What Is Fair Chance Hiring? Meaning, Benefits, and How It Works for Employers

Fair chance hiring gives candidates with criminal records fair consideration, helping employers access loyal, diverse, and skilled talent. It strengthens compliance, lowers turnover, and helps build high performance teams without compromising workplace safety.

By Brad Nakase, Attorney

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Table of Contents

1. Introduction

2. What is Fair Chance Hiring?

3. Importance of Fair Chance Hiring

4. HR Compliance: Which Laws Encourage Fair Chance Hiring?

5. Four Main Advantages of Fair Chance Hiring

6. How to Include Fair Chance Recruitment in Your Hiring Procedure

7. Include Fair Chance Hiring Now

Introduction

Giving everyone an equal shot at employment, even those with criminal histories, is the goal of fair chance hiring. A third of those discharged from federal correctional facilities are unable to obtain jobs, and total employment rates don’t rise above 40%, according to figures from the Bureau of Justice Statistics. The majority of people, in simpler terms, do not find stable work.

Additionally, a sizable section of the labor population is being excluded if individuals with criminal records are automatically screened out. One in three adults, or over 77 million people, have some kind of criminal history, from felony convictions to arrests.

However, research shows how hiring individuals with records helps businesses. According to most HR professionals, these employees perform their jobs as well as or better than comparable employees, and they are equally as dependable as or more dependable than those who have no records. Additionally, hiring them costs around the same.

In what ways, then, could companies strike a balance between compliance, inclusive recruiting, and safeguarding their employees and the company? The solution is fair chance hiring. To further understand how expanding your talent pool can benefit your company and how to strike a balance between inclusivity and safeguarding your employees and business, we asked one of our partners in background check solutions.

What is Fair Chance Hiring?

The foundation of fair chance recruitment is the idea that people with criminal records should be fairly evaluated for a position for which they are competent.

Fair chance hiring means that companies consider a candidate’s skills and credentials instead of their criminal record/history. The precise laws vary at the state, municipal, and federal levels.

Importance of Fair Chance Hiring

Due to unjust prejudice, people with criminal histories frequently struggle to get employment. Fair chance hiring acknowledges this. The majority of organizations, however, continue to defend their discriminatory practices against those who have been adversely affected by the judicial system and those who have served time in prison, putting them at risk of discrimination lawsuits.

In fact, because racial minorities are in jail at significantly higher rates in the United States, denying employment to Americans with criminal histories disproportionately affects racial minority candidates.

The Sentencing Project reports that Latinx individuals spend time in jail at a rate of 1.3 times that of White individuals, and Black individuals are imprisoned in state-run jails at a rate that is almost five times higher.

In addition, incarceration rates for Native Americans are as much as seven times higher in jurisdictions with larger Native American populations than for White people.

Many employers today ask, “What is Fair Chance Hiring?” It is a hiring approach that ensures candidates with criminal records are considered based on their skills, not just their past.

HR Compliance: Which Laws Encourage Fair Chance Hiring?

Many regulations, ranging from laws to incentives, require or promote companies to use fair chance hiring methods.

1. Ban the Box

Background checks are postponed till later in the recruitment procedure, and companies are not allowed to inquire about a candidate’s criminal record on a job registration under “Ban the Box” laws. The “box” is the yes/no option that many businesses used to include on their job applications when they asked if a candidate had previously been guilty of a crime.

The very first state to implement Ban the Box laws was Hawaii in 1998. Ban the Box laws are currently in effect in around 150 towns and counties, 37 states, and Washington, D.C. Only employment in the public sector is covered by the laws in the majority of states.

The National Employment Law Project reports that regulations in 15 states, as well as 22 cities & counties, apply to private businesses.

2. The Fair Chance Act

Ban the Box laws have been extended by numerous jurisdictions throughout time, developing into what is known as Fair Chance regulation.

Federal agencies & contractors are prohibited by the Fair Chance to Compete for Jobs Law from asking about criminal histories in job postings, application queries, or interviews; inquiries regarding prior convictions are permitted only once a conditional offer has been made. But the Act isn’t applicable to jobs where the law mandates a background check.

The United States Office of Personnel Management completed regulations pertaining to the Act in 2023, which included a complaint procedure for candidates/applicants. OPM outlines sanctions for federal workers who breach the Act, including warnings in writing and unpaid suspensions.

