Fair Chance Hiring: A Practical Guide for Employers
Millions of Americans have a record, and employers who hire them can access federal incentives while widening their talent pool. This guide covers the programs, the compliance basics, and how to build a fair chance process — in plain language, not legal advice.
Post Jobs Free on Our Board · See Fair Chance Employers
What fair chance hiring involves
Fair chance hiring means evaluating candidates on qualifications first and considering records individually, later in the process. The federal government supports it with tax incentives and free bonding; this section walks through each piece.
The business case, without the hype
Employers who exclude everyone with a record shrink their applicant pool in a tight labor market. Fair chance hiring opens access to motivated candidates, supports workforce partnerships and public contracts that value inclusive hiring, and pairs with federal incentives designed to offset perceived risk. It is a hiring strategy, not charity.
The Work Opportunity Tax Credit (WOTC)
WOTC is a federal tax credit for employers who hire people from targeted groups, including qualified ex-felons hired within a period after conviction or release. Credit amounts depend on the employee's group, wages, and hours worked. Employers apply through their state workforce agency using IRS Form 8850, generally filed within 28 days of the start date. Details are published by the IRS and the U.S. Department of Labor.
The Federal Bonding Program
The U.S. Department of Labor's Federal Bonding Program provides fidelity bonds — at no cost to the employer or the job seeker — that insure employers against employee dishonesty for eligible hires who may face barriers to bonding, including people with records. Bonds are issued through state bonding coordinators, typically for the first months of employment.
Know the compliance landscape
The EEOC advises employers to consider the nature of the offense, time elapsed, and relevance to the specific job — an individualized assessment — rather than blanket exclusions, because those can create discrimination risk under Title VII. Many states and cities also have ban-the-box laws that control when you may ask about records. Rules vary by location, so confirm yours with counsel.
Build a fair chance process that works
Practical steps: remove the record question from initial applications where law or policy requires it, evaluate qualifications first, run background checks late in the process with proper FCRA disclosure and consent, apply individualized assessment before withdrawing an offer, and document your reasoning. Consistency protects both candidates and your organization.
Partner instead of going it alone
Workforce boards, reentry organizations, and nonprofit platforms can pre-screen motivated candidates, support retention after hire, and handle paperwork like WOTC certification requests. Our free employer portal connects you to job seekers who are actively working with career coaching and support services.
Official sources
Program rules come from the agencies that run them. Verify details on these official sites:
- IRS: Work Opportunity Tax Credit (opens in a new tab)
- IRS: About Form 8850 (opens in a new tab)
- Federal Bonding Program (U.S. Department of Labor initiative) (opens in a new tab)
- EEOC: Consideration of arrest and conviction records (opens in a new tab)
- EEOC: Background checks — what employers need to know (opens in a new tab)
Start hiring on a fair chance basis
Post your openings free on our employer portal, reach candidates backed by career coaching and support services, and join the employers listed in our fair chance directory.
Frequently Asked Questions
How much is the WOTC tax credit worth?
It depends on the target group, the employee's wages, and hours worked in the first year, under rules published by the IRS. Because amounts and rules can change, check current IRS and Department of Labor guidance or ask your state workforce agency.
What does the Federal Bonding Program cover?
It provides free fidelity bonds that insure the employer against theft, forgery, larceny, or embezzlement by a covered employee during the initial bond period. It does not cover job performance or liability issues.
Can I still run background checks under fair chance hiring?
Yes. Fair chance hiring changes when and how you consider records, not whether you may check them. Follow FCRA disclosure and adverse-action steps, and apply any state or local timing rules.
Is fair chance hiring legally required?
Requirements vary. Many states and localities have ban-the-box laws for some or all employers, and EEOC guidance shapes how record screening interacts with federal anti-discrimination law. This guide is general information, not legal advice — confirm your obligations with counsel.
How do I find fair chance candidates?
Post openings on our free employer job board, connect with your local workforce board or American Job Center, and partner with reentry organizations. Our platform pairs candidates with free AI career coaching and support resources.