Fair Chance Act failures? Employers’ hiring of people with criminal records

Abstract

Research summary

We examine the efficacy of the California Fair Chance Act (CFCA) policy—legislative stipulations regarding employers’ hiring of individuals with criminal records—on practices and outcomes in two Southern California counties during 2021. We rely on survey and experiment data with 542 hiring decision makers to investigate employer and personal compliance with the CFCA, whether applicant appeals affect employers’ willingness to hire them, and heterogeneity in treatment effects across firms and industries. Close to 80% of hiring decision makers violate the CFCA by obtaining background information before they extend an offer, appeals have a minimal impact on hiring outcomes, and firm-level characteristics continue to shape hiring practices to some extent.

Policy implications

Although certain firms comply with the relatively new CFCA, most employers violate it by seeking applicant criminal background information, a practice that has profound consequences for those with criminal records as well as other disadvantaged groups. This finding underscores the discrepancy between de jure and de facto policy practices. Better statewide enforcement of the CFCA coupled with increased employer educational training could help reform it and improve policy adherence. Given it is a young policy, future research should continue to assess the CFCA's efficacy over time.