Reducing Employment Barriers for People with Criminal Records.

• Author: Baier, Samuel K.

1. INTRODUCTION 220 II. BACKGROUND 220 A. Why Employers Disfavor Applicants with Criminal Records 221 B. Employment Barriers' Negative Effects on the Public 223 C. Financial Benefits to Employers That Hire People with Criminal Records 227 D. Risk-Mitigation Benefits for Employers That Hire People with Criminal Records 228 E. Existing Non-Financial Policies Designed to Reduce Employment Barriers for People with Criminal Records 229 1. Ban-the-Box Statutes 229 2. Certificates of Employability 231 3. Occupational License Reform 232 4. Decarceration 233 F. Organizational Silos' Influence on Employers' Willingness to Consider Applicants with Criminal Records 234 G. Psychological Tendencies Influencing Employers' Willingness to Consider Applicants with Criminal Records 235 1. Preference for More Immediate Incentives 235 2. Preference for More Certain Incentives 236 3. Endowment Effect 236 H. Advance Tax Credits Compared to Existing Policies Designed to Reduce Employment Barriers for People with Criminal Records 237 III. ANALYSIS 238 A. Shortcomings of Ban-the-Box 238 B. Shortcomings of Existing Financial and Risk-Mitigation Policies 241 IV. RECOMMENDATION 242 A. Transitioning to an Advance Tax Credit Model 242 B. Expanding Existing Certificate of Employability, Occupational License Reform, and Decarceration Policies 245 V. CONCLUSION 246 I. INTRODUCTION

   People with criminal records are often productive, valuable employees. Nevertheless, employers continue to undervalue applicants with criminal records. This Note argues (1) this disconnect is largely caused by background psychological tendencies valuing more immediate and more certain rewards over temporally distant and less certain rewards, and (2) low-cost or cost-neutral alterations to the policies that already provide benefits to employers who hire people with criminal records would result in reduced employment barriers for those people. Such alterations should take the form of (1) replacing future, less-certain financial and risk-mitigation policies with a more certain advance tax credit of an equivalent present value, and (2) expanding existing certificate of eligibility, occupational license reform, and decarceration policies.

   This Note begins by discussing why employers shy away from applicants with criminal records and the negative effects on the public when people with criminal records face employment barriers. It then discusses the financial and risk-mitigation benefits available to employers that hire people with criminal records. Next, it details the non-financial policies designed to reduce employment barriers for people with criminal records: ban-the-box statutes, certificates of employability, occupational license reform, and decarceration. After an overview of various organizational and psychological factors that influence employers' willingness to consider applicants with criminal records, it analyzes the shortcomings of existing barrier-reduction policies. It concludes by recommending that (1) existing financial and risk-mitigation policies be replaced with an advance tax credit of equivalent value and (2) existing non-financial policies be expanded.

2. BACKGROUND

   People with criminal records face significant difficulties in obtaining employment. (1) Some employers have blanket policies against hiring people with any sort of criminal record. (2) Even among employers willing to consider hiring people with criminal records, candidates with criminal records are less likely to progress through the application process--an effect present for both felony and misdemeanor records, which persists across racial lines. (3) A 2017 study of employers found 78% used applications asking about a candidate's criminal record. (4) A 2018 survey of 2,280 full-time employees found 73% of Human Resources ("HR") professionals--from a sample population of 1,228--reported their companies conduct criminal background checks for candidates, while "nearly all [non-HR] workers report[ed] that their company conducts some sort of pre-hire screening." (5) On the same survey, 54% of HR professionals reported applicants who fail pre-employment screening are dropped from the applicant pool. (6) A significant minority of HR professionals suggested a pre-employment flag did not prompt their company to verify the accuracy of the results (21%) or allow the candidate to provide an explanation (26%). (7) Such conditions create barriers to economic opportunity that can manifest themselves even years after a person has concluded his or her involvement with the criminal legal system--e.g., a pre-employment question that asks whether an applicant has "ever" been convicted of a crime, or a background check that reveals a years-old arrest that never resulted in charges brought. (8) These barriers are even higher for people of color. (9)

