The Report > Review of the Re-Entry Process > Transition > Creation of Employment Opportunities

D: Managing the Key Transition Period

Policy Statement 21: Creation of Employment Opportunities

Promote, where appropriate, the employment of people released from prison and jail, and facilitate the creation of job opportunities for this population that will benefit communities.

Recommendation A: Educate employers about financial incentives, such as the Federal Bonding Program, Work Opportunity Tax Credit, Welfare-to-Work programs, and first-source agreements, which make a person who was released from prison a more appealing prospective employ

Businesses should be made aware that integrating individuals who have been released from prison and jail into the workforce can benefit the community and generate tax savings. To that end, workforce specialists and corrections administrators should determine what incentive programs are available to prospective employers of people released from prison or jail, and, when possible, facilitate connections between employers and program contacts.

PROGRAM DESCRIPTION
Federal Bonding Program Created in 1966 by the US Department of Labor, the Federal Bonding Program helps to alleviate employer concerns that at-risk job applicants will be untrustworthy workers by allowing employers to request - free of charge - fidelity bonds to cover people who, like like released individuals, cannot be covered by commercial insurance. A fidelity bond is a business insurance policy that protects the employer in case of any loss of money or property due to employee dishonesty. It is, in effect, a "guarantee" to the employer that the person hired will be an honest worker. Fidelity bonds issued through the Federal Bonding Program insure the employer, at no cost, against theft, forgery, larceny, or embezzlement by the employee. Either the employer or the job applicant can request that a bond be issued by the local agency certified by the Federal Bonding Program. More information is available at www.doleta.gov/documents/fedbonding.asp.
Work Opportunity Tax Credit The Work Opportunity Tax Credit (WOTC), authorized by the Small Business Job Protection Act of 1996 (P.L. 104-188), is a federal tax credit that encourages employers to hire job seekers who might otherwise be perceived as less desirable by reducing employers' federal income tax liability by as much as $2,400 per qualified new worker. Among the nine categories of new hires who qualify for the tax credit are people who have been convicted of felonies and are members of low-income families. The WOTC was reauthorized in March 2002, to extend the period of eligibility to workers hired up until January 2004. [1]   More information is available at www.uses.doleta.gov/wotcdata.asp.
Welfare-to-Work Tax Credit The Welfare-to-Work Tax Credit is a federal income tax credit that encourages employers to hire long-term family assistance recipients (which can include people released from prison or jail) who begin to work any time after December 31, 1997, and before January 2004. Established by the Taxpayer Relief Act of 1997, this new tax credit can reduce employers' federal tax liability by as much as $8,500 per new hire (depending on the amount that the new hire earns) over the first two years. Qualified wages are capped at $10,000 per year. More information is available at www.uses.doleta.gov/wtw.asp.

The Federal Bonding Program is particularly relevant to the employment of released individuals, and corrections administrators and workforce developers should ensure that potential employers are aware of it. Many prisons provide information on the bonding program directly to the inmate upon their release. Thus, the actual implementation of the program relies heavily on the individual marketing the program to potential employers. This marketing is more likely to be successful if employers have already been informed about the program.

Example: Project ReConnect, Office of Classification and Programs, Florida Department of Corrections

In order to encourage employers to hire people with criminal records, the program's literature concentrates on highlighting the availability of the Federal Bonding Program, as well as the Work Opportunity Tax Credit. Working in partnership with Workforce Florida, Inc., the program assists employers in accessing this funding.

In partnership with workforce leaders, departments of corrections can determine the best way to communicate with potential employers. Some states provide information packets to employers on general issues related to hiring individuals recently released from prison or jail.

Policymakers can also create first source agreements to require government or government-subsidized contractors to hire local residents or particular populations, including people with criminal records.

Example: Milwaukee Residency Preference Program (WI)

Chapter 309-41 of the Milwaukee Code of Ordinances stipulates that resident preference hiring is required for all construction contracting activities of the Department of Public Works. Twenty-five percent of worker hours must be performed by unemployed residents of "special impact areas," those urban areas determined to have the highest employment rates by the Federal Economic Development Administration. Esperanza Unida and Milwaukee Urban League frequently link contractors with trained or qualified workers from impact areas. (Both organizations offer job training programs to prepare candidates for employment.) After being hired by the Department of Public Works, employees from special impact areas are considered "target residents" for five years. Contractors have access to their information and may recruit them for future jobs.

The National H.I.R.E. Network

The National Helping Individuals with criminal records Re-enter through Employment (H.I.R.E.) Network, a project of the Legal Action Center, has developed useful resources for people working to improve the employment prospects for people with criminal records. These resources, available at www.hirenetwork.org, include the following:

  • A state-by-state analysis of employment restrictions and other laws that hamper the ability of people with criminal records to reintegrate into society
  • Information for employers on utilizing incentives and supports available when employing people released from prison or jail
  • State-specific guides for individuals with criminal records on how to obtain their records and prepare for a job search
  • State-specific listings of employment and legal resources
  • Guidelines for communities seeking to identify and implement strategies for the reintegration of individuals released from prison and jail

    • Identifying and supporting corporate champions and spokespeople for hiring individuals released from prison or jail will further promote education among potential employers and advance the goal of opening doors and removing barriers to employment. Chambers of Commerce and other employer associations may be excellent partners in the dissemination of materials to their members, hosting informational sessions, and even highlighting employers who successfully hire and retain released individuals. These associations may be hesitant to promote a stance that does not reflect the views of all of their members; therefore, workforce developers and corrections administrators should provide as much information and assistance as possible to allay these concerns.

    Example: Durham Reentry Initiative, Durham Chamber of Commerce (NC)

    As part of the Durham Reentry Initiative, the Durham Chamber of Commerce has hired an employment specialist to market the program to employers and help them access resources such as the federal bonding program, tax credits, and on-the-job training incentives. The program is funded through a grant from the Governor's Crime Commission.

    The Welfare-to-Work Partnership, which works with a population that, like people with criminal records, faces numerous obstacles to employment, provides another valuable model for outreach, education, and business leadership. While the formation of a new coalition may not be feasible or appropriate, corrections employment specialists should establish partnerships with existing business organizations for the purpose of raising awareness and removing stigmas around hiring formerly incarcerated individuals.

    Finally, policymakers and workforce developers should recognize the public stigma that may be associated with hiring people with criminal records and work with employers to diminish the potential negative effects on business of that stigma. Employers who hire people released from prison or jail may wish to have these actions kept confidential, or to restrict the number of released individuals that they hire. Corrections administrators and workforce specialists should respect these wishes, while continuing the public education process that is critical to continued outreach and job development.

    1. As noted, the WOTC (as well as the Welfare-to-Work Tax Credit) had an original reauthorization date of January 2004. Although the date has passed, neither program has yet been reauthorized; however, both programs have been extended until Congress takes some further action.

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