What Is Fair Chance Hiring? A Guide for Small Businesses
By Eddy Team — October 22, 2024
Fair chance hiring is designed to give equal opportunity to all qualified candidates, regardless of their previous arrests or conviction records.
Formerly incarcerated people have some of the highest unemployment rates in the country at over 27%—more than the total unemployment rate during the COVID pandemic in 2020 or the Great Depression.
These people, sometimes called second-chance candidates or second-chance employees, face significant barriers to employment because of systemic bias in traditional hiring practices. Initiatives, like Ban the Box legislation and the Fair Chance Act, are helping employers reform the hiring process.
What Fair Chance Hiring Regulations Should You Know About?
In the United States, the Equal Employment Opportunity Commission enforces laws that prevent workplace discrimination, including discrimination against formerly incarcerated people. Legal protections for second-chance employees exist on both the federal and state levels.
Federal Fair Chance Act
The Fair Chance to Compete for Jobs Act of 2019 is currently the only federal protection in place for fair chance hiring. It prohibits federal agencies from requesting criminal record information from candidates before extending a conditional job offer. The act is designed to help second-chance employees obtain employment.
Ban the Box Initiatives and Local Fair Chance Acts
Many states or smaller jurisdictions have their own fair chance laws that offer further opportunities to second-chance employees. Ban the Box is a popular name for many of these regulations.
Ban the Box initiatives are named after the checkboxes on hiring applications that ask whether a candidate has ever been convicted of a crime. These boxes introduce bias into the hiring process, and bans are designed to delay disclosure of criminal history until after a candidate’s qualifications have been evaluated.
Currently, 37 states have some type of Ban the Box laws or Fair Chance Act in place. Many cities have their own additional regulations. These laws may require employers to:
- Remove questions about criminal history from applications.
- Delay or prevent questions about criminal history during the interview process.
- Delay background checks until later in the hiring process.
- Disregard certain criminal history after an allotted time has elapsed.
- Allow applicants to contest criminal record content.
- Allow applicants to appeal the denial of employment.
Employment law is an ever-evolving landscape, and more states or cities may have laws in the future, so you should always stay up to date on your local regulations.
Penalties for Violating Fair Chance Hiring
Penalties for violating fair chance hiring regulations vary based on the jurisdiction, but all violations are subject to civil penalties. Penalties may include fines from regulatory organizations or trigger lawsuits from candidates.
Legal penalties are not the only consequences companies can face for violating fair chance hiring standards. Organizations may suffer consequences to their business relationships, employee morale, or company reputation.
How Do Companies Benefit from Fair Chance Hiring?
Fair chance hiring doesn’t just benefit potential employees; it benefits companies as well. These benefits can be especially impactful in small businesses where even a single employee or minor process change can make a difference.
Larger Talent Pool
More than 70 million people in the United States have a criminal record—roughly the same as the number of people who hold four-year degrees. When you rely on fair chance hiring methods, you open up this wider talent pool to recruit from. In today’s competitive job landscape, this gives your organization greater opportunity to find top talent.
Improved Diversity
Fair chance hiring opens the door to a more diverse candidate pool. Creating a well-rounded workforce can benefit your business by improving creativity and problem-solving capabilities. By bringing different perspectives and experiences together, your employees can learn from one another and foster an innovative work environment.
Company Image
Hiring practices aren’t only about finding the right candidate but also how companies market their image. Fair chance hiring practices appeal to certain consumers and potential top candidates who aren’t second-chance hires. They also inspire loyalty in employees who share your values. You can craft your company image and project your values when you advertise and engage in fair hiring practices.
Tax Incentives
The federal government offers tax incentives for companies that hire certain types of individuals who face barriers to employment, including qualified ex-felons. The Work Opportunity Tax Credit gives your business monetary benefit for employing second-chance employees, which can reduce the financial cost of staffing.
How Can Businesses Implement Fair Chance Hiring Practices?
If you want to implement fair chance hiring practices, you have the opportunity at every stage of recruitment. These processes will keep you aligned with legal requirements, help you find the most qualified candidates for your roles, and set up all new employees for success.
Pre-Hiring Stage
Before you even start the hiring process, you can partner with fair hiring and second-chance organizations to coordinate your efforts. They can provide education resources, candidate sourcing, and hiring guidelines.
