Diversity & Inclusion

Risk or reward? Ex-offenders present challenge to employers

In a quest for workforce diversity, employers go to great lengths to reach out to people of various races, ethnicities, genders, ages, and backgrounds. But they’re not so likely to reach out to those who have spent time in prison. Yet employers often express a desire to be good corporate citizens that “give back” to their communities. Businessman chained to a large ball

So to hire someone once incarcerated for a crime represents a risk since ex-offenders may slip back into their old ways. But to hire people struggling to get back on their feet, support themselves and their families, and generally contribute to their community can be a risk worth taking, even rewarding for employers.

A May 7 news brief from the U.S. Department of Labor (DOL) reported that federal attorneys from around the country gathered at the U.S. Department of Justice to discuss how to help offenders transition to the outside world after being released from jail or prison.

DOL Secretary Thomas E. Perez urged the meeting participants to help ex-offenders take advantage of the job training and career counseling service made available through the DOL. “Helping individuals coming through the criminal justice system land on their feet is both a moral and economic imperative,” Perez said.

Why take the risk?

Besides helping an ex-offender become a productive citizen, employers potentially can realize tax benefits. The Work Opportunity Tax Credit (WOTC) is a federal tax credit given to employers for hiring people deemed to be a risk. That includes those recently released from prison. The program currently is on hiatus pending further action by Congress, but previously employers could realize a maximum $2,400 tax credit for each ex-felon hired.

The program also went on hiatus for 2014 but was reauthorized, and employers had until April 30, 2015, to submit WOTC certification requests for hires made during 2014. With the program being back on hiatus, state workforce agencies have been instructed to accept applications for new employees in the current WOTC target groups hired on or after January 1, 2015. Since the program is on hiatus, though, they must postpone final processing of the certification requests until further action by Congress.

Employers can lessen the risk associated with hiring ex-offenders through the Federal Bonding Program, which provides fidelity bonds to employers that hire ex-offenders as well as others classified as hard to employ. The program protects employers against employee dishonesty and is given to the employer free of charge.

The employer is able “to get the worker’s skills without taking any risk of worker dishonesty on the job,” according to a question-and-answer sheet from the DOL. The bond insures the employer for any type of stealing by theft, forgery, larceny, or embezzlement but does not cover poor workmanship, job injuries, or work accidents.

Employer cautions

Even employers that are willing to hire ex-offenders want to know a potential hire’s story. But since many employers are reluctant to hire anyone with a conviction or even arrest record, states and cities have begun to pass “ban the box” laws that prohibit employers from asking about criminal history in the initial stages of the hiring process. The idea behind the laws is to give people with criminal records a chance to show employers that they can be good employees before being automatically disqualified by checking a box on an employment application admitting to an arrest or conviction.

Although many employers are removing criminal history questions from applications either because of a law or because they don’t want to appear to disqualify someone because of criminal history, they will conduct background checks after an offer of employment. The Equal Employment Opportunity Commission (EEOC) has issued guidance for employers on the use of arrest and conviction records turned up through background checks.

A question-and-answer document from the EEOC outlines the potential legal hazards of using background reports on applicants and employees. The EEOC explains that there are two ways an employer’s use of criminal history information may be discriminatory: disparate treatment discrimination and disparate impact discrimination.

Disparate treatment discrimination occurs when employers treat job applicants or employees with the same criminal records differently because of their race, national origin, or another protected characteristic.

Disparate impact discrimination “means that, if criminal record exclusions operate to disproportionately exclude people of a particular race or national origin, the employer has to show that the exclusions are ‘job related and consistent with business necessity,’” according to the document.

The question-and-answer document explains that employers can show that excluding an applicant is job related and consistent with business necessity if it “(1) considers at least the nature of the crime, the time elapsed since the criminal conduct occurred, and the nature of the specific job in question, and (2) gives an applicant who is excluded by the screen the opportunity to show why he should not be excluded.”