Entities

Office of Personnel Management (OPM) (2)
Topics and Issues

Credit checks for employment (3)

Employment Screening (20)

The OPM issued a final rule “governing when, during the hiring process, a hiring agency can request information typically collected during a background investigation from an applicant for Federal employment.” 88 Fed. Reg. 60317 (Sept. 1, 2023).

Summary:

  • Legal authority. The OPM promulgated this rule under the Fair Chance to Compete for Jobs Act of 2019 (Fair Chance Act). This Act was part of the National Defense Authorization Act for Fiscal Year 2020 (Pub. L. 116–92), Sec. 1121 – 1124, amending 5 U.S.C. Sec. 9201 – 9206.
  • CFR provisions. The OPM is amending to or adding 5 CFR Part 302, 317, 319, 330, 731, 754, and 920.
  • Summary of Act.
    • As noted by OPM, with some exceptions, “the Fair Chance Act prohibits Federal agencies and Federal contractors acting on their behalf from requesting that an applicant for Federal employment disclose criminal history record information before the agency makes a conditional offer of employment to that applicant. The Fair Chance Act identifies some positions to which the prohibition shall not apply.”
    • The Fair Chance Act contains the same prohibition with respect to criminal history, as current OPM rules, and does not address credit history. According to OPM, “the Fair Chance Act has elaborated on the methods of inquiry not permitted and provides for certain exceptions to the rule. Furthermore, the Fair Chance Act requires OPM, when making additional exceptions, to give due consideration to positions that involve interaction with minors, access to sensitive information, or managing financial transactions.”
  • Timing of criminal inquiry.
    • There is a requirement for the timing of collection of criminal history information.
    • OPM issued a final rule in 2016 (81 Fed. Reg. 86555 (Dec. 1, 2016)). The federal ban-the-box rule was intended to “conform regulatory requirements to what OPM believed was already the predominant agency practice, as many agencies already employed the practice of waiting until the later stages of the hiring process to collect criminal history information.”
    • The 2016 rule, according to OPM, fit the goals of a Presidential Memorandum, Enhancing Safeguards to Prevent the Undue Denial of Federal Employment Opportunities to the Unemployed and Those Facing Financial Difficulty Through No Fault of Their Own (January 31, 2014). The rule also met the goals of the Federal Interagency Reentry Council, OPM said.
    • Current OPM regulations at 5 CFR parts 330 and 731 “prevent agencies, unless an exception is granted by OPM, from making inquiries into an applicant’s criminal or credit history of the sort asked on OPM Optional Form (OF) 306, titled Declaration for Federal Employment, in the ‘Background Information’ section or other forms used to conduct suitability investigations for Federal employment unless the hiring agency has made a conditional offer of employment to the applicant.”
  • Credit history.
    • “OPM’s revision of § 330.1300 retains its prohibition on making inquiries into a job applicant’s credit history and removes any reference to criminal history. The prohibition on using criminal history is addressed in part 920.”
    • The Fair Chance Act does not specifically address the timing of suitability inquiries into a job applicant’s credit history. However, credit history is discussed in the Presidential Memorandum on Enhancing Safeguards to Prevent the Undue Denial of Federal Employment Opportunities to the Unemployed and Those Facing Financial Difficulty Through No Fault of Their Own. OPM’s commentary noted that this provision is “still in effect. In accordance with this Memorandum, applicants should not face undue obstacles to Federal employment because they are unemployed or face financial difficulties through no fault of their own. Agencies must take steps to ensure fair treatment of all applicants, as well as Federal employees, throughout the recruiting and hiring process. One of the ways that Federal agencies can ensure fair treatment for applicants who have experienced periods of unemployment and/or financial difficulty is to avoid unnecessary screening mechanisms, especially at early stages of the hiring process, before a candidate’s qualifications have been fully assessed. Consistent with existing policy and the Presidential Memorandum, OPM’s revision of § 731.103(d)(1) retains the prohibition on making inquiries into a job applicant’s credit history and updates the reference to the prohibition relating to criminal history to align with the new part 920, which reflects the requirements of the Fair Chance Act. Both reduce the opportunity for information to be misused at the preliminary screening stage.”
  • Complain governance. There is a complaint procedures “under which an applicant for a position in the civil service may submit a complaint, or any other information, relating to compliance by an employee of an agency in reference to the timing of collection of criminal history information.”
  • Adverse actions. The “final rule outlines adverse action procedures that apply when it is alleged that an agency employee has violated the requirements and appeal procedures that will be available from a determination by OPM adverse to the Federal employee.”
  • Relationship to Title VII. “Nothing in this rule shall be read in derogation of any individual’s rights under Title VII.
  • With some exceptions, the Fair Chance Act prohibits Federal agencies and Federal contractors acting on their behalf from requesting that an applicant for Federal employment disclose criminal history record information before the agency makes a conditional offer of employment to that applicant. The Fair Chance Act identifies some positions to which the prohibition shall not apply.
  • Complaint process. The rules establish a “complaint procedures under which an applicant for a position in the civil service may submit a complaint, or any other information, relating to compliance with the Fair Chance Act by an employee of an agency.”
  • Penalties. The rules establish “minimum penalties and procedures to be followed before a penalty may be assessed, and requires OPM to establish appeal procedures available in the event of a determination adverse to the Federal employee.”