How Fair Chance Hiring Benefits Businesses and Candidates

Fair chance hiring is an act in place to help give everyone a fair chance at getting a job. Today, between 70 and 100 million Americans have some type of criminal record, ranging from arrests to felony convictions. Whether convicted or not, these individuals often face significant stigma when trying to find employment or re-enter the workforce after serving a prison sentence. In fact, just having a criminal record can reduce an employer call-back rate by 50 percent. This points to serious bias in many businesses’ hiring practices.

Formerly incarcerated individuals have the most difficulty finding work due to employment bias. Yet, these people have the same aspirations and hopes as anyone else—they want to build a better life for themselves and provide for the people they love. This becomes impossible if they’re systematically shut out of the workforce before they can even try to re-establish themselves.

So how should organizations balance inclusive hiring with compliance and protecting their workforce and business? The answer: fair chance hiring.

We asked Checkr, one of our background check solution partners, to dive into how organizations can use fair chance hiring practices to build more diverse, equitable, and inclusive workplaces.

Below you can discover more about the Fair Chance Act and how opening the talent pool for hiring can help your business in many different ways. Read on to find out more.

What is the Fair Chance Act and How Does it Work?

• The Fair Chance Act is a law in place which prohibits most employers from asking candidates about past convictions until a conditional offer has been made. This gives prospective employees an equal opportunity at an open position.
• It’s not only at the interview stage either. Businesses can’t include inquiries into criminal records in job advertisements, the application questions, or at the interview stage.
• Forming part of the National Defense Authorization Act, the Fair Chance Act passed Congress on December 17, 2019. The ultimate goal of the Act is to ensure people with convictions have a fair chance to get a job. The Act, however, does not apply to roles where a background check is required by law.

What Is Fair Chance Hiring?

Fair chance hiring is built on the premise that everyone, regardless of their background, has the right to be fairly assessed for a role they’re qualified to fill. However, when it comes to marrying the principles of diversity, equity, and inclusion (DEI) with hiring, most organizations still feel justified in discriminating against a key diversity group: formerly incarcerated and justice-impacted individuals.

There’s a tragic irony in this seemingly rational contradiction because refusing to hire Americans with criminal backgrounds has a disproportionate effect on racial minority applicants. This is because racial minorities are arrested and incarcerated at much higher rates in the U.S.

• Black people are incarcerated at more than five times the rate of white people (six times for drug charges).
• Black and Hispanic/Latinx people only make up approximately 32 percent of the general population in the U.S., yet they account for more than half (52 percent) of total people incarcerated.
• Black and indigenous people are arrested at twice the rate of white people—Black people only make up 13 percent of the total U.S. population and indigenous people just over one percent.

These statistics highlight how underlying racial bias in the criminal justice system gets compounded when applicants experience discrimination due to having been arrested or incarcerated.

This not only undermines DEI efforts but can become a compliance issue under Title VII of the Civil Rights Act. While Title VII doesn’t explicitly protect people with a criminal record, the Equal Employment Opportunity Commission (EEOC) is fairly unequivocal in its enforcement guidelines on this topic:

• Excluding people from a job solely because they have an arrest record violates Title VII.
• Being convicted of a crime is also not enough to disqualify someone from a job outright.
• Disqualifying someone from employment based on their criminal record has to be “job-related for the position in question and consistent with business necessity”.

The EEOC’s rationale behind each of these guidelines boils down to the following factors:

• The American justice system discriminates against race and national origin.
• Criminal record databases aren’t always kept up to date and contain errors.
• Whether overtly or unintentionally, employers can potentially use criminal records as a means of committing further racial and ethnic discrimination.

What Are the Benefits of Fair Chance Hiring Practices?

With fair chance hiring, employing someone with a criminal record isn’t just about fighting against bias and discrimination. It’s also good for business.

