San Francisco's Fair Chance Ordinance Gets Major Update: What HR Teams Need to Know

What Changed on August 10, 2026

The amended FCO introduces several substantive changes that affect how employers conduct background checks and make employment decisions. The most significant involve restrictions on out-of-state criminal records and strengthened procedural requirements.

New Restrictions on Out-of-State Convictions

Under the amended ordinance, employers may no longer consider out-of-state criminal convictions or unresolved arrests if the underlying conduct is lawful in California. This applies specifically to conduct related to:

• Abortion-related healthcare — seeking, providing, or facilitating reproductive care
• Gender-affirming care — receiving, providing, or assisting with gender-transition healthcare
• Drag performances — public artistic expression
• Spontaneous abortion — including miscarriage, stillbirth, or pregnancy loss

These records cannot be used as a basis for any adverse employment action, and the amended definition in Police Code section 4903 provides that they can never be a "Directly-Related Conviction" — regardless of the position or industry.

This provision directly responds to the growing patchwork of state laws criminalizing conduct that remains legal in California. For multi-state employers, it means that a conviction in another jurisdiction does not automatically translate into a permissible screening criterion in San Francisco.

Existing Record Restrictions Still Apply

The amended FCO preserves all existing prohibitions. Employers in San Francisco still may not consider:

• Arrests not leading to conviction (except unresolved arrests, with limitations)
• Juvenile records
• Dismissed, expunged, or sealed convictions
• Infractions
• Convictions older than seven years (with narrow exceptions for roles supervising children, dependent adults, or people 65 and older)
• Offenses decriminalized under California law, including cannabis possession
• Participation in diversion or deferral programs

Criminal history inquiries and background checks remain prohibited until after a conditional offer of employment has been made.

Tighter Adverse Action Procedures

The FCO has long required a pre-adverse action notice, a seven-day response window, and a reasonable delay while the employer reviews any response. The amendments add three new procedural obligations. The full sequence is now:

1. Provide a pre-adverse action notice that identifies the specific conviction records being considered and includes a copy of any background check report (pre-existing)
2. Allow at least 7 days for the applicant or employee to respond with evidence of rehabilitation, mitigating circumstances, or factual inaccuracy (pre-existing)
3. Confirm receipt of any response within 14 days and delay the final decision for a reasonable period while reviewing the new information (new)
4. Withdraw the adverse action if the person makes a reasonable factual showing that it is based solely on a conviction that is not directly related to the job (new)
5. Communicate any final adverse action within 30 days after receiving the response or, if none is received, after the response period expires (new — the prior ordinance set no deadline)

These timelines are more prescriptive than the previous version of the ordinance and may require changes to automated hiring workflows and applicant tracking system (ATS) configurations. They also go beyond California's Fair Chance Act (Gov. Code § 12952), which requires five business days to respond plus a five-day extension for disputed accuracy but imposes no receipt confirmation, withdrawal mandate, or final-decision deadline.

Doubled Penalties

Administrative penalties under the amended FCO have doubled:

These penalties are assessed per affected applicant or employee and are paid to that individual. The private right of action also grew: liquidated damages rose from $500 to $1,000 per person per day of violation. Before suing, an individual must file a complaint with the Office of Labor Standards Enforcement (OLSE), wait 90 days, and give 30 days' written notice to OLSE and the City Attorney; the one-year limitations period is unchanged. Employers must also keep FCO-related records for three years and report compliance to OLSE annually.

Updated Posting and Advertising Requirements

Employers must post the updated FCO notice — OLSE released an August 2026 version in English, Spanish, and Chinese — at every San Francisco worksite, plus any language spoken by at least 5% of the workforce. Job postings and advertisements for covered positions must state that qualified applicants with arrest and conviction records will be considered; OLSE's suggested language is: "Pursuant to the San Francisco Fair Chance Ordinance, we will consider for employment qualified applicants with arrest and conviction records."