Fair chance employment is also governed by a number of local laws. For instance, companies must first perform an initial screening to weed out unqualified applicants before conducting criminal background investigations in accordance with Seattle’s Fair Chance Employment law. Additionally, employers must maintain the position available for a minimum of two business days and provide the applicant an opportunity to clarify or amend any criminal background information.

Potential candidates who will have unattended access to minors younger than sixteen or vulnerable individuals are exempt from both Seattle’s law and Washington state’s Fair Chance Act. The criminal history clause of the Washington statute/law does not apply to law enforcement departments, financial institutions, or other companies that are compelled or authorized, under the law, to consider the criminal history of a job candidate in their decision-making process.

3. The Equal Employment Opportunity Commission

The Equal Employment Opportunity Commission provides specific enforcement guidelines related to fair opportunity recruitment, although Title VII (Civil Rights Act) does not explicitly afford protection/safety to individuals with criminal records:

Title VII is violated when someone is denied employment based only on an arrest history.
A criminal conviction does not, however, automatically bar someone from employment.
It has to be “job-related regarding the position as well as compatible with business need” to reject an applicant on the basis of their criminal history.

The following elements sum up the EEOC’s reasoning for each of these recommendations:

Both race & national origin are discriminated against in the American legal system.
Errors occur in criminal record files, which aren’t always updated.
Some employers may immorally utilize criminal records to further discriminate against people based on their race/ethnicity, whether purposefully or inadvertently.

HR leaders often wonder, “What is Fair Chance Hiring and how does it align with Ban the Box or the Fair Chance Act?” The answer lies in balancing compliance with inclusive hiring.

4. Work Opportunity Tax Credit

A tax credit scheme (federal) called the WOTC (Work Opportunity Tax Credit) is accessible to companies that recruit members of ten certain groups, including eligible ex-felons. By lowering tax obligations and promoting more welcoming and encouraging workplaces, WOTC helps enterprises.

Four Main Advantages of Fair Chance Hiring

Fair chance hiring goes beyond only combating prejudice and discrimination when it comes to hiring someone with a criminal past. It’s beneficial for the company as well.

The following are some of the main advantages of fair chance hiring:

More diverse and skilled applicants are found in the talent pipeline of companies that use fair chance hiring.
Increased engagement levels: Fair chance personnel perform more than 30% better than other staff members on loyalty and engagement metrics.
Decreased attrition: According to recent research, workers with criminal histories are more devoted to their companies. Additionally, executives who have employed fair chance personnel had only positive things to say about them, according to a new survey. Fair chance talent is said to maintain positive relationships with supervisors and staff members, which facilitates employee retention and lowers turnover expenses for the company.
Increased diversity in employment: Recruiting diversely is a key component of hiring equitably. For example, in a research that contrasted applicants with and without criminal records (a felony narcotic conviction that entails jail time), seventeen percent of white candidates with a record were called again after a job interview, whereas only five percent of Black applicants with a history received so much. The impact of having a criminal history is forty percent higher for Black people than for white people (as per the study’s author).

By recognizing the unfair/unequal playing field and providing equal opportunities to all applicants, particularly via diversity & belonging initiatives, organizations can address a systemic injustice while pursuing both immediate and long-term financial results.

How to Include Fair Chance Recruitment in Your Hiring Procedure

Even for people with hiring & DEI experience, it might be difficult to look past a criminal record. Here are some ideas for gaining support for fair opportunity hiring policies from all members of your company.

Understanding “What is fair chance hiring?” also means recognizing the benefits: stronger employee loyalty, lower attrition, and a more diverse talent pool.

1. Learn for Yourself and Your Group

Make sure your managers and hiring staff are aware of the difficulties faced by people with criminal histories. Sharing the aforementioned statistics and going over the EEOC’s recommended procedures for hiring and screening individuals with criminal histories are two examples of how to get started. These procedures include:

Educating hiring & management personnel on Title VII
Removing the general prohibitions against those with criminal records of any kind
Removing the conviction-related questions from job applications
Creating evidence-based procedures and processes to screen candidates and staff members with criminal histories
Asking only about an individual’s criminal history when it is directly relevant to the position or required for the operation
Maintaining the privacy of all candidate information

2. Consider the Candidate’s Potential

Due to discrepancies in their resumes, many people who have served time in prison may need further onboarding or retraining. One of the greatest ways to remove prejudice in hiring is to use a skills-based exam to move the focus to candidates’ ability and willingness to succeed on the job.

