Federal Fair Chance Act Limits Criminal Background Checks for Job Applicants

The Fair Chance Act seeks to give ex-offenders released from prison and those with a past criminal conviction a better chance of obtaining employment with federal contractors and federal agencies by deferring any inquiry into a job applicant’s criminal history until a conditional job offer is extended. This follows a trend of “ban the box” laws that have been enacted in various states and localities.

How the Fair Chance Act Affects Employers

The Fair Chance Act “bans the box” by prohibiting federal contractors from inquiring about an applicant’s criminal background or obtaining it from other sources during the initial stages of the application process. Under the act, federal contractors may not request information relating to criminal history, verbally or in writing, for positions “related to work under [the] contract” before a conditional job offer is extended to the applicant. The act goes into effect on December 20, 2021.

There are exceptions to this prohibition, including positions related to law enforcement and national security duties, positions requiring access to classified information, and positions that, by law, require a federal contractor or the federal government to obtain criminal history information before extending a conditional job offer. The Office of Personnel Management (OPM) will issue regulations that comply with federal civil rights laws and has until April 2021 to identify additional excluded job positions, such as those that “involve interaction with minors, access to sensitive information or managing financial transactions.” The OPM has the responsibility for establishing a complaints procedure. There are various penalties for violating the act that ranges from written warnings for the first violation to suspension of payments under government contracts for subsequent violations.

Until the act goes into effect, federal contractors must continue to comply with state and local “ban the box” laws. This is a continuing and developing area of the law that employers should monitor for changes.

What Steps Federal Contractors Should Take to Comply with the Fair Chance Act

Employers should review and revise their hiring practices, application forms, checklists, policies and procedures to ensure their compliance with the Fair Chance Act. They should also provide training to employees involved in the recruiting and hiring process. Although the act does not take effect until December 2021, it is best practice to refrain from asking about criminal convictions until after a conditional offer of employment has been made. It is also important to review the obligations of the Fair Credit Reporting Act if an employer obtains an applicant’s criminal history from a third-party vendor.

To learn more about employer obligations for complying with the latest changes to federal, state, and local labor laws, as well as related posting requirements, check out our Labor Law Updates page.