A bill that would have restricted how housing providers and other employers use criminal background checks in hiring has stalled on the Assembly floor.

AB 2095, by Assemblymember Alex Lee, D-Santa Clara, proposed major changes to California’s Fair Chance Act, the current state law that governs how employers, including housing providers and management companies, must consider an applicant’s criminal history during hiring.

The current California law limits when employers can ask about criminal history. It also requires employers to review whether a conviction is actually related to the job before denying employment.

AB 2095 would have gone further. It proposed a broad presumption that a criminal conviction is not job related if the applicant has completed their sentence or obtained a license or credential. In practical terms, the legislation made the assumption that a criminal conviction should not be used to disqualify an applicant.

A broad coalition of business and industry organizations — including the California Chamber of Commerce and the California Apartment Association — opposed the bill, objecting to a change in the law because it would have made safety-based hiring decisions more difficult. A past conviction may not matter for many jobs. But for some positions, the nature of the offense could be directly relevant. That is especially true in the rental housing industry, where employees may have access to sensitive locations, such as a tenant’s rental unit or to private financial information, such as rent payment records.

The bill also proposed to add new procedural steps before an employer could even obtain a background check. Employers would have had to identify job duties that would disqualify an applicant with a criminal history. That may sound simple, but it would have required employers to analyze job duties and any background disqualifications — at the front end of hiring — before they knew what, if anything, a background check would show.

This analysis would have been especially difficult for small businesses. Many do not have human resources departments or employment lawyers available to review every job duty against a wide range of possible criminal convictions. That would have increased the chance of technical mistakes, even when an employer is trying to comply.

Litigation risk was the central concern. Even when an employer acts in good faith, defending an employment claim can be expensive. AB 2095 would have increased the chance of lawsuits over hiring decisions.

With the bill’s demise, housing providers can continue to conduct background checks without the additional procedural steps and litigation exposure the measure would have imposed.