Washington Employers: Time for a Fair Chance Act Compliance Check

Employers across Washington state should evaluate whether their background check policies and practices comply with the Washington Fair Chance Act's updated restrictions. On January 1, 2027, the Washington Fair Chance Act's restrictions will apply to all employers with fewer than 15 employees and new, more stringent requirements will apply to every employer. While the Washington Fair Chance Act originally imposed modest procedural limitations on when employers could consider an applicant's or employee's criminal history, the Act's recent amendments go even further, including new restrictions on what criminal history information employers are allowed to consider and additional procedural requirements that may be challenging to navigate.

As of right now, employers with 15 or more employees may not:

• Ask about an applicant's criminal background until the employer has (1) determined that the applicant is otherwise qualified and (2) made a conditional offer of employment;
• Advertise or implement policies that categorically exclude individuals with criminal records;
• Automatically exclude an individual from a position because they have a criminal record;
• Reject an individual for not disclosing their criminal record prior to a conditional offer of employment;
• Take adverse action based on a juvenile conviction or an arrest record (unless the matter of the arrest is still pending); or
• Take adverse action based on an adult conviction record unless there is a "legitimate business reason" (which is defined by the law) and the individual has been provided notice and opportunity to respond, as well as multiple specific disclosures.

Now is a good time for employers to revisit policies, train key personnel, and confirm that processes are in place to field questions about when (or if) to use criminal history information in employment decisions.

Before the Background Check: The Fair Chance Act's Impact on Hiring

Even before a job is posted, employers need to consider the impact of the Fair Chance Act's restrictions. Employers should ask themselves the following questions:

• Job postings: Does the job application contain language like "no felons," "no criminal background," or otherwise discourage or exclude individuals with criminal convictions or arrest records from applying?
• Application materials: Do applicants need to provide information or respond to written questions about whether they have criminal histories?
• Interview questions: Do interview scripts directly or indirectly seek information from applicants about conviction or arrest records? Do interviewing personnel know what questions they can and cannot ask?
• Offer letters: Does the offer letter explicitly state that the offer is contingent upon successful completion of a background check (and if so, does it include the required notice and other disclosures)?

Is There a Legitimate Business Reason?

If the employer runs a background check that reveals concerning criminal history information, the employer cannot simply act on that information. The Fair Chance Act requires employers to establish a legitimate business reason before taking an adverse action based on criminal history information. Employers that skip the required process and move directly to reject a candidate, terminate employment, rescind an offer, or other adverse action risk liability—even where the underlying concerns are legitimate.

Employers should assess each case on an individual basis to determine whether there is a legitimate business reason for any adverse employment action. The employer should consider what, if any, negative impact there will be on the applicant's or employee's ability to perform the job, as well as potential harm to people, property, business reputation, or business assets.

Employers must consider:

• The seriousness of the criminal conduct at issue;
• The number and types of convictions;
• The amount of time that has elapsed since the conviction;
• Evidence of rehabilitation, good conduct, work experience, education, and training;
• The duties and responsibilities of the position; and
• The place and manner in which the work will be performed.

The Fair Chance Act Also Covers Employees

The Fair Chance Act implicates more than just hiring. It also applies when employers consider adverse action against current employees.

An employer may take an adverse action (such as termination, suspension, or demotion) based on a current employee's criminal history information only after following the required process to establish a legitimate business reason.

Penalties

The Fair Chance Act is enforced by the Attorney General's Office. The attorney general may investigate violations and impose administrative sanctions of $1,500 for a first violation, $3,000 for a second violation, and $15,000 for each subsequent violation. The attorney general may also pursue legal action for second and subsequent violations to obtain unpaid wages, damages, and attorneys' fees and costs—all of which may exceed administrative sanctions, perhaps significantly so.

Additional Considerations

While Washington's Fair Chance Act and Seattle's Fair Chance Ordinance have significant overlap, employers with employees in Seattle should be aware the Seattle ordinance requires employers to post a specific notice, involves a different penalty schedule (including a ban on contracting with the City of Seattle for repeat offenders), and is enforced by the Seattle Office of Labor Standards.

In addition, employers should also keep in mind that the Washington and federal Fair Credit Reporting Acts regulate the background check process, and require specific notifications to applicants and employees and consent prior to conducting background checks, including special restrictions on when credit information can be obtained.

Practical Steps Employers Should Take Now

Employers should consider taking the following steps:

• Audit current job postings and templates to remove blanket exclusions—such as "must pass background check" or "no felonies"—and ensure that language does not discourage individuals with criminal records from applying.
• Remove questions about criminal history from job applications and interview scripts. Make sure interviewees know not to ask about criminal history.
• Review policies, practices, and procedures to make sure background checks are postponed until after a conditional offer of employment.
• Provide the Washington State Attorney General's Fair Chance Act Guide and inform the applicant about the Washington Fair Chance Act requirements, if the offer of employment is contingent on passing a background check.
• Establish a compliant process if a background check reveals criminal history.
• Train recruiters, HR personnel, and managers on how to respond to questions about background checks and what to do if a background check reveals criminal history information.
• Update job descriptions to help assess legitimate business reasons for any adverse action.

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Angela Vogel and Joseph Hoag are partners, and Aliah McCord and Rebecca Shelton are associates in DWT's Seattle office. The law related to employment background checks is complicated and includes a patchwork of additional federal, state, and local laws. For additional guidance, please reach out to one of the authors or another member of our employment services team. To stay informed, sign up for our alerts.