With one in four Americans now carrying a criminal record according to statistics from the Charles Koch Institute, a full quarter of the country’s eligible workforce may be seeing their opportunities to work and earn a living limited by the results that turn up during a pre-employment check. Since unemployment is at its lowest in years and companies are struggling to find qualified workers across all industries, that’s not an ideal state of affairs.
Legislation like the Second Chance Act is all about getting employers to reconsider their position on hiring former convicts, and this—and other—initiatives are aimed at motivating companies to move past their concerns, even if a prospect’s pre-employment check turns up unfavorable results.
Second Chance Incentives
Signed into law in 2008, the Second Chance Act is a Federal incentive that provides two-year grants to various government and non-profit organizations. The purpose is to fund the services necessary to appoint, train, support, and reintegrate former offenders into worthwhile employment. Some of the things employers are expected to do with the funding are to train employees in:
- skilled trades,
- entrepreneurial thinking, and
- initiatives that keep people from going to prison in the first place.
Although any company can choose to offer these options for ex-convicts, only eligible organizations will actually receive funding to do so. Many companies are looking at ways to remove the barriers to employment that ex-convicts experience, however, and a number of other initiatives have been created to encourage this, such as the Work Opportunity Tax Credit (WOTC).
This is a Federal incentive aimed at employers that hire people from targeted groups such as ex-convicts. If employees work for at least 120 hours each year, the company can claim a tax credit of 25% of the first year’s wages, and 40% for 400 or more hours of work up to $2,400 per person. There’s also no limit to the number of workers you can hire from the target groups, so it can make a big difference to your tax burden—although statistics show most companies never claim it!
Companies such as McDonald’s and Delta Air Lines have inclusion strategies that support hiring of ex-cons, and reports from the Society of Human Resources Management show 82% of these hires are as successful as regular hires. Only 14 percent of human resources managers won’t consider hiring ex-offenders, although they continue to conduct stringent pre-employment checks on all candidates.
Many cities and states also offer local tax credits and other incentives to employers that are prepared to hire ex-cons and provide them with a second chance. Philadelphia’s Fair Chance Hiring Initiative, for instance, provides a cash reimbursement to employers who hire ex-convicts who were released from prison within the previous five years.
Why Your Company Should Consider Second Chance Incentives
Apart from the obvious financial benefits offered by the various incentive programs, what’s in it for your company when it comes to hiring ex-cons and giving them a second chance?
Large corporations like Home Depot, American Airlines, and Under Armour all have introduced hiring practices that include people with criminal records. The benefits they enjoy as a result include a larger candidate pool from which to draw staff, as well as employee loyalty. This is thanks to a 2017 study by Northwestern University that showed ex-cons were less likely to leave their jobs voluntarily than others.
Become a provider of hope and consider opening up opportunities in your organization or company to former convicts. Conduct pre-employment checks on all your candidates (with their permission, of course), and make the most of the opportunity for tax breaks on hiring some of them.
For more information about Work Opportunity Tax Credits (WOTC) and the benefits you can access, or a confidential pre-employment check of potential candidates, please contact us at +1 (800) 295-7109.