OFCCP Issues Criminal Records Directive, Cautions Contractors on Blanket Exclusions

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Federal contractors and subcontractors should carefully consider their nondiscrimination obligations prior to adopting hiring policies and practices that exclude applicants from employment based on their criminal history records, the Labor Department's Office of Federal Contract Compliance Programs said in an agency directive posted Feb. 1.

Signed Jan. 29 by OFCCP Director Patricia Shiu and subsequently posted to the agency's website, Directive 306 discusses racial and ethnic disparities in U.S. incarceration rates and observes that blanket hiring exclusions against individuals with criminal records may have an impermissible disparate impact on those protected groups.

In accordance with April 2012 guidance from the Equal Employment Opportunity Commission, the directive highlights several best practices for federal contractors to avoid liability for disparate impact and disparate treatment discrimination under Executive Order 11,246 when dealing with applicant criminal histories.

The directive also discusses new procedures related to applicant criminal records that may affect contractors that post job openings to federally assisted workforce systems.

Citing statistics from the Pew Center on the States, OFCCP in the directive observed that one in 36 Hispanic men and one in 15 black men are incarcerated in the United States, compared with one in 106 white men.

OFCCP said data from the U.S. Census Bureau, the Federal Bureau of Investigation, and the Bureau of Justice Statistics also show that blacks, who make up approximately 13 percent of the country's overall population, constitute 28 percent of arrested individuals and almost 40 percent of those incarcerated. In addition, OFCCP said one in 27 Hispanic adults and one in 11 black adults are under some type of correctional control, such as probation or parole. Meanwhile, one in 45 white adults are under correctional control, OFCCP said.

“In light of these racial and ethnic disparities, contractors should be mindful of federal antidiscrimination laws if they choose to rely on job applicants' criminal history records for purposes of employment decisions,” the agency said.

OFCCP Backs EEOC's Guidance

Last April, EEOC updated its enforcement guidance on potential discrimination under Title VII of the 1964 Civil Rights Act based on employers' use of individuals' arrest and conviction records to make hiring and other employment decisions (63 BTM 137, 5/1/12).

Given that OFCCP follows Title VII when interpreting EO 11,246, the agency said EEOC's guidance “will assist contractors in implementing and reviewing their employment practices” so as to avoid engaging in disparate treatment and disparate impact bias.

Although individuals with criminal records do not make up a protected group under either the statute or the executive order, OFCCP said contractors may engage in unlawful disparate treatment by favoring whites with criminal records in comparison to similarly situated blacks with the same or similar records.

In addition, OFCCP said unlawful disparate impact may lie where a contractor uses a facially neutral policy to exclude job candidates with arrest or conviction records, such as by including “no criminal background” or “clean criminal background” requirements in job postings.

Job Related, Business Necessity

Continuing to cite EEOC's guidance, OFCCP said a contractor that has a policy to categorically exclude applicants based on criminal history nevertheless may avoid disparate impact liability if it demonstrates that the exclusion is “job related and consistent with business necessity.”

“[T]he employer needs to show that the policy operates to effectively link specific criminal conduct, and its dangers, with the risks inherent in the duties of a particular position,” OFCCP said, quoting EEOC's guidance.

A contractor may establish job relatedness and business necessity by validating its policy pursuant to the Uniform Guidelines on Employee Selection Procedures enforced by both EEOC and OFCCP (29 C.F.R. part 1607; 41 C.F.R. part 60-3), the agency said.

Absent UGESP validation, the agency said a contractor also may establish that a criminal record exclusion is job-related and consistent with business necessity by considering the following three factors:

• the “nature and gravity” of the individual's criminal offense or conduct;

• the amount of time between a job seeker's criminal conduct and his or her employment application; and

• the nature of the duties and essential functions of the position sought.


OFCCP Offers Best Practices

OFCCP recommended that contractors follow the best practices in EEOC's guidance.

For example, the agency said contractors should engage in individualized assessments if they have policies and procedures that use criminal conduct as a screening tool for applicants and employees.

“Such policies and procedures should be narrowly tailored to the essential job requirements and actual circumstances under which the jobs are performed; to the specific offenses that may demonstrate unfitness for performing such jobs; and to the appropriate duration of exclusions for criminal conduct, based on all available evidence,” it said.

OFCCP also agreed with EEOC that contractors generally should not include questions about job seekers' criminal convictions on employment applications.

However, if a contractor makes such a request, the inquiry should be “limited to convictions for which exclusion would be job-related for the position in question and consistent with business necessity,” the agency said.

Lastly, OFCCP emphasized that contractors should keep confidential applicants' and employees' criminal histories and use those records only “for the purpose for which [they are] intended.”

Federally Assisted Systems

In addition, OFCCP's directive touched upon a May 2012 training and employment guidance letter (TEGL 31-11) issued by DOL's Employment and Training Administration and Civil Rights Center.

The letter advised entities receiving federal financial assistance to operate DOL's American Job Center network and other public workforce system job banks to “promote employment opportunities for formerly-incarcerated individuals and other individuals with criminal records.”

Federal contractors, it said, may use those covered entities to list their job openings pursuant to obligations under the Vietnam Era Veterans' Readjustment Assistance Act.

If contractors do so, OFCCP said they should be aware of new procedures outlined in TEGL 31-11. For instance, covered entities are required to use a system that identifies employer vacancy announcements “that include hiring restrictions based on arrest and/or conviction records.”

When such an announcement is identified, OFCCP said, the entities are required to send a notice to the employer and provide an opportunity for the company to either remove or edit the job listing.

Lastly, it suggested that contractors familiarize themselves with any state and local laws that restrict employers' use of arrest and conviction records for employment decisions.

By Jay-Anne B. Casuga  

Text of the directive is available at http://op.bna.com/dlrcases.nsf/r?Open=jaca-94nn7g.

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