Here are some of the major benefits of fair chance hiring practices:

• Larger talent pool:  Businesses that practice fair chance hiring have more qualified and diverse candidates in their talent funnel.
• Higher rates of engagement:  At Checkr, fair chance talent outperforms other employees on scores of engagement and loyalty by over 30 percent.
• Reduced turnover:  Recent studies show employees with criminal records are more loyal to employers than others. And according to a recent survey conducted by Checkr, executives who have hired fair chance talent in the past year gave glowing reviews of these workers. They say fair chance talent sustains strong relationships with staff and managers, making it easier to retain employees and allowing the business to save on turnover costs.
• Increased diversity:  Hiring fairly  is  hiring diversely; in a study comparing applicants with a criminal record (a felony drug conviction involving prison time) to those without, 17 percent of white people with a record got called back after a job interview compared to only 5 percent of Black people with a record. The study’s author concludes, “the effect of a criminal record is…40 percent larger for [B]lacks than for whites”.

By acknowledging the unfair playing field and by giving all applicants an equal chance—especially through diversity and belonging initiatives—employers have the opportunity to right a systemic wrong while pursuing short- and long-term business outcomes.

How Can You Incorporate Fair Chance Hiring in Your Hiring Processes?

Seeing beyond a criminal record can be challenging for anyone, even those with experience in hiring and DEI. Here are a few suggestions to get everyone at your organization on board with fair chance hiring practices.

Educate yourself and your team.

When trying to implement fair chance hiring practices in your business, start by educating your recruiting team and managers on the challenges faced by individuals with criminal records. For example, you can start by sharing the statistics mentioned above and reviewing the EEOC’s best practices for screening and hiring people with criminal records.

These best practices include:

• Training anyone involved in hiring and management on Title VII.
• Eliminating across-the-board exclusions of people with any type of criminal record.
• Eliminating questions about convictions on job applications.
• Developing evidence-based policies and procedures for screening applicants and employees who have criminal records.
• Limiting any questions about a person’s criminal record to what’s strictly related to the job or necessary for the business.
• Keeping all applicant information confidential.

Focus on candidates’ potential.

Many previously incarcerated individuals will have gaps in their resumes and may require additional onboarding or training. Focus on the candidate’s aptitude and ability to perform on the job by conducting a skills-based assessment, which is a best practice for eliminating bias in hiring.

Evaluate each candidate’s record for the specific needs of the role.

The EEOC calls out three criteria (referred to as the “Green” factors) for determining whether or not someone’s past criminal conduct is relevant to the job:

• The nature and gravity of the offense or conduct
• The time that has passed since the offense, conduct, and/or completion of the sentence
• The nature of the job held or sought.

An example from the EEOC:  Leo is a Black man with a misdemeanor assault conviction dating back 20 years. Since that time, he’s earned a college degree and has a positive work history. However, when a new company buys out his employer, the new owners fire Leo based on his criminal record without taking his high performance at the company into account.

Based on the Green factors, the EEOC concludes that his new employer has no right to fire Leo. He’s both objectively qualified for his job and his behavior since his conviction and in his current position shows that there’s no basis for their policy, which is based on the belief that people with convictions would pose a risk or prove to be poor employees. Their policy  would, however, have a disparate impact on Black people with convictions, like Leo.

Look for Technologies that Support Fair Chance Hiring.

When choosing software to help you run background checks, look for features that help you fine-tune the selection process for each role, so you can include more people rather than automatically exclude them.

For example, Checkr allows hiring teams to filter out certain charges and set parameters based on a business model or job description, including giving candidates the opportunity to explain offenses and outline any rehabilitation that comes up during a background check. Hiring teams can also set a filter that wouldn’t flag certain offenses as an automatic disqualification.

Start incorporating fair chance hiring today with Checkr in BambooHR.

By incorporating fair chance hiring into your recruitment strategy, you’re opening an entirely new candidate pool. People with criminal records offer diversity in thought and experience, and statistics show that they are loyal, hard-working employees—perhaps more than those who have never encountered the criminal justice system.

Removing bias against people with criminal records in your hiring process will help you build a top-performing team, which is especially important in today’s competitive employment market, and equip you for the increasing demands of running a successful business.

Checkr’s mission is to build a fairer future by designing technology to create opportunities for all. Through the Checkr platform, customer education, and a non-profit arm,   Checkr.org, Checkr aims to break down the barriers of a background check and help companies reduce bias and establish fairer adjudication practices.