“Ban the Box” is in Effect: What Federal Contractors Need to Know About the Fair Chance Act

In December 2021, new regulations went into place for federal contractors under the federal Fair Chance Act (“FCA”).  The FCA prohibits covered contractors, either verbally or through a written background check request, from seeking “criminal history record information” from applicants for positions related to work related to a federal contract until after a conditional employment offer is extended.  This term “criminal record information” includes information about individuals collected by criminal justice agencies regarding arrests, indictments, information or other criminal charges, dispositions, sentencing, correction and release.

The FCA was passed to give ex-offenders greater opportunities to find work with federal contractors.  Although the law was enacted in December 2019, it only applies to “contracts awarded pursuant to solicitations issued after” December 20, 2021.  For contracts awarded after this date, adherence to the FCA is a condition of receiving a federal contract.  The following addresses what employers need to know.

What contracts are covered under the FCA?

Contracts awarded by both civil and defense agencies issued after December 20, 2021 are covered under the FCA.  To obtain a federal contract, the contractor must consent to the FCA’s provisions as a condition of receiving a federal contract and receiving payments under such contract.  The FCA requirements do not appear to apply to subcontractors at this time.  Nor is there any language requiring prime contractors to monitor the hiring activities of their subcontractors for compliance with the FCA.

What applicants or positions are covered?

The FCA requirements only apply to positions that will perform work “related to” work under the federal contract.  In the absence of a specific definition of “related to,” the term has been given a broad meaning.

Are there exemptions?

There are limited exemptions from the FCA which include:

  1. Positions for which criminal background checks are required by law;
  2. Positions relating to national security or involving access to sensitive law enforcement or classified information; or
  3. Positions falling into an enumerated exception (i.e., positions identified in regulations issued by the Secretary of Defense or Administrator of General Services).

Other exceptions are anticipated in the final regulations, including positions that involved interactions with minors, access to sensitive information, or managing financial transactions.

The Bottom Line

Federal contractors must be aware of the new hiring requirements under the FCA.  To ensure compliance, federal contractors should take the following actions:

  • Advise and train all employees involved in the hiring process to refrain from requesting disclosure of criminal history information for job applicants who apply for a federal contract covered position until a conditional offer of employment is extended;
  • Review and revise all hiring applications and other documents for compliance with the FCA; and
  • Stay up to date regarding state and local “Ban the Box” laws.