Returning
Citizens and Reducing Recidivism
Each year, over 610,000 individuals are released from
state and federal prisons in the United States.
There is an undeniable link between lack of investment in community
resources, socioeconomic disparities, and incarceration rates. Communities of color are disproportionately
impacted by incarceration. For example,
Black Michiganders represent roughly 14% of the state’s population, but a staggering 53% of the state’s incarcerated
population.
Many returning citizens face nearly
insurmountable barriers to successful reentry into the community, including a
lack of stable housing, food, and the skills needed to obtain meaningful
employment. Avoiding recidivism is
important for the well-being of these individuals, their families, their
communities, and society at large.
Research has shown that landing a job as
soon as possible after being released from incarceration is one of the keys to
avoiding recidivism. Even as the U.S.
labor market tightens and more than 10
million jobs remain unfilled, the job search can be daunting, and
even more so for an individual with a criminal record. According to the Prison Policy Initiative,
returning citizens face unemployment at a rate of over 27% higher than the rest of the
population.
Even if they get through the interview process,
returning citizens face an application that likely asks if they have ever been
convicted of a felony. For too many businesses, an affirmative answer to that
question is an almost automatic disqualifier.
To realize the full economic promise of our neighborhoods, and to
rebuild communities impacted by the criminal justice system and blight, we must
support the economic mobility of these returning citizens.
Key
Considerations for Employers
Small businesses and community-based
organizations have the power to be at the forefront of employing returning
citizens. Returning citizens have paid
their debt to society and deserve a chance to rebuild their own lives and
reintegrate into their communities.
Formerly incarcerated people can make great employees—loyal,
hard-working, and beneficial. That’s good for business, for the community and
for the individuals.
In addition to the benevolent and
community-oriented motivations for employing returning citizens, employers
should be aware of the legal and economic landscape for doing so. In particular, programs such as the Work
Opportunity Tax Credit and the Federal Bonding Program seek to incentivize
hiring returning citizens.
The
Work Opportunity Tax Credit
The Work Opportunity Tax Credit (WOTC) is a
federal tax credit available to employers for hiring and employing individuals
from certain groups who have faced significant barriers to employment,
including those who have previously been incarcerated. People who are hired within one year of being
convicted of a felony or being released from prison for a felony qualify under the
program. WOTC is a general business
credit provided under Section 51 of the Internal Revenue Code that is jointly
administered by the Internal Revenue Service and the U.S. Department of Labor.
The WOTC is available for wages paid to
eligible individuals who begin work on or before December 31, 2025. The WOTC may be claimed by any employer that
hires and pays or incurs wages.
Employers of all sizes are eligible to claim the WOTC. This includes both taxable and certain
tax-exempt employers located in the United States. On or before the day that an offer of
employment is made, the employer and the job applicant must complete Form 8850
(Pre-Screening Notice and Certification Request for the Work Opportunity
Credit). The employer has twenty-eight
calendar days from the new employee’s start date to submit Form 8850 to the
designated local agency located in the state in which the business is located
(where the employee works).
Federal
Bonding
The U.S. Department of Labor created the
Federal Bonding Program (FBP) in 1966 to provide fidelity bonds to employers
that hire vulnerable job seekers, such as those who have been involved with the
judicial system, individuals in recovery from a substance abuse addiction, or
economically disadvantaged youths and adults who lack work histories. The bonds issued by the FBP guarantee the job
honesty of job seekers to employers that want to hire them.
Employers receive the bonds, starting at
$5,000 in value, free-of-charge as an incentive to hire these applicants;
coverage is provided for the first six months of a selected individual’s term
of employment. The Federal Bonding
Program was designed to reimburse the employer for any loss due to theft,
forgery, larceny, or embezzlement and can be applied to any job, any employee
dishonesty committed on or away from the work site, and any full or part-time
employee paid wages. This program boasts
more than 50,000 job placements. Since its inception, bonds have been activated
only one percent of the time—a 99 percent success rate.
Other Legal and Economic Considerations
Instituting blanket bans on anyone with a
criminal record is likely discriminatory.
According to recent revisions of the Equal
Employment Opportunity Commission Guidelines on the subject of using
arrest and conviction records with regard to employment, employers should not
use a policy or practice that excludes people with certain criminal records if
the policy or practice significantly disadvantages individuals of a particular
race. Instead of refusing to hire anyone with a criminal background, employers
should make individualized assessments based upon the severity of the crime
committed, the amount of time that has passed since the crime was committed,
and the relevance of the committed criminal conduct to the job.
Even if not legally impermissible,
excluding returning citizens from the workforce has a significantly negative
economic impact. The Center for Economic and Policy Research
found that preventing people with a criminal record from fully reentering the
workforce costs the U.S. economy between $78 billion and $87 billion in
projected economic output.
Conclusion
It’s no secret that incarceration damages
the vitality of communities by undermining community cohesion and depriving
local institutions of a workforce.
According to the Second Chance Business Coalition, 82% of managers
report the value second chance employees bring to their organization as high or
higher than that of workers without records. Hiring returning citizens also
leads to a more diverse workforce by inviting unique perspectives.
Because state and local governments offer
an inconsistent patchwork of resources for employers and returning citizens,
this is an area ripe for innovation by small businesses. By being a part of programs like the Work
Opportunity Tax Credit and the Federal Bonding Program, and hiring returning
citizens, local entrepreneurs have the chance to address gaps in our current
workforce and lead economic development nationwide.
By Rebecca Fisher
For more information, the below are links to helpful
resources for Michigan employers seeking to hire returning citizens:
Michigan
Department of Licensing and Regulatory Affairs
● Encouraging Returning Citizens Through Workforce
Opportunities
Handbooks
● Federal Reentering Your Community, A Handbook
Michigan
Jobs for Returning Citizens
● View Job Opportunities by Employers Who Hire Returning
Citizens
Work
Opportunity Tax Credit
● United States Department of Labor: Work Opportunity Tax
Credit
Federal
Bonding Program
● The Federal Bonding Program, A US Department of Labor
Initiative
● State of Michigan, Fidelity Bonding Program
Michigan
Department of Corrections
● Michigan Offender Success / Prisoner Reentry Services
Michigan
State Industries Second Chance Employers
● Become a Second Chance Employer
