The Fair Chance Act: What You Need to Know

By Michael Klazema on 1/21/2020

Ban the box legislation isn’t new, but it has so far been limited to smaller geographical areas or governmental units. Thirty-five states and more than 150 cities and counties have passed laws or ordinances on fair chance employment. Until now, ban the box hasn’t made it to the national level—that will change in 2021 when the federal Fair Chance Act goes into effect. The law, which bans the box for federal contractors, will take effect on December 21, 2021.

The new ban the box law will apply to all businesses that do contract work with the federal government. Whenever these companies are hiring employees in connection with federal contracts, they are barred from asking questions about candidate criminal histories on the job application. As is customary with other ban the box legislation, the law also requires employers to delay their candidate background checks until after they have made a conditional offer of employment.

There are several exemptions to the Fair Chance Act. While all federal contractors must remove questions about criminal history from their job applications, certain federal contractors are permitted to conduct pre-offer criminal background checks if they meet exemption policies, including:

  • If other laws require them to do so

  • If the contract work would involve access to classified information or “sensitive law enforcement or national security duties.”

The Office of Personnel Management (OPM) is compiling a list of positions that will be exempt from the delayed background check policy. The Fair Chance Act requires the OPM to issue this list of additional regulations by April 2021.

The OPM must also devise a complaint and penalty process for dealing with contractors that violate the Fair Chance Act. Penalties may include written warnings, contract termination, or something else.

The law does not eliminate or take precedence over any other state or local background check laws. Since federal contractors rarely work exclusively with the federal government, they may be subject to additional background check legislation—including other ban the box laws—in the states, cities, or counties where they operate. These laws will continue to hold sway, and companies that work with the federal government must understand which laws they are required to obey.

The Fair Chance Act, which was signed into law in December 2019 as part of the National Defense Authorization Act, is the latest step toward nationwide ban the box policies. Most ban the box laws apply either to public employees or government contractors, but there is a growing wave of legislation aimed at passing these laws for private employers. Only time will tell if private employers will be barred from asking criminal history questions on the job application—or conducting pre-offer background checks—nationwide.

To learn more about fair chance legislation, read our Learning Center page on ban the box policies.

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