Consider the Fair Chance Act When Hiring for Your Business

It is estimated that 70 million Americans have a criminal record. Since they have a record, many of these offenders have limited options when it comes to employment. By considering the Fair Chance Act, employers can help those who have made mistakes in their past by integrating them into society. This increases the chance that the offender is able to make positive changes and decreases the rate of recidivism. 

More businesses, both small and large, are realizing that qualified candidates make great candidates, and those with a criminal record deserve consideration for open job positions. 

Background Check Results

Most employers use background checks as part of their hiring process. Criminal records can exclude certain employees from gaining a job. It is worth noting that a criminal record only says that a conviction occurred, and the candidate should be given a chance to explain their offense. 

For example, an applicant who shows a bankruptcy in the background check should be able to give reasons as to why and when this occurred, as well as the steps that were taken to improve the situation. All background checks need to be in FCRA compliance (Fair Credit Reporting Act), which gives a potential hire a fair chance at being hired for a job. 

What is the Fair Chance Act?

The United States recently passed legislation that protects job applicants with a criminal history. The ‘Ban-the-Box’ Law, which goes into effect on December 20, 2021, limits federal contractors from making criminal background inquiries before a conditional job offer has been made. In addition, the employer cannot state that a criminal history would disqualify an applicant from employment prior to application. This new act was part of the annual National Defense Authorization Act this past December. 

Employers need to make sure they are compliant with the law by the time it goes into effect next year. For an employer that is not compliant with the Fair Chance Act, penalties for violation escalate from a written warning to a suspension of payment on a contract until compliance is demonstrated. 

Fair Chance Practices

Fair Chance hiring means that employers do not ask questions about conviction or criminal history before a conditional offer has been made or consider information about arrests not followed by convictions or convictions that have been dismissed or expunged. 

After offering the job to a candidate, the employer still can conduct a criminal background check, but should consider the nature of the criminal history and the time that has passed since it occurred. This should be done on an individual basis, as opposed to a blanket statement that the company does not hire anyone with a criminal record. This individualized assessment should be conducted given the nature of the job and its responsibilities. 

States and counties have different legal requirements regarding criminal background checks. Some components of the Fair Chance Act might reflect state or local legal requirements as well so it is up to the employer how to best comply in their policies. 

Ban-the-box laws affect many areas of the hiring process so human resource managers should review and revise their hiring practices, application forms, and policies to makes sure they are compliant. Employers need to offer training for those who handle recruiting and hiring to make sure they fully understand the law and how it affects the business once it goes into effect. Employers must also adhere to the FCRA (Fair Credit Reporting Act) if they plan to get criminal history reports on a potential candidate. 



Benefits for the Employer

As of July 2019, 34 states passed ban-the-box or fair chance laws. Second-chance hiring, or hiring people with criminal backgrounds, is building momentum among employers. Many employers who follow the Fair Chance Act find that they benefit as well:

  • Help create jobs in the community, especially ones with a high rate of crime.
  • Enjoy the benefits of a loyal workforce that is grateful for a second chance and the opportunity to work.
  • Higher retention rates among employees with criminal records, who are less likely to quit a job once they have it. This further benefits the company by saving money on employee turnover costs. 

This new law has an effect on companies as they prepare for its implementation in 2021. Companies should begin to review their hiring practices and make any necessary changes to reflect the changes as outlined by the law in order to give those with a criminal background a fair chance at employment so they are completely prepared once the law goes into effect. The experts at DataCheck can help you with your Fair Chance Act questions when hiring.