The Federal Bonding Program: An Incentive to Hire Justice-Involved Individuals
Some employers are hesitant to hire people with criminal backgrounds due to the risks they associate with these individuals. Research undermines many of the concerns around second-chance hiring, and incentives exist to encourage employers to give these people a chance. One study found that people with a criminal history “were no more likely to be fired” and “were less likely to quit—saving their firms a significant amount of money.”
For those employers still on the fence about participating in second-chance hiring, safeguards exist that can mitigate against certain risks. The U.S. Department of Labor created the Federal Bonding Program to provide free-fidelity bonds to employers as a job placement tool to assist formerly incarcerated individuals. This program has seen over 52,000 job placements. The benefit of the program extends beyond the hiring of a justice-involved individual, to include their families, and ultimately our communities by reducing the vicious cycle of recidivism.
Louisiana employers interested in the Federal Bond Program must apply through the Louisiana Workforce Commission, which certifies applicants and issues the bonds. The bond covers the first six months of employment and ranges from $5,000 to $25,000, with no deductible amount (employer gets 100% insurance coverage). After six months, there is an option to purchase additional bond coverage, provided the employee did not engage in dishonest behavior. The program covers any type of stealing: theft, forgery, larceny, and embezzlement. The program does not cover liability due to poor workmanship, job injuries or work accidents, nor does it function as a contract bond, performance bond or license bond sometimes needed to be self-employed.
While program requirements are standardized throughout the nation, participation rates in this program vary on a state-by-state basis. In Louisiana, participation in this program is vastly underutilized for the benefits that employers can reap. Louisiana businesses are missing out on the opportunity to improve the life-outlook of individuals in the communities which they serve.
In addition to the Federal Bonding Program, Louisiana law provides additional protections for employers. In 2014, R.S. 23:291(E) was enacted to protect employers, general contractors, premises owners, or other third parties from negligent hiring and supervision liability in many claims based solely on an employee’s past criminal convictions. Exceptions apply if the employee’s actions are substantially related to the nature of past crimes, or if the employee was convicted of a specified crime of violence or sex offense.
National studies show that nearly 1 in 3 Americans have some type of criminal record. Applied to Louisiana, this indicates that over 1.5 million Louisianans have a criminal background. Employers who consider the population of justice involved individuals to fill their workforce needs will find tax relief through programs such as the Federal Bonding Program, and certain legal protections in Louisiana law.
* The contents of this blog should not be construed as legal advice.