Fair Chance Hiring Toolkit

Fair Chance Hiring Toolkit for Businesses 2021


ACKNOWLEDGMENTS This toolkit is a joint project between the Greater Oklahoma City Chamber and the Oklahoma County Criminal Justice Advisory Council (CJAC). The Chamber and CJAC would like to acknowledge the invaluable input from Moore Norman Technology Center, whose team members are helping make a difference for justice-involved individuals by equipping employers for vocational re-entry and justice-involved individuals for employment.


3....... Introduction 3....... Implications & Guidelines 4.......Employer Quick-Start Guide 5.......Tips for Hiring the Justice-Involved 6.......Legal Implications & Guidelines 7.......Compliance 8.......Case Studies / Hiring Justice- Involved Individuals 9....... Incentives and Support 9.......Federal Bonding Program 9.......Work Opportunity Tax Credit 11......Additional Resources for Employers 11......Community Support Programs 13.....Appendix •Department of Labor – Work Opportunity Tax Form

•IRS Pre-Screening Notice and Certification Request for the Work Opportunity Credit Form and Instructions


INTRODUCTION For any company, there are a variety of factors that impact their bottom line—sales, inflation, the political climate, the economy and even the availability of great workers. One of the biggest challenges facing businesses is a shortage of talent. While many businesses are beginning to recover from 2020 and there have been some major shifts in the job market, it still appears that availability of talent will be an emerging issue for some sectors of our regional economy. Between 2021 and 2035, the biggest group of working-age adults—those born in the U.S. whose parents were born in the U.S.—is expected to drop by 8% or 8.2 million workers according to PEW Research 1 . In the Greater Oklahoma City region, companies created 23,000 jobs between 2010 and 2017. During that same time, workforce participation decreased by 9,000 people. For our regional economy to continue to grow, we must continue to find new streams of talent to supply the demands of our regional companies. Finding good talent impacts your bottom line. A 2018 report by the Work Institute estimates that the average turnover costs associated with an employee leaving is 33% of their salary. 2 With the high cost of turnover and the growing need for talent in some sectors, some employers are now considering communities with potential barriers to employment that may have been overlooked in the past, including those who have a criminal background. Why should an employer consider hiring someone with a criminal background? An ACLU study suggests that compared to the general workforce, justice-involved individuals have lower turnover rates, lower absenteeism,

higher retention rates and higher loyalty 3. The resulting lower training and turnover costs allows your business to continue to grow and be successful. The Greater Oklahoma City Chamber strives to see Oklahoma City continue to become the home of ample, diverse talent and economic opportunity for all. Assisting employers by helping them to expand their potential talent opportunities is one way that we are working to achieve that goal. IMPLICATIONS & GUIDELINES Making the decision to be a fair-chance employer and hire justice-involved individuals is a significant step which requires careful reflection and understanding to ensure that your company has a solid understanding of the impact this decision will have. To ensure that you have all the facts before you begin, we’ve outlined some important legal and ethical implications that must be considered and properly implemented, to maximize the outcomes for both employer and those that you may hire from a justice- involved background. This toolkit is meant to serve as a resource and is not a substitute for legal advice when considering fair-chance or other hiring practices. You are encouraged to seek legal counsel to discuss specific situations and circumstances. 1 http://www.pewresearch.org/fact-tank/2017/03/08/ immigration-projected-to-drive-growth-in-u-s-working-age- population-through-at-least-2035/ 2 http://www.workinstitute.com/retentionreport20183 https:// www.aclu.org/sites/default/files/field_document/060917-trone- reportweb_0.pdf


EMPLOYER QUICK START GUIDE This will guide the employer through the components and questions of hiring justice involved individuals. For more in-depth information, see the Greater Oklahoma City Chamber Toolkit, or visit with a re-entry employment specialist.

