With a stagnant job market, it is unlikely that you as a small business owner are having trouble finding employees. Nonetheless, it is likely that you have received applications from ex-convicts in the past. While your first impulse might be to send them straight to the trash, there are incentives for being the one to give them a second chance.
Most of us are aware of the various reasons why hiring an ex-convict isn’t a good idea: safety, cost, and your business’ reputation are just a few. But a study by Carnegie Mellon and the incentives provided by the government argue that it might be worth a shot, depending on your business’ needs and the employee’s personal history.
Some of the financial incentives of hiring an ex-convict are tax credits, insurance, and training. The Work Opportunity Tax Credit, which will be available through the end of this year, provides up to $2400 of tax credit to companies who hire an ex-convict if it has been within one year of his/her release from prison.
Another financial incentive is fidelity bonding. Under this program, the government provides $5,000-$25,000 of insurance for six months for businesses who hire ex-convicts. After six months, you have the option of purchasing the insurance yourself.
The third available incentive is training through the Workforce Investment Act of 1998, which replaced the Job Training Partnership Act to provide funding for training wages and additional services for ex-convicts.
These three government incentives help to alleviate the financial risk that owners often face when deciding whether or not to hire an ex-convict. They help cover the costs of hiring and training an ex-convict in addition to any damages that the business may suffer as a result. Nonetheless, they are limited in scope, as the Work Opportunity Tax Credit is available only for a year after the person has been released and fidelity bonding for six months unless you decide to continue to pay for the insurance yourself.
Carnegie Mellon Study
A study that is often cited in discussions regarding the ex-convict hiring debate is one conducted by Carnegie Mellon and featured in Criminology magazine. The results of the study showed that if an ex-convict was able to go without committing a crime for five years, they no more likely than others of committing another crime. In the study, criminal history records of more than 88,000 first-time offenders in New York in 1980 were used.
However, they study also showed that new crimes were common among convicts within the first couple of years of being released; two-thirds of inmates released from prison were arrested within the first three years. This study suggests that there is low risk in hiring an ex-convict who has maintained a clean record for the past five years. Unfortunately, this time frame prevents business owners from taking advantage of the financial incentives provided by the government—with the exception of the Job Training Partnership Act.
Making the Decision
What should you keep in mind when making the final decision about whether or not to hire? The first thing to remember is that each individual is different and must be treated as an individual and not simply an ex-convict. See what educational, vocational, and coping skills that the person has accumulated before and while in prison, because these will play a key role in his/her success on the job.
Second, examine the nature of the crime, when the sentence was served, and the date of his/her last arrest. If the nature of the crime will not hinder job performance or pose a significant safety risk and the person has been a law-abiding citizen for the past five years, the argument to keep them is strong.
In making such a decision, Hope Karidas, a HR professional in Denver advises owners to think about the issue of liability. A business can be held liable for negligent hiring practices if an employee commits a crime on the job. The costs of such an incident will include time and energy spent on the lawsuit in addition to the business’ reputation. Karidas recommends using the “jury test” to determine whether or not to hire an ex-convict. This involves thinking of the worst possible scenario that could be expected as a result of the hire, and determining whether or not you could argue for the soundness of your actions to a jury if a lawsuit were to occur.
1) About.com: “When Is It Safe to Hire an Ex-Convict?”
2) News-record.com: “Incentives to hire felons include tax credits, free insurance”
3) eHow Money: “How to Get Fidelity Bonded”
4) NPR: “Hiring Ex-Cons”
5) CBR: “Would You Hire Ex-Felons?”