Beginning September 30, 2020, you have the option to submit declarations for apps that request access to location in the background. This gives you an opportunity to receive actionable feedback before the policy is fully enforced and enough time to make the right changes. If your app is impacted, you are notified on the App content page (Policy > App content > Sensitive App Permissions) in the Play Console to complete the permissions declaration form.
Beginning January 18, 2021, all new apps (first published after April 16, 2020) submitted to Google Play that access location in the background will need to be approved before they can go live.
Beginning March 29, 2021, all existing apps (first published before April 16, 2020) that access location in the background will need to be approved or app updates may be blocked and your app may be removed from Google Play.