SHOULD I employ justice involved? •Will your company’s culture support this individual’s endeavor? •Can I accommodate their constraints (parole check-ins, monitoring, etc.)? •Have you removed felony questions from your application? https://www.gettingtalentbacktowork.com How can I MIGATE loss concerns? •Hiring personnel that are proficient in background checks nuances •Employee applies for Federal bonding program https://www.ok.gov/oesc/job_seekers/federal_ bonding

WHERE do I find candidates? •https://okjobmatch.com •https://workreadyoklahoma.com •www.hirenetwork.org/content/oklahoma

What INCENTIVES are available? •WOTC- Work Opportunity Tax Credit (contact Oklahoma Employment Security Commission https://oklahoma.gov/oesc.html) •Partner with local CareerTech for affordable employee training HOW does this help my community? •Employment reduces recidivism, thus reducing local and state costs •Improve the local economy •Creates strong, able, contributing citizens and families

How does this BENEFITS employers? •Dedicated, loyal employee •Increased talent pool •Community service perception



Before posting a position, examine the culture of your organization. An employee that trusts their organization is willing to go the extra mile every single day. Think honestly about your organization. Do implicit biases exist? As the hiring manager or decision maker, reflect upon your own feelings about hiring someone with a background. Can you be fair and impartial? Can you be respectful and treat them as you would any other employee? Don’t set these new employees or your company up for failure. When you focus on intentionally developing your company’s culture, you are taking a necessary first step to building a foundation for success when hiring any employee—especially those that have been justice- involved. People-First Policies While policies are an essential component of any organization, there will be times where exceptions should be considered, and it is the responsibility of leadership to work with their team towards a solution. If an employee is continually having the same issue (tardiness, behavioral, etc.), address them one-on-one and try to get to the root cause. Perhaps there is a solution you can help provide that would assist in supporting your employee and give them a successful alternative. Finding the balance between written policies and non-written understanding helps put people first and sets your justice-involved employee up for success. Don’t just ask. Listen. One of the most difficult things to accomplish as a leader is to truly understand your team and their needs. It’s easy to send out a survey that asks for their thoughts, but what are you doing with the results? Language While we never want to downplay the seriousness of an offense, remember that those with backgrounds have served their time and are working hard to get back into a normal life. It’s important to show respect and support their dignity. Avoid using terms such as “criminal” or “offender” and instead opt for “justice-involved,” “re-entry employee” or “background involved.” Ideally, treat these potential employees as you would any other applicant. Interviewing It seems obvious, but it must be stated: NEVER ask someone if they have a criminal history during an interview. A gap of


several years in a work history may be indicated but allow them to broach that information. Remain neutral in both your verbal and non-verbal responses to such a disclosure. Application forms Your application process will be more inclusive if you “ban the box” or remove the question about felony charges or convictions from your application. Federal employers and federal contractor are prohibited from asking applicants about criminal convictions until a conditional job offer is made. Choose candidates for their merits and skills and have an open, respectful conversation about backgrounds when you offer the position. Allow them to share their experience and story. Background checks There is a right way and a wrong way to read background checks. “Charged” with a crime and “convicted” of a crime are very different. Work with a re-entry employment specialist or justice case manager to understand the terminology in a background report. Allow the applicant to share their experience and story. LEGAL IMPLICATIONS The choice to become a fair-chance employer implicates legal concerns both in terms of recruitment and in terms of employee and customer relations.

Whether an employer chooses to be a second-chance employer or not, company recruiters should be cognizant that hiring decisions that consider the criminal background of justice-involved candidates must be based upon individualized assessment. In other words, blanket policies that prohibit the hiring of justice-involved individuals are not legally permissible. Why? While 1 in 17 Caucasian men will spend time in prison at some point, the rate is 1 in 6 for Hispanic men and 1 in 3 for African-American men. As a result, blanket prohibitions on hiring justice-involved individuals have a disparate impact upon member of racial and ethnic minorities and can violate Title VII of the Civil Rights Act of 1964. At the same time, this individualized assessment should consider the nature of the work and customer care environment. Employers should be aware of federal and state hiring regulations that may impact the hiring of certain justice-involved individuals for particular positions. Beyond compliance with specific regulatory mandates, employers should also keep in mind potential liability for negligent hiring. Liability for negligent hiring can arise where an employee causes harm to another while in service to the employer and where the the specific danger resulting in injury. For example, if an employer knew that an employee had previously been convicted of assault and battery and the employee later assaulted a customer, the employer


could face liability for negligent hiring. Of course, such an analysis would consider the same factors that an employer should be weighing in any event when considering the background of a justice-involved individual. LEGAL GUIDELINES Second-chance employers should consider the following steps when weighing the hiring of justice-involved individuals:

Please consult your counsel if you have any questions about employment law. COMPLIANCE As with other hiring decisions, there are boundaries placed on employers when hiring individuals with a background in the justice system. The Equal Employment Opportunity Commission and the Fair Credit Reporting Act provide resources and guidance when making hiring decisions.

