Ordinance No. 128-26 (File No. 260540), Effective August 10, 2026

San Francisco has greatly expanded its Fair Chance Ordinance (FCO), the local law that restricts how employers can use criminal history in hiring decisions. The Board of Supervisors passed the amendments on July 7, 2026; Mayor Daniel Lurie approved them on July 10, 2026; and they became effective on August 10, 2026. Employers operating in San Francisco should review and update their background check and adverse action procedures now, as these changes restrict the considerations employers can make and aim to minimize procedural mistakes.

Who is covered

The FCO already has broad application, and these amendments do not narrow its scope. The FCO applies to employers in or doing business in San Francisco that employ five or more persons, regardless of where those employees are located, when the position at issue involves at least eight hours of work per week in the city. In line with the FCO's current practice, coverage extends beyond traditional employees to include independent contractors, temporary workers, and staff through alternative work arrangements. Organizations with operations in San Francisco, remote workers in the city, or staffing arrangements involving workers performing at least eight hours of work per week within the city should assess whether the FCO applies to them.

Four new categories of criminal history are categorically off-limits

The main change is a categorical bar on considering certain out-of-state convictions or unresolved arrests when the conduct would have been lawful in California. Employers are now prohibited from asking about, considering, or relying on out-of-state criminal history, including:

• Abortion-related healthcare (seeking, performing, providing, receiving, or facilitating pregnancy termination services)
• Gender-affirming care (medical care, support, or advocacy related to gender identity, including hormone therapy and related procedures)
• Drag performances (artistic performances involving exaggerated displays of femininity or masculinity)
• Miscarriage or spontaneous abortion-related conduct (including pregnancy loss before 20 weeks, conduct related to a stillbirth, and related medical services)

These four categories of out-of-state convictions and unresolved arrests are categorically excluded from consideration and cannot, in whole or in part, serve as the basis for an adverse employment action. The amendments address concerns that applicants and employees could face employment consequences in San Francisco based on criminal records stemming from out-of-state conduct that is lawful in California.

Subject to certain statutory exceptions, employers still may not inquire into or consider arrests that did not lead to conviction, dismissed convictions, juvenile records, infractions, decriminalized conduct, or convictions more than seven years old. Criminal history inquiries also generally cannot begin until after a conditional offer is made.

Tighter, more formal procedural timelines

The FCO already limits an employer’s individualized assessment to “Directly-Related Convictions,” generally defined as convictions involving conduct that has a direct and specific negative impact on the individual’s ability to perform the duties or responsibilities of the position. The recent amendments build on the existing standard by adding new protections when a proposed adverse action is based on a conviction that does not meet the standard.

The amendments tighten the individualized-assessment and adverse-action process that employers must follow once a conditional offer has been made and a background check reveals a potentially disqualifying conviction:

• If, within seven days of the pre-adverse-action notice, the applicant or employee submits evidence disputing the accuracy of the conviction history or evidence of rehabilitation or other mitigating factors, the employer must confirm receipt within 14 days.
• The employer must then delay any adverse action for a reasonable period and reconsider the proposed adverse action in light of the information submitted.
• If the individual makes a reasonable showing that the proposed adverse action is based solely on a conviction that is not a Directly-Related Conviction, the employer must withdraw the proposed adverse action.
• If the individual responds in a timely manner, the employer must provide notice of any final adverse action within 30 days of receiving the response. If the individual does not respond, the employer must provide notice of any final adverse action within 30 days of the pre-adverse-action notice.

These are meaningful, auditable deadlines. Employers whose background-check vendors or HR teams currently handle this process informally or on a longer or undocumented timeline are the most exposed.

Penalties Have Nearly Doubled

The amendments significantly increase the cost of noncompliance. The maximum administrative penalties, enforced by the San Francisco Office of Labor Standards Enforcement (OLSE), increase as follows: a first violation increases from $500 to $1,000 per affected applicant or employee; a second violation increases from $1,000 to $2,000; and third and subsequent violations increase from $2,000 to $4,000. Liquidated damages available to a prevailing plaintiff in a civil action also double, from $500 to $1,000 for each affected employee, applicant, or other person for each day the violation continued or was permitted to continue. Prevailing plaintiffs may also recover other appropriate legal or equitable relief, as well as reasonable attorneys’ fees and costs. Although the ordinance contains special rules for procedural violations affecting multiple individuals at the same time, administrative penalties may be assessed for each affected applicant or employee, creating potentially significant aggregate exposure.

Employer Responsibilities and Tasks

In addition to implementing the new requirements, we recommend that San Francisco employers use this opportunity to confirm compliance with the FCO’s existing requirements and promptly take the following steps:

1. Update background check policies and adjudication matrices to flag and exclude the four new protected categories of out-of-state convictions and unresolved arrests, and train the people (or vendors) who conduct background checks accordingly.
2. Review and tighten internal timelines for confirming receipt of applicant responses, pausing adverse action decisions, and issuing final notices to align with the new 14-day and 30-day deadlines.
3. Confirm that any third-party background-check or adjudication vendor is aware of the amendments and has updated its workflows and adverse-action templates.
4. Audit current adverse-action letters and individualized-assessment documentation to ensure the reasoning given can withstand scrutiny under the tightened standard and to create a defensible record given the higher per-violation penalties.
5. Review San Francisco job postings and recruiting materials to ensure they include the FCO-required fair-chance statement.
6. Confirm that the required FCO notice is posted at all applicable San Francisco workplaces and job sites.
7. Retrain hiring managers responsible for San Francisco-covered positions on the ordinance's scope, including its application to contractors and contingent workers.

Employers should also ensure that their revised process remains compliant with California's Fair Chance Act and with applicable state and federal background-check laws, including the FCRA.

Please reach out to your Medina McKelvey employment counsel if you would like help auditing your current hiring workflows against these new requirements, or if you have questions about how the amendments apply to your specific workforce.

This alert is provided for general informational purposes and does not constitute legal advice. Please contact us to discuss how these changes apply to your organization's specific circumstances.