The unemployment rate is hitting an all-time low. In response, many employers are getting creative with their hiring practices and considering alternate talent pools, including the 70 million Americans with an arrest or conviction on their criminal records, also known as “justice-involved people.” Ex-felons may have up to a 90 percent unemployment rate. Clearly then, this is a largely untapped group of candidates and organizations are taking more of an interest in examining their background check processes in an effort to leverage this potential source of talent. SHRM’s president and Chief Executive Officer Johnny C. Taylor, Jr. articulates, “It’s time to put an end to the stigma that holds back inclusive hiring and retire outdated employment practices. A criminal record should never be viewed as an automatic disqualification for employment.”
HR professionals have an opportunity to encourage and lead discussions with decision makers at their organizations and influence policy development or changes around hiring ex-offenders. According to a study conducted by SHRM and the Charles Koch Institute (CKI), 82 percent of managers and 67 percent of HR professionals feel that the “quality of hire” for workers with criminal records is about the same or higher than that of workers without records. Another 74 percent of both managers and HR professionals believe the cost of hiring individuals with criminal records is the same or lower than that of hiring individuals without criminal records. Finding employment for ex-offenders also has widespread benefits such as longer employment tenure, reducing recidivism, and improving public safety.
Although there may be some benefits to hiring ex-offenders, HR professionals should also be aware of the potential risks. For some organizations, hiring justice-involved candidates is not an option based on certain industry regulations, type of job, or the type of person with whom the employee will be working (e.g., vulnerable populations like children or the elderly). The potential for a negligent hiring claim is one of the most serious and common risks an employer faces when hiring ex-offenders. If an employer fails to carefully investigate an applicant’s work experience, character, criminal history, and other relevant information before hiring the employee, they could be held liable for negligent hiring if the employee ends up hurting someone else on the job in a way that relates back to their criminal conviction. Employers lose about 75 percent of negligent hiring cases, and average settlements in negligent hiring lawsuits average seven figures.
Employers also need to make sure they comply with Title VII of the Civil Rights Act of 1964 and corresponding guidance from the U.S. Equal Employment Opportunity Commission (EEOC) which states that arrests records in and of themselves should not be used as a basis for denying or terminating employment. To avoid EEOC scrutiny, employers should avoid automatic exclusions based on background check data and instead conduct an individualized assessment to determine whether any exclusion is job-related and consistent with business necessity (see detailed guidance below). Additionally, employers must be mindful of the proliferation of Fair Credit Reporting Act (FCRA) litigation and state and local “ban-the-box” legislation that restricts when an employer can make criminal history inquiries. “Ban-the-box” legislation typically removes the conviction history question from job applications and delays background checks until later in the hiring process. Currently, 31 states and over 150 cities and counties have adopted some form of ban-the-box legislation designed to require employers to consider a job candidate’s qualifications first without the stigma of a conviction or arrest record.
Below is some helpful guidance employers can use to remain compliant with the above and reduce risk in hiring ex-offenders.
Create a Targeted Screening Process
When assessing the criminal conviction records of applicants, the reviewer should consider the following three factors:
- Nature and gravity of the offense(s);
- The time that has passed since the conviction and/or completion of the sentence; and
- The nature of the job sought/held.
Although there are three separate factors, no one factor should necessarily govern the analysis. Rather, all three factors should be weighed together in making employment related decisions.
Nature and Gravity of the Offense(s)
The reviewer should consider the severity of the offenses on the subject’s record and the type of offenses committed. This analysis should include consideration of the circumstances of the offense(s) for which an individual was convicted as well as the number of the offense(s). Repeated offenses of the same or similar type tend to be more serious than isolated instances of criminal misconduct. The more serious the offense is, arguably, the more related to a business necessity it becomes to consider that conviction for not hiring an individual. This analysis necessarily requires the reviewer to evaluate the relative seriousness of various offenses. Convictions and/or arrests that may be of particular concern include, but are not limited to, those involving theft, dishonesty, controlled substances (i.e. drugs), damage to property, and/or violence.
The Time that Has Passed Since the Conviction and/or Completion of the Sentence
In general, the more time that has passed since an offense, the less relevant the offense becomes. Convictions older than seven years generally should not be considered, but each conviction must be analyzed on a case-by-case basis. However, some types of offenses may be serious enough that they might be relevant regardless of how distant in time they are.
Nature of the Job Sought
The third part of the analysis of a criminal background record requires the reviewer to consider the criminal record in the context of the job that is sought or held by the subject of the background check. Employment decisions should not be swayed by criminal convictions that are not job-related. For example, a record of driving offenses is relevant to a position that will require the applicant to drive on behalf of the Company, whether in a Company-provided vehicle or not. Conversely, such offenses would not be relevant where the position in question does not involve driving on behalf of the Company.
Conduct an Individualized Assessment
If the reviewer has made a preliminary assessment that an applicant or employee will not be hired or retained or otherwise will suffer an adverse employment action on the basis of a criminal background, the reviewer should then engage in an individualized assessment. As part of this assessment, the reviewer should provide the individual applicant/employee with a letter, which provides the applicant/employee with an opportunity to demonstrate that the exclusion based on the criminal background report should not be applied to him/her based on his/her particular circumstances. The organization will then assess whether any additional information provided by the applicant/employee warrants an exception to the exclusion before making a final determination, using the following factors:
- Individual’s showing that he/she was not correctly identified in the criminal record or that the record is otherwise inaccurate;
- Facts or circumstances surrounding offense or conduct;
- Number of offenses for which individual was convicted;
- Older age at the time of conviction, or release from prison (studies have shown that the risk of re-offending decreases with age);
- Length and consistency of employment history before and after the offense or conduct;
- Rehabilitation efforts, e.g., education/training;
- Employment or character references and any other information regarding fitness for the particular position; and
- Whether individual is bonded under a federal, state, or local bonding program.
Every organization must decide if and how it will approach hiring applicants with criminal records. HR professionals are well positioned to provide counsel and generate a tailored set of best-practice principles that will benefit both the business and the individuals seeking a second chance.
Importantly, continue to be mindful of federal and state laws that require you to engage in a particular notification and/or assessment process when dealing with criminal records. For example, the FCRA has a specific “adverse action” notice and response process that employers must follow when excluding an applicant on the basis of their background. Some “ban-the-box” legislation also features a similar process. And in addition, some states maintain their own versions of the FCRA. The suggestions in this article are designed to supplement, rather than meet or supplant, those legal obligations.
Employers Council can assist you with developing this approach for your organization as well as assist you with pre-employment screening services.