On December 17, 2019, the Senate passed the National Defense Authorization Act (NDAA) for Fiscal Year 2020, which was subsequently signed by the President. As part of the NDAA, the government enacted the Fair Chance to Compete for Jobs Act of 2019 (the Fair Chance Act or Act), which prohibits federal agencies and federal contractors from requesting criminal background information from job applicants prior to extending an offer, with a few exceptions. The Fair Chance Act goes into effect on December 20, 2021.
What is the Fair Chance Act?
The Fair Chance Act is a federal extension of the “ban-the-box” laws that have been enacted in various states and localities in the past few years. 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 the contractor extends a conditional offer to the applicant.
The law provides three exceptions as follows:
- if consideration of criminal history record information prior to a conditional offer is required by law;
- the position at issue would have access to classified information or have sensitive law enforcement or national security duties; or
- the position is identified as excepted by the Administrator of General Services (or, in the case of defense contracts, by the Secretary of Defense).
Positions are set to be identified by the Administrator of General Services and the Secretary of Defense by April 2021 and should be limited to positions that “involve interaction with minors, access to sensitive information, or managing financial transactions.”
Consequences of Non-Compliance
Although compliance procedures are forthcoming, the Fair Chance Act sets forth progressive penalties for violations, up to and including suspension of payment for a repeated offense. A first violation carries with it a written warning followed by a notice to comply. Subsequent violations include requiring the contractor to provide assurances that they are coming into compliance and/or suspension of payment on the contract until compliance is demonstrated.
Implications for Federal Contractors
Contractors should follow best practices to ensure they are compliant with current laws and are proactively preparing to be Act compliant. Even though the Fair Chance Actdoes not go into effect until December 2021, current best practice is to refrain from asking about criminal convictions until a conditional offer has been made, given state law requirements and the Equal Employment Opportunity Commission’s focus on employment actions that result in a disparate impact to minority applicants. All employers should consider taking the following measures:
- review hiring practices and onboarding materials, including application forms, checklists, and policies;
- offer periodic training to those involved in the recruiting and hiring processes; and
- determine how best to implement a policy (or policies) to comply with all applicable federal, state and local laws.