also notice-posting requirements.
San Jose Opportunity to Work Ordinance
Under San Jose's Opportunity to Work Ordinance, before hiring new employees or subcontractors, an employer with 36 or more employees is required to offer additional hours of work to existing part-time employees who, in the employer's good faith and reasonable judgment, have the skills and experience to perform the work. See Managing Employees in Special Situations: Federal. However, an employer is not required to offer work hours if the employer would be required to compensate the employee at time-and-a-half or other premium rate under any law or collective bargaining agreement.
The ordinance contains a hardship exemption for up to 12 months to an employer that demonstrates the following:
- It has undertaken in good faith all reasonable steps to comply; and
- Full and immediate compliance would be impracticable, impossible or futile.
The ordinance does not apply to executive, administrative and professional employees who are exempted from overtime requirements and minimum wage coverage. As a result, when counting employees to determine coverage, an employer should only count employees who are eligible to receive minimum wage toward the 36-employee requirement.
Businesses with 35 or fewer employees (small businesses) are exempt from the ordinance. In order to claim the exemption chain businesses not owned by a franchisee must count employees at every location, whether or not located in the city. For franchisees the number of employees is determined by the combined total number of employees at every location owned by the franchisee and operated under the same franchisee whether or not located in the city.
The ordinance contains notice-posting and record retention requirements. See Employee Communications: California.
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