   1. Why Employers Disfavor Applicants with Criminal Records

      There are numerous reasons why employers disfavor applicants with criminal records. (10) First, the public has a generally negative view of people with criminal records (11) and often supports harsher sentences than judges. (12) Second, employers may have concerns about employees with criminal records bringing "counterproductive" behavior into the workplace. (13) This attitude persists despite research suggesting "former criminal convictions are not a valid predictor of counterproductive work behavior." (14) Third, employers are increasingly concerned about negligent hiring claims because technology makes it easier to find and validate information about candidates' criminal records. (15) This concern is growing despite no corresponding increase in negligent hiring cases; in fact, research suggests that "the risk an employer will be successfully sued for negligent hiring in any given year [is] no more than a fraction of 1%." (16) Fourth, employers in certain industries must comply with regulatory requirements that presumptively bar candidates with even minor criminal records. (17) Finally, risk aversion likely leads employers to disfavor candidates with criminal records even when incentives are given to hire such candidates. (18) When a hiring manager is making the decision not to hire a person with a criminal record, they have no shortage of arguments to justify that decision--an observation that is consistent with reduced employment outcomes for people with criminal records. (19)

   2. Employment Barriers' Negative Effects on the Public

      Employment barriers for people with criminal records produce a number of negative effects on the public. (20) First, some criminal background checks contain errors, which may result in applicants losing out on a job over a crime they did not commit. (21) A 1999 study of the FBI's Interstate Identification Index found that 5.5% of applicants failed a "name check" (22)--a type of background check that includes "not only a person's name, but also... other personal identifiers such as sex, race, date of birth and Social Security Number"--despite having no FBI criminal record (i.e., these individuals were false positives). (23) Among all applicants who failed the name check (both false positives and true positives), 32.6% did not have an FBI criminal record. (24) The private sector struggles with errors as well. According to the National Consumer Law Center, private background check companies "routinely" make a variety of mistakes leading to misidentification. (25) This scenario is common enough that the Federal Trade Commission, Consumer Finance Protection Bureau, and various state agencies all address the question of what an applicant can do if he or she suspects an error on a background check. (26)

      Second, an individual's interaction with the criminal legal system can lead to collateral consequences even if that individual is innocent of any crime. For instance, although some employers require applicants to disclose arrests, not every arrest is indicative of underlying criminal conduct. (27) Almost one-third of arrests result in charges that are dismissed, and some reasons for dismissal (e.g., mistaken identity or a false report) largely foreclose the possibility of an actual criminal being released on legal or technical grounds. (28) Factually innocent defendants may also have strong legal and economic incentives to plead guilty. (29) From a legal standpoint, taking a criminal case to trial has become a "roll [of] the dice" where defendants either win or face a significantly steeper penalty than what is offered in a plea bargain. (30) From an economic standpoint, an innocent defendant must consider the expense of a trial, and often the expense of posting bail or the economic consequences (e.g., losing one's job) of remaining in jail if they do not (or cannot) post bail. (31) The prospect of accepting a plea bargain that involves immediate release is particularly strong in cases where bail is a factor; a 2011 study from Harris County, Texas reported that 46% of misdemeanor defendants and 69% of felony defendants were unable to post bail. (32) Plea bargains may also take the form of a deferred disposition, which allows a defendant to avoid most punishment upon completion of probation; such a deal can be too good to refuse, even for an innocent defendant. (33) Further, false confessions are shockingly easy to elicit. (34) Police interrogators can use false evidence to extract confessions; (35) this interrogation method is "permissible, recommended under certain circumstances, and frequently used;" (36) and multiple studies using false evidence manipulation have led upwards of 90% of participants to confess to something they did not do. (37) False confessions have been documented outside of the laboratory, too. For example, at least 200 people "volunteered false confessions to the 1932 kidnapping of Charles Lindbergh's baby son," and "[i]n nearly 30% of [DNA exoneration] cases, false confessions were a contributing factor." (38) Employment barriers for people with...