Fair Chance Act Now Applies to Federal Contractors & Federal Agencies

The President signed the National Defense Authorization Act for Fiscal Year 2020. This new provision, which went into effect on December 20, 2021, prohibits federal contractors from requesting "the disclosure of criminal history record information regarding an applicant for a position related to work under "a federal contract before the contractor extends a conditional offer to the applicant.

What does this new Fair Chance Act mean?

Known as the "Fair Chance to Compete for Jobs Act of 2019" or "Fair Chance Act (FCA)" it prohibits federal contractors from asking applicants seeking work under federal contracts about their criminal histories until after they have been made a conditional job offer. 

Per Sec. 9202. Limitations on requests for criminal history information of the act:

"(a) Inquires prior to conditional offer. -

Except as provided in subsections (b) and (c), an employee of an agency may not request, in oral or written form (including through the Declaration for Federal Employment (Office of Personnel Management Optional Form 306) or any similar successor form, the USAJOBS internet website, or any other electronic means) that an applicant for an appointment to a position in the civil service disclose criminal history record information regarding the applicant before the appointing authority extends a conditional offer to the applicant."

This new provision is intended to reduce the degree of discrimination against job applicants with a prior record by allowing them an opportunity to be considered for employment, even if they have a past conviction, or arrest that did not result in a conviction.

Who this Act covers

The Act covers all executive agencies including cabinet agencies, the U.S. Postal Service, the legislative branch, the judicial branch of the federal government, and private-sector companies working on federal contracts. 

Who is exempt from the Fair Chance Act?

The prohibition does not apply to three types of positions:

1. Positions related to law enforcement and national security duties.
2. Positions that require access to classified information. 
3. Positions where the consideration of criminal history information prior to a conditional offer is required by law.

Penalties for violation of the Fair Chance Act

If a civilian or defense agency contractor does not comply, there are penalties for first and subsequent violations.

Per the FCA, the Director may take such adverse action with respect to a covered employee who violates paragraph (2) as would be appropriate under section 9204 of if the violation had been committed by an employee of an agency.

The penalties for not complying are as follows: 

• For the first violation: the employee will receive a written warning which includes a description of the violation and the additional penalties that may apply for subsequent violations; and file such warning in the employee’s official personnel record file.
• For a second violation: suspension of the employee for a period of not more than 7 days.
• For a third violation: suspension of the employee for a period of more than 7 days.
• For a fourth violation: suspension of the employee for a period of more than 7 days, and a civil penalty against the employee in an amount that is not more than $250.
• For a fifth violation: suspension of the employee for a period of more than 7 days and a civil penalty against the employee in an amount that is not more than $500.
• For any subsequent violations: suspension of the employee for a period of more than 7 days and a civil penalty against the employee in an amount that is not more than $1,000.

Federal contractors should review their hiring policies and applications to ensure they are in compliance with both federal law and local regulations. They should also keep in mind the existing "Ban the Box" laws that have been passed in 37 states and more than 150 cities and counties that may have additional requirements or restrictions.

Get expert tools to help you respond to a shifting law landscape

Orange Tree can help you stay updated on the latest laws and regulations regarding Ban-the-Box, use of credit legislation, EEOC guidance, and more. We provide our clients:

• Proactive communication of relevant industry and legal updates/and requirements.
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• Transparency in our practices to our clients and candidates.

Schedule a call to learn how we can help ensure your screening process is compliant with the current and changing Fair Chance Act and Ban-the-Box laws. 

We recommend employers review and discuss with your legal counsel your organization’s policies and procedures to ensure continued compliance with the changing laws and regulations.