Assess each applicant’s record in light of the role’s particular requirements.

Three criteria, known as the “Green” considerations, are listed by the EEOC to determine whether a candidate’s prior criminal activity has relevance to the position:

The type and seriousness of the transgression or behavior
The amount of time after the offense, behavior, and/or sentence is completed
The type of work that is held or desired

Leo (who is a Black guy) has a 20-year history of misdemeanor assault convictions. This is a prime instance from the EEOC. Since then, he has had a solid employment history and a college degree. But when a new business buys out his old one, the new proprietors fire Leo because of his criminal history without taking into account his excellent work at the company.

Leo’s new employer cannot fire him, according to the EEOC’s analysis of the Green criteria. Given his conviction and present position, he is factually suitable for his work, and his conduct demonstrates that their approach, which is predicated on the idea that individuals with records would be dangerous or unreliable employees, has no substance. However, Black folks like Leo who have strong beliefs would be disproportionately affected by the policy.

3. Raise a Conditional Offer

Give a candidate a written conditional offer for a job once you’ve evaluated their qualifications and determined they’re qualified for the post. Explain that if their criminal history is directly relevant to the job’s responsibilities, you will either confirm the offer of employment after a thorough background investigation or give them written notice that you plan to cancel it.

Tell the candidate that in the latter case, they will have a chance to demonstrate that the conviction background report is false or to present evidence of their rehabilitation. The request for review will be examined. A written decision either confirming the offer or withdrawing it will be made.

Comply with your state’s & city’s specific requirements to guarantee adherence to fair opportunity hiring laws. For example, businesses in New York City are required to keep the employment open for the full five business days after candidates respond to the background check.

So if you are still asking: “What is fair chance hiring?” it is a process where companies delay criminal history checks until later in the recruitment cycle and focus first on qualifications.

4. Help Individuals with Criminal Records, Including Those Who Have Been in Prison

Setting up individuals who have been harmed by justice for long-term achievement is the goal of fair chance hiring, which goes beyond the offer. Cost-effective assistance systems and a procedure for choosing qualified applicants are both included in the genuine second-chance concept.

Employers can find candidates for a position who lack a traditional job record by using a variety of sources, including in-prison education programs, second-opportunity staffing companies, or referral channels from government partners and nonprofit workforce groups.

In order to support employees, think about offering customized accommodations like flexible scheduling and transportation so they can meet their probation or parole officer. Even though a lot of companies have employee support programs, they’ve discovered that many individuals who have been harmed by the legal system have never used these services. To help employees reach their objectives, the most seasoned real second-chance firms have committed employees, such as life coaches, psychologists, and social workers.

The success of the real second-chance approach depends on treating these assistance programs as beneficial investments in individuals who are willing to put in the necessary effort and demonstrate that their worst errors don’t define them, rather than as expenses.

Use Technology to Promote Fair Chance Hiring

Look for capabilities that let you customize the selection procedure for every position so that more people are included rather than instantly excluded when selecting software to assist you with doing background checks.

For example, an efficient application enables hiring teams to establish parameters according to a job description or company model and filter out specific charges. Additionally, during a background examination, candidates might describe any rehabilitation and explain any transgressions. Furthermore, hiring teams have the option to select a filter that will not mark specific infractions as automatically disqualifying applicants.

Include Fair Chance Hiring Now

Now that you know “What is fair chance hiring?”, the next step is to integrate these practices into your recruitment process to tap into a wider, more committed talent base.

Adding fair chance employment to your hiring process opens up a whole new group of potential candidates. Besides the diversity of views and experience, the evidence shows that ex-offenders are serious and conscientious employees, perhaps even better than those who have never had any experience with the criminal justice system.

You can develop a high-performance workforce and be ready to shoulder the increasing workload of running a successful business by doing away with discrimination against those with criminal records in the hiring process.

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What Is Fair Chance Hiring? Meaning, Benefits, and How It Works for Employers

Introduction

What is Fair Chance Hiring?

Importance of Fair Chance Hiring

HR Compliance: Which Laws Encourage Fair Chance Hiring?

Four Main Advantages of Fair Chance Hiring

How to Include Fair Chance Recruitment in Your Hiring Procedure

Include Fair Chance Hiring Now

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