These resources should be utilized to maximize opportunities and foster an inclusive environment. Equal Employment Opportunity Commission (EEOC) The EEOC has long taken the position that the use of an individual’s criminal history may result in prohibited discrimination based upon race and national origin under Title VII of the Civil Rights Act of 1964. Discrimination could occur if an employer utilizes criminal conviction history against only certain individuals based on their race or national origin. However, the EEOC

 •Know your

parameters. Do federal and/or state regulations place particular limits on hiring for positions in your industry?

 •Train recruiters and hiring managers. All

individuals involved in considering the impact of prior criminal history on hiring should understand how both the legal parameters and the company’s own values impact these decisions.

 •Make individualized decisions, weighing the nature and gravity of the offense(s), the time that has passed since the conviction and/or the individual’s release from incarceration, the nature of the job held or sought, and applicable state and federal statutes and regulations. Avoid considering prior arrests

goes further to point out that a neutral policy of excluding certain applicants based upon criminal conviction history may also be unlawful if it results in a disparate impact on individuals protected under Title VII. Therefore, the EEOC requires employers to establish that the exclusion of individuals with criminal convictions must be job related and consistent with business necessity. Employers should conduct an individualized assessment to determine whether the conviction would be disqualifying. Employers should consider: 1) the nature and gravity of the offense or conduct; 2) the time that has passed since the offense, conduct and/or completion of the sentence; and 3) the nature of the job held or sought. The EEOC guidance states that conducting an individualized assessment will reduce the likelihood disparate impact discrimination will

(unless recent), which were not followed by convictions, and dismissed charges. Carefully consider whether expunged records should be included as a factor in hiring decisions.

 •Whether a successful hire or not, treat each hired justice-involved individual as an individual, avoiding assumptions about this group as a whole based on singular experiences.


occur. More information regarding the EEOC Enforcement Guidance can be found at www.eeoc.gov/laws/guidance/ arrest_conviction.cfm. Fair Credit Reporting Act (FCRA) The Fair Credit Reporting Act requires employers who use third-party service providers (consumer reporting agencies or background checking companies) to conduct criminal background checks or credit checks on applicants or current employees to follow strict procedures of providing notice, disclosure and consent by the applicant/employee prior to taking any adverse action against the applicant/employee. Employers utilizing third-party service providers to conduct criminal or credit background checks should be careful to utilize the forms provided by the Federal Trade Commission and/or the third party service provide to ensure compliance. Employers must obtain the consent of the applicant/ employer prior to running the background check and then if the background check reveals information that disqualifies the applicant/employee from employment, employers must follow the procedure to provide a pre-adverse action notice and an adverse action notice. The employee also has the right to a copy of the results of the background check and instructions on how to contest the information with the third- party service provider. More information regarding the requirements of the FCRA can be found at www.ftc.gov. CASE STUDIES Related to hiring justice-involved individuals Disclaimer – Please seek legal counsel for any questions you have about employment law. The following information is not legal advice but simply a summary of recent applicable cases. Currently, justice-involved individuals are not a protected class, but that does not mean that they are without protection from discriminatory hiring practices. On the contrary, the U.S. Equal Employment Opportunity Commission (EEOC) has sued two large companies in the last decade over this exact issue: https://www.eeoc.gov/newsroom/eeoc-files-suit-against- two-employers-use-criminal-background- checks The EEOC filed suit against BMW for firing multi-year, active contract employees because of new background check standards required of employees. The EEOC also filed suit against Dollar General because their blanket policy against hiring justice-involved individuals disproportionately affected African American applicants.

