How Fair Chance Hiring Can Benefit Your Business

Fair chance hiring is reshaping how employers approach background screening and talent acquisition. With over 70 million Americans having some form of criminal record, companies that embrace fair chance principles are discovering an untapped talent pool while contributing to stronger communities and reduced recidivism.

Whether you're responding to new legislation or proactively building an inclusive workforce, understanding fair chance hiring is essential for modern employers.

What is Fair Chance Hiring?

Fair chance hiring refers to policies and practices that give individuals with criminal records a fair opportunity to compete for jobs based on their qualifications. Rather than automatically screening out candidates with any criminal history, fair chance employers evaluate the whole person and consider whether past offenses are relevant to the position.

The movement is often associated with "ban-the-box" laws, which typically require employers to remove the criminal history checkbox from initial job applications and delay criminal background inquiries until later in the hiring process—usually after a conditional job offer.

The Growing Legal Landscape

Fair chance hiring laws have expanded rapidly over the past decade. Currently:

• 37 states and over 150 cities/counties have adopted ban-the-box policies for public sector employment
• 15 states and 22 cities/counties have extended these requirements to private employers
• Federal contractors must follow fair chance guidance under the Fair Chance to Compete for Jobs Act

Key jurisdictions with private employer requirements include California, New York, New Jersey, Illinois, Massachusetts, and major cities like Los Angeles, San Francisco, New York City, Philadelphia, and Chicago.

Common Fair Chance Law Requirements

While specific requirements vary by jurisdiction, most fair chance laws require employers to:

1. Remove criminal history questions from job applications
2. Delay background checks until after a conditional offer is made
3. Conduct individualized assessments rather than blanket exclusions
4. Consider specific factors such as the nature of the offense, time elapsed, and job-relatedness
5. Provide written notice before taking adverse action based on criminal history

"The question is not whether someone made a mistake in the past, but whether they're qualified for the job today and whether their history is relevant to the position." — EEOC Guidance on Arrest and Conviction Records

Business Benefits of Fair Chance Hiring

1. Access to a Larger Talent Pool

With roughly one in three American adults having some type of criminal record, automatic exclusions significantly limit your candidate pool. In a competitive labor market, fair chance hiring opens doors to qualified candidates you might otherwise miss.

2. Reduced Turnover

Research consistently shows that fair chance employees often have lower turnover rates than their peers. Studies by organizations like Johns Hopkins and the Society for Human Resource Management (SHRM) have found that employees hired through fair chance programs demonstrate strong loyalty and commitment.

3. Tax Incentives

Employers who hire individuals with criminal records may qualify for the Work Opportunity Tax Credit (WOTC), which can provide up to $2,400 per qualified hire. Some states offer additional incentives.

4. Reduced Legal Risk

Companies that implement fair chance practices aligned with EEOC guidance and local laws reduce their exposure to discrimination claims. Blanket exclusion policies can trigger disparate impact liability, while individualized assessment processes demonstrate good faith compliance.

The Individualized Assessment

A cornerstone of fair chance hiring is the individualized assessment—evaluating each candidate's criminal history in context rather than applying automatic disqualifications. The EEOC recommends considering:

• Nature and gravity of the offense — Was it violent? Property-related? Drug-related?
• Time elapsed — How long ago did the offense occur?
• Nature of the job — Does the offense relate to the position's duties and responsibilities?

Additional factors may include:

• Age at the time of the offense
• Evidence of rehabilitation (education, training, employment history)
• Character references
• Circumstances surrounding the offense

Implementing Fair Chance Hiring: Best Practices

1. Update Your Application Process

Remove criminal history questions from initial applications. If you operate in multiple jurisdictions, consider adopting the most restrictive requirements company-wide for consistency.

2. Train Hiring Managers

Ensure everyone involved in hiring understands fair chance requirements and how to conduct individualized assessments. Document training to demonstrate compliance efforts.

3. Develop Clear Policies

Create written policies that outline when background checks are conducted, how criminal history is evaluated, and the factors considered in individualized assessments.

4. Partner with the Right Screening Provider

Work with a background screening company that understands fair chance requirements and can provide reports that support compliant decision-making.

5. Review Your Disqualification Criteria

Examine any automatic disqualifications in your hiring process. Are they based on legitimate business necessity? Are they applied consistently? Consider replacing blanket exclusions with position-specific criteria.

Balancing Safety and Opportunity

Fair chance hiring doesn't mean ignoring criminal history—it means evaluating it thoughtfully. Employers can and should:

• Consider offenses that directly relate to job duties (e.g., theft convictions for positions handling money)
• Comply with industry-specific requirements (e.g., healthcare, childcare, financial services)
• Factor in recency of offenses
• Look for patterns versus isolated incidents

The goal is to avoid excluding qualified candidates unnecessarily while maintaining appropriate standards for positions where specific criminal history is legitimately job-related.

State-Specific Considerations

Fair chance laws vary significantly by jurisdiction. Key differences include:

• When inquiries are permitted: Some laws allow criminal history questions at the interview stage; others require waiting until conditional offer
• Employer size thresholds: Some laws only apply to employers with 5, 10, or 15+ employees
• Notice requirements: Time periods and content of required notices before adverse action
• Assessment factors: Some jurisdictions mandate specific factors that must be considered

Employers operating in multiple states should develop a compliance matrix and consider adopting uniform practices where practical.

How Clear Facts Solutions Supports Fair Chance Hiring

Clear Facts Solutions helps employers implement compliant fair chance hiring programs through:

• Compliant background reports tailored to fair chance requirements
• Adverse action management with proper timelines and documentation
• Multi-state compliance guidance for employers in multiple jurisdictions
• Individualized assessment support with relevant, position-specific information
• Ongoing compliance updates as laws change