What is Fair Chance Hiring and How Does It Impact Your Business?

In June of 2021, Louisiana legislation passed Act No. 406 effectively implementing fair chance hiring for the state. This law follows the rising trend with many other cities and states giving protection to applicants with prior convictions. Heath Lundy, HR Business Partner, explains everything you need to know about fair chance hiring, and how it can impact your business.

What is fair chance hiring?

All employers must operate under hiring restrictions set forth by the Equal Employment Opportunity Commission (EEOC), which includes avoiding hiring practices that discriminate against employees or applicants. There are many protected characteristics including race, color, religion, sex (including gender identity, sexual orientation, and pregnancy status), age, national origin, disability status, or genetic information.

Outside of these characteristics, there are many other groups that some scholars and professionals believe should be protected as well. One of these includes employees or applicants with prior convictions.

Fair chance hiring is this idea that formerly incarcerated applicants and employees should be given a fair opportunity to apply to roles for which they are qualified. There are many professional and non-profit organizations that provide great insight on fair chance hiring; one of the most popular is Ban the Box.

What is the importance of fair chance hiring?

Fair chance hiring is important on many accounts, but there are two main reasons employers and HR professionals should be paying attention to fair chance hiring right now.

First, as employers, we are all looking for the best possible talent. Having a general “no prior convictions” rule for applicants can cause you to lose good candidates before you’ve even seen their resume. An applicant’s prior conviction history does not prevent them from being a great employee at your business.

Another good reason to limit your knowledge of convictions before hiring is that there is a higher number of formerly incarcerated people of color. If conviction status causes indirect discrimination by eliminating applicants of color, there could be a case for race or color discrimination which is something that is protected by the EEOC.

What are the laws surrounding fair chance hiring?

The Fair Chance to Compete for Jobs Act of 2019 is a federal law that prohibits federal employers and federal contractors from inquiring about conviction history until a conditional offer has been made. The law includes complaint and appeal procedures for employers that violate the policy. Other than this, there are currently no federal fair chance hiring laws for private employers that are not federal contractors.

Thirty-six states, the District of Columbia, and over 150 cities and counties have adopted fair chance hiring laws. In Louisiana, that law is called Act 406.

What is Act 406 (Louisiana)?

In June 2021, Louisiana legislation passed Act No. 406, which applies to any business conducting background checks on candidates before being offered a position.

Act 406 covers many points including:

  • Prohibits employers from inquiring about or considering arrest records or charges not resulting in a conviction.

  • Authorizes applicants (upon written request) to obtain any background checks utilized by employers during the hiring process.

  • Requires employers to make individualized assessments of whether an applicant’s criminal history record has a direct and adverse relationship with the specific duties of the job that may justify denying the applicant the position. The following factors must be assessed in arriving at this decision:

    • The nature and gravity of the offense or conduct;

    • The time that has elapsed since the offense, conduct or conviction; and

    • The nature of the job sought.

The process of elimination based on convictions should be well-documented and a policy should be in place to be sure all candidates are treated equally.

Heath says there is an example she uses often for her clients. “Let’s say you have a labor position open. The position reports daily on a job site and does general labor in a work yard, perhaps operating forklifts, building parts, etc. Let’s also say you have a policy against hiring any formerly incarcerated candidate. If you get a candidate that had a conviction based on personal tax evasion and eliminate them from the running for this role, that may violate Louisiana Act 406, because a personal tax evasion conviction most likely has nothing to do with being a laborer in a work yard.”

“On the opposite side of the spectrum, let’s say you are a bank that has an open teller position and you eliminate a candidate that had a prior conviction for financial crimes (laundering, theft, etc.) in the last few years, that disqualification would likely be fine. This scenario could change based on the severity of and time elapsed since the crime was committed.”

How is employee safety impacted when an employee with violent records is involved?

One of the most concerning convictions to employers are those regarding drugs or violence. This is an understandable and justified concern. As much as we have a responsibility to give candidates a fair chance, we have a responsibility to protect our employees, clients, and customers that will be in contact with that new hire.

In situations like these, looking at the role and the actual level of risk would be important. Asking how much contact this position has with other people could be the first step. Heath suggests taking a very close look at the time elapsed since the crime and what the candidate has done since the crime was committed. Successfully completing anger management classes or a drug rehabilitation program can help to prove that there is no risk to current employees based on the candidate’s prior conviction.

How can HR professionals prevent their companies from discriminating against formerly incarcerated candidates?

HR professionals should advocate for fair chance hiring practices in their workplace. Being well-educated on the benefits of fair chance hiring and the risks of not complying with fair chance hiring laws will help you to convince business leaders that it’s the right way to go.

There is a social stigma about formerly incarcerated individuals, but one of the best ways to stop the cycle of incarceration is to stop the barrier to secure housing, gainful employment, and community acceptance. As HR professionals, we can help be the solution through educating our teams and being sure that all candidates get a fair chance at positions they apply for.

Staying on top of labor laws doesn’t need to be your top priority – it’s ours! We stay on top of all things HR so you don’t have to. Contact us today to set up a consultation and find out how HR can boost your business!

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