Why This Matters Beyond San Francisco

San Francisco's amended FCO is part of a broader national trend toward expanding fair chance hiring protections. Roughly 37 states and more than 150 cities and counties have adopted some form of ban-the-box or fair chance policy (many limited to public employers), but the FCO's out-of-state conviction provisions represent a new frontier.

The cross-jurisdictional dimension is particularly challenging for multi-state employers. A conviction that triggers a screening flag in one state may now be entirely off-limits for consideration in another. HR teams that rely on a single, standardized background check adjudication matrix across all locations will need to build in jurisdiction-specific logic — or risk systematic noncompliance.

Research supports the business case for fair chance hiring as well. BlueHive's white paper, The ROI of Second Chances: Unlocking Hidden Workforce, summarizes SHRM research finding that employees with criminal records perform comparably to other hires on reliability and quality of work, and details how a relevance-based background check process and structured post-hire support can reduce turnover and lower cost-per-hire.

What Employers Should Do Now

The amendments are already in effect. HR operations teams should take the following steps immediately:

1. Confirm Coverage and Audit Your Background Check Process

Determine which roles meet the five-employee / eight-hours-per-week test, including temporary, contract, and remote positions. Then review your screening criteria and adjudication matrices for those positions. Confirm that out-of-state convictions for California-lawful conduct are excluded from consideration. Work with your background check vendor to ensure their processes reflect the updated rules.

2. Update Adverse Action Workflows

Map your current adverse action process against the amended FCO's timelines:

• Pre-adverse action notice with specific records and report
• 7-day response window
• 14-day confirmation of receipt
• Withdrawal when the record is shown not to be directly related
• 30-day final decision deadline

If you use an ATS or HRIS to manage these steps, verify that the system can enforce the new timelines. Manual processes should be documented in a standard operating procedure.

3. Revise Job Postings and Workplace Notices

Update all job postings for San Francisco positions to include the required FCO disclosure language. Download and post the updated FCO notice at every San Francisco worksite.

4. Train Hiring Managers and Recruiters

HR staff, hiring managers, and recruiters involved in San Francisco hiring decisions need to understand:

• Which criminal records can and cannot be considered
• The new categories of protected out-of-state convictions
• The specific steps and timelines for the adverse action process
• The doubled penalties for violations

5. Review Multi-State Adjudication Logic

If your organization operates in multiple jurisdictions, audit your background check adjudication logic to ensure it accounts for varying fair chance requirements. A one-size-fits-all approach is increasingly untenable as cities and states adopt divergent rules.

6. Document Everything

Maintain clear records of every step in the criminal history evaluation process — from the initial conditional offer through any adverse action — and retain them for the three years the ordinance requires. Documentation is your primary defense in the event of a complaint or investigation.

The Bigger Picture for HR Operations

The amended FCO reflects a reality that HR operations teams are already navigating: employment law is becoming more localized and more complex. The days of managing a single background check policy across an entire organization are over for most multi-state employers.

The practical response is to build compliance into your processes rather than treating it as a periodic audit exercise. That means jurisdiction-aware screening workflows, automated timeline enforcement, regular policy reviews, and ongoing training for everyone involved in hiring decisions.

San Francisco's updated Fair Chance Ordinance is one of the most detailed and prescriptive fair chance laws in the country. Getting it right protects your organization from escalating penalties — and ensures that qualified candidates are not unfairly excluded from opportunities.

Sources

• San Francisco Fair Chance Ordinance — SF.gov
• Ordinance No. 128-26 (File No. 260540) — San Francisco Board of Supervisors
• California Government Code § 12952 — Fair Chance Act
• Amended San Francisco Fair Chance Ordinance Imposes New Restrictions Effective August 10, 2026 — Littler Mendelson
• San Francisco Fair Chance Ordinance Amendments Take Effect August 2026 — CDF Labor Law
• San Francisco Amends its Fair Chance Ordinance Effective August 10, 2026 — Weintraub Tobin
• SF Fair Chance Ordinance 2026 Amendments: Employer Checklist — Kress Inc.
• The ROI of Second Chances: Unlocking Hidden Workforce — BlueHive