In 2012, the EEOC also updated their Enforcement Guidance on the Consideration of Arrest and Conviction Records in


Employment Decisions under Title VII of the Civil Rights Act: https://www.eeoc.gov/laws/guidance/enforcement- guidance-consideration-arrest-and-conviction- records- employment-decisions There is a lot of detail and nuance in this guidance, but the gist of considerations is that your criminal background hiring policies don’t target or disproportionately affected protected classes. Finally, the only Oklahoma statute that deals with this specific issue directly is §56-1025.2. Criminal history records searches on community services worker applicants, Medicaid personal care assistants and contractors. https://law.justia.com/codes/ oklahoma/2014/title-56/section-56-1025.2/ This simply dictates that a background should be performed on community service workers and Medicaid personal care assistants. INCENTIVES AND SUPPORT There are several incentives and support programs available to assist employers in mitigating risk when hiring an individual with a justice-involved background. Just as important, there are services made available to those individuals to help them successfully transition to a new career opportunity. FEDERAL BONDING PROGRAM The Federal Bonding Program provides important support for justice-involved individuals and other challenged job seekers, helping them secure employment and stay employed. The program primarily targets justice-involved individuals – people who have been previously incarcerated and are returning to the community – and other job seekers who have faced difficulties in finding employment. Bonds can be applied to any job with any employer, in any state, and covers any employee dishonesty committed on or away from the workplace. Full- or part-time employees receiving paid wages (with Federal taxes automatically deducted from pay) can be bonded, including those hired by “temp agencies.” Bonds can also be purchased to cover already employed workers who need bonding to prevent being laid off or to secure a transfer or promotion to a different job with a current employer. It is important to note: EMPLOYEES MUST APPLY FOR THE BOND, not employers. Additional information and forms are located at https://www. ok.gov/oesc/documents/FEDERAL%20BONDING%20FLYER%20 FRONTBACK_OES-645_%20REV%20JUNE%202017.pdf


Oklahoma Coordinator: Oklahoma Employment Security Commission Pam Hoskins, Program Manager, Targeted Populations P.O. Box 52003 Oklahoma City, OK. 73152 (405) 557-5474 Pam.Hoskins@oesc.state.ok.us WORK OPPORTUNITY TAX CREDIT The Work Opportunity Tax Credit (WOTC) is a federal tax credit program available to employers who hire new employees from targeted groups that have historically had difficulty finding employment. This includes but is not limited to veterans, people who qualify for vocational rehabilitation, and the formerly incarcerated. The credit is used to reduce the federal tax liability of private for-profit employers. WOTC Tax Savings •For employees who work at least 120 hours but less than 400 hours, WOTC tax savings are calculated at 25% of the qualified first-year wages—a savings of $1,500 for the employer. •For employees who work 400 hours or more, WOTC tax savings are calculated at 40% of the

qualified first year wages up—a savings of $2,400 for the employer.

For employers who wish to hire justice-involved individuals, the following definition applies:

An “ex-felon” is a person who has been CONVICTED (not just charged) with a felony. They must be hired within one year being convicted of the felony OR within one year of being released from prison for incarceration for the felony. Applying For WOTC Certification The employer must complete IRS Form 8850 (PreScreening Notice and Certification Request) and the ETA Form 9061 (Individual Characteristic Form) by the date of the job offer. The ETA Form 9062 is to be only used and completed by the state workforce agency (SWAs). Certification requests should be mailed to:

Oklahoma Employment Security Commission Attn: WOTC UNIT P.O. Box 52003 Oklahoma City, OK 73152-2003 Eligibility Process

Once the employer returns the completed forms to the Oklahoma Employment Security Commission, an eligibility


Oklahoma Department of Corrections Reentry Services http://doc.ok.gov/intervention-and- reentry-services Moore Norman Technology Center Re-Entry Specialist team and trainers: •Ernie Gomez (405) 801-5812 Specialist in Human Resources, SHRM, Real Estate Certification •Jared Williams (405) 801-5057 Specialist in Career Connections, pre-release job skills & readiness •Matt Fix (405) 801-5261 Specialist in TANF, HIRE, job readiness and life skills •Traci Saor (405) 801-5703 Specialist in trades skills education and certification COMMUNITY SUPPORT PROGRAMS Community support and acceptance is critical to the success of citizens returning to society. Support may take various forms—faith based, job readiness and availability, social services or substance addiction or mental health treatment. It is difficult to provide a comprehensive list because support varies by area and municipality and can change due to funding or volunteer availability.

