Business Tips

What Does Fair Chance Hiring Mean For Your Small Business?

February 21, 2025

As small businesses continue to experience staff shortages, how can you compete and expand your candidate pool? One way is through fair chance hiring, which is the practice of considering hiring candidates with past criminal histories. Fair chance hiring can create more possibilities for your small business growth, but it should be handled appropriately.

In this overview, you’ll learn all about fair chance hiring – what it is, whether it could be a consideration for your business, how it can be beneficial, and what the risks are.

What is fair chance hiring?

Everyone has learned lessons from past mistakes, but for many people with criminal records, finding meaningful work and rebuilding their lives afterward is a constant challenge.

Fair chance hiring means giving people with criminal records an equal opportunity for consideration during the hiring process. It’s not about ignoring the past. It’s about evaluating people based on their current skills, attitudes, and potential to contribute. It also creates more diverse workplaces since arrest and criminal records disproportionately affect communities of color.

There are several initiatives underway to support fair chance hiring practices, although specific laws and regulations vary by state and locale. These include the “Ban the Box” initiatives, where employers are encouraged to remove the “criminal history” checkbox from job applications, as well as the Fair Chance to Compete for Jobs Act of 2019, which is for federal agencies and contractors.

How will fair chance hiring impact your small business?

Fair chance hiring practices aim to make it easier for job candidates with records to get a foot in the door. Among the potential benefits for your business are:

Expanded candidate pools when the workforce is still highly competitive.
Opportunities to diversify your workplace.
The ability to positively impact your workplace and your community.
The federal Work Opportunity Tax Credit may be available to small businesses that hire people with criminal records as an additional incentive.
Research shows that employees with criminal records are as reliable as other workers – and less likely to quit their jobs, saving you money on turnover costs.

Even still, while there are no guarantees with any new hires, this isn’t to say that there aren’t risks to hiring people with criminal records, including that:

Without access to information regarding a past criminal history, it can be challenging to make informed hiring decisions. This can make you hesitant to offer a position.
Fair chance hiring doesn’t necessarily mean that every candidate is right for each job, and you could hire a candidate who isn’t a great fit for your position.
As an employer, you could face potential legal challenges if you reject a candidate based on their criminal history, as this can be seen as discrimination, so additional care and compliance are needed.

It’s natural to have concerns about the safety of your staff and customers as well as the financial well-being of your business, and hiring trustworthy employees is essential to all of these.

How to achieve fair chance hiring

Here is some additional guidance if you explore this for your business:

Make sure you understand the legal details: Talk to a labor attorney about your ideas, concerns, and processes to ensure your business follows current regulations. Learn how and when to perform lawful background checks that comply with fair chance hiring practices.

For example, there are certain things that you can and cannot include as part of a job application or tentative offer of employment. These regulations and laws vary by city and state, so get legal guidance on what is and isn’t allowed in your area.

Ask your local legal-aid offices, SCORE, or Small Business Development Center (SBDC) if small business legal counsel, training, and guidance for fair chance hiring is available.
Create clear hiring policies: Update job descriptions to focus on skills, capabilities, interests, and experiences. Train your managers and staff on unconscious bias and compliance. If this isn’t already required in your area, consider removing the “criminal history” checkbox on your business’s job application.
Build supportive partnerships: Connect with local re-entry programs that prepare people for employment. Meeting with them can help alleviate some of your concerns. Consider supporting new hires through mentoring programs within your business or in partnership with an agency, organization, or community member who can offer guidance and additional support.

Everyone deserves consideration

As a small business owner, you may have the opportunity to offer support to people in your community who simply need someone to evaluate them based on their skills, capabilities, and potential. Whether to move forward is up to you, but if fair chance hiring can benefit your business and your community, it may be worth exploring.