Hiring a Store Manager Under Pay Transparency, Fair Chance, and Pre-Offer Medical Rules
Harvest Lane Markets operates six boutique grocery stores with 120 employees. Its Indeed posting for Store Manager lists duties and 'competitive salary' but no pay range. The online application asks, 'Have you ever been convicted of a felony or misdemeanor?' and 'What was your salary at your last job?' All five finalists are run through a credit check by a new vendor, whose form combines the disclosure, authorization, and liability release on a single page. Finalists also complete a 40-question medical history and physical-capacity questionnaire before the offer letter is issued. One finalist was told by the district manager, 'We pulled your credit - it's rough, but don't worry about it.' The owner wants to extend offers by month-end.
1. Identify each unlawful or high-risk practice in the hiring process and explain the specific rule it violates.
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1. No pay scale in the posting. Employers with 15 or more employees must include the pay scale in any job posting and provide it on request (Labor Code 432.3). 'Competitive salary' is not a pay scale. Fix the posting and re-post before screening further.
2. Conviction question on the application. The Fair Chance Act (Gov. Code 12952) prohibits any inquiry into conviction history before a conditional offer of employment has been made. Remove the question from the application and from any intake script used by the vendor or recruiters.
3. Salary history question. Labor Code 432.3 prohibits seeking an applicant's salary history, directly or through an agent. Asking for salary expectations is permitted; asking what the last employer paid is not. Scrub the ATS and any recruiter screening form, and instruct the agency.
4. Combined FCRA disclosure and release. The background check disclosure must be a clear, standalone document; combining it with the authorization, liability release, or state-law notices is a well-recognized violation and destroys the safe harbor for technical errors. Separate the documents.
5. Credit check for every finalist. Two problems: whether a credit report is a permissible, job-related criterion for a store manager at all (the ICRAA and FEHA both point the same direction - credit information should be used only where it is substantially related to the job), and the process. The ICRAA requires that the applicant receive a copy of the report and a summary of rights, and an opportunity to respond, before any adverse action; the district manager's comment suggests the information was already being shared casually.
6. Pre-offer medical questionnaire. Disability-related inquiries and medical examinations are prohibited before a conditional offer, and after an offer they must be applied uniformly to all entering employees in the same job category. A physical-capacity test can also qualify as a medical examination depending on what it measures. Move the process behind the conditional offer, or replace it with a job-related functional test that does not elicit medical information.
2. Walk through the compliant Fair Chance Act sequence the company must follow once candidates are finalists.
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Step 1. Screen and interview on qualifications only. No criminal history question, no informal 'anything we should know?' inquiry.
Step 2. Make a written conditional offer that states it is contingent on a background check and any post-offer requirements.
Step 3. Only now ask about conviction history, if the company chooses to ask at all.
Step 4. If the company is inclined to withdraw, conduct an individualized assessment: the nature and gravity of the offense, the time elapsed, and the nature of the job. Do not apply an automatic bar.
Step 5. Give written preliminary notice identifying the conviction, provide a copy of the background report, and inform the candidate of the right to respond with evidence of inaccuracy, rehabilitation, or mitigating circumstances. The candidate must have at least five business days to respond.
Step 6. Hold the position open during the response period, consider the response in good faith, and document the analysis.
Step 7. If the company still withdraws, send written notice of the final decision and the right to file a complaint with the Civil Rights Department.
Absolute limits: arrests that did not lead to conviction, convictions that have been dismissed, sealed, expunged, or judicially eradicated, and participation in diversion programs cannot be considered.
Timing note for the owner: a month-end deadline does not shorten any step in this sequence. Build the five-business-day response window into the offer calendar, or the offer will not be defensible.
3. What should the company do about the credit check vendor, the disclosure forms, and record retention?
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Vendor. Require a written services agreement, confirm how the vendor delivers reports and notices, and confirm the vendor knows the Fair Chance Act and salary-history rules apply to its screening scripts. Do not let a vendor's template determine company compliance.
Disclosure and authorization. Use a standalone disclosure and a separate authorization. Add the ICRAA notice package - a copy of the report and a summary of rights before any adverse action, with a real opportunity to dispute. Under both the FCRA and ICRAA, the pre-adverse and final adverse notices must be accurate; the district manager's comment to the finalist is exactly the kind of informal disclosure that undermines the notice process.
Decision process. Decide before running any report whether credit is job-related for this role. If it is not, stop running it - a credit check without a job-related justification invites both ICRAA and FEHA claims.
Retention. Applications, résumés, interview notes, background reports, and the individualized assessment should be retained for at least four years (Gov. Code 12946), and the adverse action notices with the reports and summaries of rights longer where a claim is anticipated. Store these separately from the personnel file for finalists who are not hired.
Data privacy. Background check reports contain consumer personal information subject to the CCPA/CPRA; the notice at collection must cover it and access should be restricted to those with a hiring need.