determination will be made based on a review of the information and documentary evidence supplied. If the employee is determined to be eligible, a certification will be issued and mailed to the employer. •For information and forms, visit the Oklahoma Employment Security Commission information page:

https://www.ok.gov/oesc/Job_Seekers/ Workforce_Services/Work_Opportunity_Tax_ Credit.html

Oklahoma WOTC Brochure https://www.ok.gov/oesc/documents/WOTC%20 BROCHURE%20Rev’d%2003_2018%20(1).pdf Debra Roseburr, Program Manager - (405) 557-7128 Oklahoma Works – oklahomaworks.gov/incentives/ Internal Revenue Service – https://www.irs.gov/ businesses/small-businesses-self- employed/work- opportunity- tax-credit ADDITIONAL RESOURCES FOR EMPLOYERS US Department of Labor U.S. Department of Labor ETA (Employment, Training & Assistance) Handbook No. 408 https://www.doleta.gov/business/incentives/opptax/docs/ ETA_Handbook_408_Nov_2002_3rd_Edition. pdf EEOC Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. https://www.eeoc.gov/laws/guidance/ upload/arrest_conviction.pdf Fair Credit Reporting Act https://www.ftc.gov/system/files/545a_fair-credit-reporting- act-0918.pdf Second Chance employment toolkit for employers - Society for Human Resource Management (SHRM) https://www.gettingtalentbacktowork.org/ Oklahoma Partnership for Successful Reentry (OPSR) – Statewide coalition of organizations working to assist justice involved reintegrate into society. http://www.okreentry.org/index.html

Please verify capability and capacity with any organization before recommending them.

The Education and Employment Ministry, non-profit dedicated to breaking cycle of incarceration and poverty. https://www.teem.org Search engine and repository of social service programs by area code https://www.auntbertha.com/



U.S. Department Of Labor Employment and Training Administration

OMB Control No. 1205-0371 Expiration Date: March 31, 2023

Individual Characteristics Form (ICF) Work Opportunity Tax Credit

1.Control No. (For Agency use only)

2.Date Received (For Agency Use only)

APPLICANT INFORMATION (See instructions on reverse)


3. Employer Name

4. Employer Address and Telephone 5. Employer Federal ID Number (EIN)


6. Applicant Name (Last, First, MI)

7. Social Security Number

8. Have you worked for this employer before? Yes ____ No ____ If YES, enter last date of employment: ____________


9. Employment Start Date

10. Starting Wage

11. Position

12. Are you at least age 16, but under age 40?

Yes ___ No ___

If YES , enter your date of birth _____________________ 13. Are you a Veteran of the U.S. Armed Forces?

Yes ___ No ___

If NO , go to Box 14. If YES , are you a member of a family that received Supplemental Nutrition Assistance Program (SNAP) benefits (Food Stamps) for at least 3 months during the 15 months before you were hired? If YES , enter name of primary recipient _______________________ and city and state where benefits were received _________________. OR , are you a veteran entitled to compensation for a service-connected disability?

Yes ___ No ___

Yes ___ No ___ If YES , were you discharged or released from active duty within a year before you were hired? Yes ___ No ___ OR, were you unemployed for a combined period of at least 6 months (whether or not consecutive) during the year before you were hired? Yes ___ No ___ 14. Are you a member of a family that received Supplemental Nutrition Assistance Program (SNAP) (formerly Food Stamps) benefits for the 6 months before you were hired? Yes ___ No___ OR, received SNAP benefits for at least a 3-month period within the last 5 months But you are no longer receiving them? Yes ___ No___ If YES to either question , enter name of primary recipient _____________________ and city And state where benefits were received _____________________. 15. Were you referred to an employer by a Vocational Rehabilitation Agency approved by a State? Yes ___ No___ OR , by an Employment Network under the Ticket to Work Program? Yes ___ No___ OR , by the Department of Veterans Affairs? Yes ___ No___ 16. Are you a member of a family that received TANF assistance for at least the last 18 months 1