As you begin recruitment efforts, you should also ensure your HR personnel and hiring managers understand fair hiring practices. Their education should include information on legal requirements, clear guidelines on your hiring processes, and alignment on company values.
Application Stage
Many of the basic requirements of fair chance hiring happen at the application stage. According to legal regulations and standard fair chance practices, you should:
- Remove criminal history questions from applications
- Delay background checks until after a conditional offer has been made
This removes both blatant and unintentional bias from the application process, giving all candidates a fair chance to showcase their qualifications.
Other parts of the application or job description can act as positive recruitment messaging for candidates about fair hiring practices. To communicate to these types of candidates, you can include an equal opportunity statement or information on your fair hiring initiatives.
Interview Stage
Avoid asking direct or leading questions about criminal backgrounds at the interview stage. Certain discriminatory questions can open your organization up to lawsuits—but they also create an environment where second-chance candidates are put at a disadvantage. Learn more about conducting compliant interviews and potential questions to stay away from in Eddy’s interview guide.
Rather than focusing on personal stories (or even potential resume gaps), rely on skills-based interviews and assessments to evaluate candidates. This gives candidates equal opportunity to show their capabilities. Second-chance candidates also benefit from discussions about transferable skills and potential. They likely have a lot to offer, even if they don’t have the exact direct experience other candidates might.
Onboarding Stage
When you are ready to make an offer and onboard a new employee, you can still do more to bolster your fair chance hiring efforts.
Many legal requirements say that once you’ve extended a conditional offer, you can then perform and evaluate a background check. A platform like Eddy can help you with compliant background checks at this stage.
Fair chance hiring principles say that you should not automatically revoke an offer based on information in a background check. You should only consider relevant convictions and allow the candidate to amend incorrect records or prove rehabilitation.
When a new second-chance employee is onboarded, you should also treat them with respect, like you would with any other employee. Provide them proper training and support as needed, and foster an inclusive environment where they can flourish.
How Does HR Software Help with Fair Chance Hiring?
Fair chance hiring benefits both candidates and employers by giving everyone an equal opportunity to showcase their skills and qualifications. An HR software simplifies all of your hiring processes and ensures you stay compliant with legal regulations.
Learn how Eddy makes hiring easy and request a demo today.
What Is Fair Chance Hiring? A Guide for Small Businesses
By Eddy Team — October 22, 2024
Fair chance hiring is designed to give equal opportunity to all qualified candidates, regardless of their previous arrests or conviction records.
Formerly incarcerated people have some of the highest unemployment rates in the country at over 27%—more than the total unemployment rate during the COVID pandemic in 2020 or the Great Depression.
These people, sometimes called second-chance candidates or second-chance employees, face significant barriers to employment because of systemic bias in traditional hiring practices. Initiatives, like Ban the Box legislation and the Fair Chance Act, are helping employers reform the hiring process.
What Fair Chance Hiring Regulations Should You Know About?
In the United States, the Equal Employment Opportunity Commission enforces laws that prevent workplace discrimination, including discrimination against formerly incarcerated people. Legal protections for second-chance employees exist on both the federal and state levels.
Federal Fair Chance Act
The Fair Chance to Compete for Jobs Act of 2019 is currently the only federal protection in place for fair chance hiring. It prohibits federal agencies from requesting criminal record information from candidates before extending a conditional job offer. The act is designed to help second-chance employees obtain employment.
Ban the Box Initiatives and Local Fair Chance Acts
Many states or smaller jurisdictions have their own fair chance laws that offer further opportunities to second-chance employees. Ban the Box is a popular name for many of these regulations.
Ban the Box initiatives are named after the checkboxes on hiring applications that ask whether a candidate has ever been convicted of a crime. These boxes introduce bias into the hiring process, and bans are designed to delay disclosure of criminal history until after a candidate’s qualifications have been evaluated.
Currently, 37 states have some type of Ban the Box laws or Fair Chance Act in place. Many cities have their own additional regulations. These laws may require employers to:
- Remove questions about criminal history from applications.
- Delay or prevent questions about criminal history during the interview process.
- Delay background checks until later in the hiring process.
- Disregard certain criminal history after an allotted time has elapsed.
- Allow applicants to contest criminal record content.
- Allow applicants to appeal the denial of employment.
Employment law is an ever-evolving landscape, and more states or cities may have laws in the future, so you should always stay up to date on your local regulations.
