Washington Expands Fair Chance Act Obligations for Employers Conducting Background Checks

Effective July 1, 2026, Washington employers with 15 or more employees are subject to significant amendments to the Washington Fair Chance Act (“WFCA”). The amendments delay when employers may inquire about criminal history, bar reliance on entire categories of criminal records, extend the law's protections to current employees, and require a documented two-step process before any adverse employment action may be taken. Employers with fewer than 15 employees must comply by January 1, 2027.

Certain employers remain outside the law's scope, including those hiring individuals with unsupervised access to children under 18 or to vulnerable adults or persons, law enforcement and criminal justice agencies, employers seeking non-employee volunteers, employers otherwise permitted or required by law to consider criminal records, entities subject to the rules of a self-regulatory organization under the Securities Exchange Act of 1934, and employers hiring for federal contract positions that prohibit hiring individuals with criminal records.

Criminal History Inquiries Now Require a Conditional Offer

Washington’s original Fair Chance Act, enacted in 2018, permitted employers to inquire about criminal history once they determined that an applicant was “otherwise qualified” for the position. The amended WFCA moves that line significantly later in the process. Employers may not inquire about, receive, or otherwise obtain information regarding an applicant's criminal history - whether through an application, a direct question, or a background check - until the employer has determined the applicant is otherwise qualified and extended a conditional offer of employment. Employers also may not reject an applicant for failing to disclose criminal history before a conditional offer is made. The restriction applies to criminal history obtained from any source, not merely to reports furnished by a consumer reporting agency.

The amendments also narrow what employers may consider at all. Regardless of timing, employers may not take an adverse employment action based on an arrest record or a juvenile conviction record. The only exception is an adult arrest in which the individual is out on bail or released on personal recognizance pending trial. The 2018 law's prohibitions on categorical exclusion policies and on job advertisements screening out applicants with criminal records remain in effect, meaning postings stating “no felons” or “no criminal background” continue to be unlawful.

Significantly, the amended WFCA now applies to “tangible adverse employment actions,” newly defined to include not only rejecting an otherwise qualified applicant but also terminating, suspending, disciplining, demoting, or denying a promotion to a current employee. Because the prior law was directed principally at hiring decisions, this represents a considerable expansion of the statute's reach and means that employee-side decisions touching criminal history must now run through the same analysis.

Adverse Employment Action Requires a Legitimate Business Reason and a Two-Step Process

An employer may not take a tangible adverse employment action solely based on an adult conviction record unless it can establish a “legitimate business reason.” That standard is satisfied where the employer holds a good faith belief that the nature of the criminal conduct underlying the conviction will either (a) negatively affect the individual's fitness or ability to perform the position, or (b) harm or cause injury to people, property, business reputation, or business assets. Both prongs require the employer to consider and document the following factors: (i) the seriousness of the underlying conduct; (ii) the number and types of convictions; (iii) the time elapsed since the conviction, excluding periods of incarceration; (iv) any verifiable information regarding the individual's rehabilitation, good conduct, work experience, education, and training; (v) the specific duties and responsibilities of the position; and (vi) the place and manner in which the position will be performed.

Before finalizing any adverse employment action, the employer must (a) notify the applicant or employee in writing of its preliminary decision, (b) identify the specific record on which it is relying, and (c) hold the position open for at least two business days. That period is intended to give the individual a reasonable opportunity to correct or explain the record or to submit information regarding rehabilitation, good conduct, work experience, education, and training. Where the criminal history was obtained from a consumer reporting agency, the federal Fair Credit Reporting Act's longer pre-adverse action period - generally five business days - continues to apply, and employers should build their process around the longer federal period rather than the state minimum.

If the employer proceeds with a final adverse employment action after the waiting period, it must provide the applicant or employee with a written decision that includes: (a) specific documentation of the employer’s reasoning, (b) an assessment of each of the required factors, (c) the impact of the conviction on the position or business operations, and (d) the employer’s consideration of the applicant’s or employee’s rehabilitation, good conduct, work experience, education, and training.

New Disclosure Obligations and Increased Penalties

The amendments also add an early disclosure requirement. If an employer informs an applicant that the position will be subject to a post-offer background check, or an applicant voluntarily discloses criminal history during an interview, even if unprompted, the employer must immediately provide the applicant with a written summary of specified rights under the WFCA and a copy of the Washington Fair Chance Act Guide for Employers and Job Applicants.

Enforcement remains exclusively with the Attorney General's Office, and the amendments do not create a private right of action. The prior requirement that the Attorney General pursue education and warnings before taking enforcement action has been eliminated. Penalties now range from $1,500 for a first violation to $3,000 for a second violation and $15,000 for third and subsequent violations, assessed per aggrieved person and payable to the complainant.

What Employers Should Do Now

In light of these amendments, Washington employers should consider taking the following steps:

• Review employment applications and recruiting materials. Remove criminal history questions from employment applications, career websites, and job postings. Ensure recruiters and hiring managers do not inquire into or independently search an applicant's criminal history before extending a conditional offer of employment.
• Confirm hiring procedures. Review hiring practices to ensure that background checks are not initiated until after a conditional offer has been made, rather than occurring concurrently with or before the offer. Train recruiters, interviewers, and hiring managers on the amended law, including how to respond when an applicant voluntarily discloses criminal history during the hiring process.
• Prepare required applicant notices. Develop a written summary of applicants' rights under the WFCA. Employers should prepare their own compliant summary and provide it, together with copy of the Washington Fair Chance Act Guide, whenever required under the amended law.
• Document individualized assessments. Implement a standardized assessment template that addresses each of the factors identified under the WFCA and documents the legitimate business reason supporting any employment decision based on an individual's conviction history.
• Update adverse employment action procedures. Revise pre-adverse and adverse employment action notices to comply with the WFCA and ensure timing requirements satisfy both the WFCA and the Fair Credit Reporting Act.
• Apply procedures consistently to current employees. Update employment practices to ensure the amended requirements are followed when making disciplinary, termination, demotion, or promotion decisions involving an employee's criminal history.
• Coordinate with background screening vendors. Confirm that third-party background check providers' procedures, forms, and timing requirements are consistent with the amended WFCA and the employer's updated hiring practices.

Key Takeaway

These amendments reflect the continued expansion of state-level restrictions on the use of criminal history in employment decisions and shift the compliance burden from a timing rule to a documented, decision-by-decision process. Employers with Washington employees should review their hiring practices, adverse employment action templates, and handbook language to ensure compliance, and employers with fewer than 15 employees should use the months before January 1, 2027 to build out the same process. For more information or assistance, please contact one of Honigman's Employment and Labor Attorneys here.