Instructions for Form 8850 (Rev. April 2020) (For use with the March 2016 revision of Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit) Department of the Treasury Internal Revenue Service

Members of Targeted Groups ), the employer completes the rest of the form no later than the day the job offer is made. Both the job applicant and the employer must sign Form 8850 no later than the date for submitting the form to the SWA. Instructions for Employer When and Where To File Don’t file Form 8850 with the IRS. Instead, you must submit it to the SWA of the state in which your business is located (where the employee works) generally no later than the 28th calendar day after the date the individual begins working for you. However, submitting Form 8850 to the SWA is listed in Rev. Proc. 2018-58 (section 15, item 12) as an act that may be postponed for taxpayers affected by a federally declared disaster. Notice 2020-23, citing the COVID-19 emergency declaration, allows all employers to submit Form 8850 to the SWA by July 15, 2020, if the 28th calendar day falls on or after April 1, 2020, and before July 15, 2020. Any extensions of the July 15 date will be posted at IRS.gov/Form8850 .

General Instructions Section references are to the Internal Revenue Code unless otherwise noted. Future Developments For the latest information about developments related to Form 8850 and its instructions, such as legislation enacted after they were published, go to IRS.gov/Form8850 . What's New The Taxpayer Certainty and Disaster Tax Relief Act of 2019 made the following changes. • The work opportunity credit has been extended to cover certain individuals who begin working for you in 2020. • The empowerment zone designations expired at the end of 2017. However, the Act provides for an extension of the designations to the end of 2020. To extend the designations, state and local governments must amend their nominations of the designated zones in order to move the termination date to December 31, 2020. The IRS is working to provide guidance on how to amend the nomination of an empowerment zone to provide for a new termination date. Go to IRS.gov/Form8850 for updates on the guidance once it becomes available. Purpose of Form Employers use Form 8850 to pre-screen and to make a written request to the state workforce agency (SWA) of the state in which their business is located (where the employee works) to certify an individual as a member of a targeted group for purposes of qualifying for the work opportunity credit. Submitting Form 8850 to the SWA is but one step in the process of qualifying for the work opportunity credit. The state work opportunity tax credit (WOTC) coordinator for the SWA must certify the job applicant is a member of a targeted group. After starting work, the employee must meet the minimum number-of-hours-worked requirement for the work opportunity credit. Generally, an employer elects to take the credit by filing Form 5884, Work Opportunity Credit. However, a tax-exempt organization that hires a qualified veteran must report the work opportunity credit on Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. You must receive the certification from the SWA before you can claim the related credit on Form 5884 or Form 5884-C. Who Should Complete and Sign the Form The job applicant gives information to the employer on or before the day a job offer is made. This information is entered on Form 8850. If the employer believes the applicant is a member of a targeted group (as defined later, under CAUTION !

If the credit expires and is retroactively extended, the IRS may allow you more time to submit Form 8850 for an individual who began work while the credit was


expired or for a reasonable time after it was extended. If more time is allowed, we will provide details at IRS.gov/Form8850 and in revised Instructions for Form 8850. Although facsimile submission of Form 8850 is permitted, not all states are equipped to accept a faxed copy of Form 8850. Contact your state WOTC coordinator as discussed below and see Notice 2012-13 for details. Notice 2012-13, 2012-9 I.R.B. 421, is available at IRS.gov/irb/ 2012-09_IRB#NOT-2012-13 . Although electronic submission of Form 8850 is permitted, not all states are equipped to receive Form 8850 electronically. Contact your state WOTC coordinator as discussed next and see Announcement 2002-44 and Notice 2012-13 for details. You can find Announcement 2002-44 on page 809 of Internal Revenue Bulletin 2002-17 at IRS.gov/pub/irs-irbs/irb02-17.pdf . To get the name, address, phone and fax numbers, and email address of the WOTC coordinator for your state, visit the Department of Labor Employment and Training Administration (ETA) website at www.dol.gov/agencies/eta/ wotc/contact/state-workforce-agencies . Never attach Form 8850 to a tax return or otherwise send it to the IRS, regardless of the employee's targeted group. Form 8850 must be submitted to the SWA of the state in which your business is located (where the employee works). CAUTION !

Cat. No. 24833J

Apr 30, 2020



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