Penalties for Violating Fair Chance Hiring
Penalties for violating fair chance hiring regulations vary based on the jurisdiction, but all violations are subject to civil penalties. Penalties may include fines from regulatory organizations or trigger lawsuits from candidates.
Legal penalties are not the only consequences companies can face for violating fair chance hiring standards. Organizations may suffer consequences to their business relationships, employee morale, or company reputation.
How Do Companies Benefit from Fair Chance Hiring?
Fair chance hiring doesn’t just benefit potential employees; it benefits companies as well. These benefits can be especially impactful in small businesses where even a single employee or minor process change can make a difference.
Larger Talent Pool
More than 70 million people in the United States have a criminal record—roughly the same as the number of people who hold four-year degrees. When you rely on fair chance hiring methods, you open up this wider talent pool to recruit from. In today’s competitive job landscape, this gives your organization greater opportunity to find top talent.
Improved Diversity
Fair chance hiring opens the door to a more diverse candidate pool. Creating a well-rounded workforce can benefit your business by improving creativity and problem-solving capabilities. By bringing different perspectives and experiences together, your employees can learn from one another and foster an innovative work environment.
Company Image
Hiring practices aren’t only about finding the right candidate but also how companies market their image. Fair chance hiring practices appeal to certain consumers and potential top candidates who aren’t second-chance hires. They also inspire loyalty in employees who share your values. You can craft your company image and project your values when you advertise and engage in fair hiring practices.
Tax Incentives
The federal government offers tax incentives for companies that hire certain types of individuals who face barriers to employment, including qualified ex-felons. The Work Opportunity Tax Credit gives your business monetary benefit for employing second-chance employees, which can reduce the financial cost of staffing.
How Can Businesses Implement Fair Chance Hiring Practices?
If you want to implement fair chance hiring practices, you have the opportunity at every stage of recruitment. These processes will keep you aligned with legal requirements, help you find the most qualified candidates for your roles, and set up all new employees for success.
Pre-Hiring Stage
Before you even start the hiring process, you can partner with fair hiring and second-chance organizations to coordinate your efforts. They can provide education resources, candidate sourcing, and hiring guidelines.
As you begin recruitment efforts, you should also ensure your HR personnel and hiring managers understand fair hiring practices. Their education should include information on legal requirements, clear guidelines on your hiring processes, and alignment on company values.
Application Stage
Many of the basic requirements of fair chance hiring happen at the application stage. According to legal regulations and standard fair chance practices, you should:
- Remove criminal history questions from applications
- Delay background checks until after a conditional offer has been made
This removes both blatant and unintentional bias from the application process, giving all candidates a fair chance to showcase their qualifications.
Other parts of the application or job description can act as positive recruitment messaging for candidates about fair hiring practices. To communicate to these types of candidates, you can include an equal opportunity statement or information on your fair hiring initiatives.
Interview Stage
Avoid asking direct or leading questions about criminal backgrounds at the interview stage. Certain discriminatory questions can open your organization up to lawsuits—but they also create an environment where second-chance candidates are put at a disadvantage. Learn more about conducting compliant interviews and potential questions to stay away from in Eddy’s interview guide.
Rather than focusing on personal stories (or even potential resume gaps), rely on skills-based interviews and assessments to evaluate candidates. This gives candidates equal opportunity to show their capabilities. Second-chance candidates also benefit from discussions about transferable skills and potential. They likely have a lot to offer, even if they don’t have the exact direct experience other candidates might.
Onboarding Stage
When you are ready to make an offer and onboard a new employee, you can still do more to bolster your fair chance hiring efforts.
Many legal requirements say that once you’ve extended a conditional offer, you can then perform and evaluate a background check. A platform like Eddy can help you with compliant background checks at this stage.
Fair chance hiring principles say that you should not automatically revoke an offer based on information in a background check. You should only consider relevant convictions and allow the candidate to amend incorrect records or prove rehabilitation.
When a new second-chance employee is onboarded, you should also treat them with respect, like you would with any other employee. Provide them proper training and support as needed, and foster an inclusive environment where they can flourish.
How Does HR Software Help with Fair Chance Hiring?
Fair chance hiring benefits both candidates and employers by giving everyone an equal opportunity to showcase their skills and qualifications. An HR software simplifies all of your hiring processes and ensures you stay compliant with legal regulations.
Learn how Eddy makes hiring easy and request a demo today.
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