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Rule2023-18242

Fair Chance To Compete for Jobs

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Published

September 1, 2023

Effective

October 2, 2023

Issuing agencies

Personnel Management Office

Abstract

The Office of Personnel Management (OPM) is issuing final regulations governing when, during the hiring process, a hiring agency can request information typically collected during a background investigation from an applicant for Federal employment. In addition, OPM is issuing new regulations establishing the requirement for the timing of collection of criminal history information and for governing 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. Furthermore, 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. Nothing in this rule shall be read in derogation of any individual's rights under Title VII. This rule implements the Fair Chance to Compete for Jobs Act of 2019 (Fair Chance Act). 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. It also requires OPM to establish 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, establishes 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.

Full Text

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<title>Federal Register, Volume 88 Issue 169 (Friday, September 1, 2023)</title>
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[Federal Register Volume 88, Number 169 (Friday, September 1, 2023)]
[Rules and Regulations]
[Pages 60317-60333]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-18242]

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Rules and Regulations
Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents.

========================================================================

Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 /
Rules and Regulations

[[Page 60317]]

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 302, 317, 319, 330, 731, 754, and 920

RIN 3206-AO00

Fair Chance To Compete for Jobs

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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SUMMARY: The Office of Personnel Management (OPM) is issuing final
regulations governing when, during the hiring process, a hiring agency
can request information typically collected during a background
investigation from an applicant for Federal employment. In addition,
OPM is issuing new regulations establishing the requirement for the
timing of collection of criminal history information and for governing
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. Furthermore, 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. Nothing in this rule shall be read in
derogation of any individual's rights under Title VII. This rule
implements the Fair Chance to Compete for Jobs Act of 2019 (Fair Chance
Act). 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. It also requires
OPM to establish 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, establishes 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.

DATES: Effective October 2, 2023.

FOR FURTHER INFORMATION CONTACT: Timothy Curry by email at
<a href="/cdn-cgi/l/email-protection#f2979f829e9d8b97979391919d879c8693909b9e9b868bb29d829fdc959d84">[email&#160;protected]</a> or by telephone at (202) 606-2930, with
respect to 5 CFR part 754; Lisa Loss by email at <a href="/cdn-cgi/l/email-protection#88dbfde1fccdc9c8e7f8e5a6efe7fe">[email&#160;protected]</a> or by
telephone at (202) 606-7017, with respect to 5 CFR part 731; and Mike
Gilmore by email at <a href="/cdn-cgi/l/email-protection#ffb2969c979e9a93d1b8969392908d9abf908f92d1989089">[email&#160;protected]</a> or by telephone at (202)
936-3261, by fax at (202) 606-4430, or by TTY at (202) 418-3134for all
other parts.

SUPPLEMENTARY INFORMATION:

Background

Provisions of the Fair Chance Act were incorporated into the
National Defense Authorization Act for Fiscal Year 2020 (Pub. L. 116-
92), which was signed into law by the President on December 20, 2019.
The Fair Chance Act places limitations on agency requests for criminal
history record information prior to a conditional offer of employment.
It also requires a complaint process by which applicants for
appointment to a position in the civil service may submit a complaint,
or any other information, relating to compliance with the requirements
of the Fair Chance Act. Furthermore, the Fair Chance Act establishes
requirements and procedures regarding penalties for violations. Because
of these statutory requirements, OPM issued proposed regulations
published at 87 FR 24885, April 27, 2022, pertaining to when, during
the hiring process, a hiring agency can request information typically
collected during a background investigation from an applicant for
Federal employment.

The Existing `Ban the Box' Rule

On December 1, 2016, OPM issued a final rule at 81 FR 86555 that
revised its regulations pertaining to when, during the hiring process,
a hiring agency can request information typically collected during a
background investigation from an applicant for Federal employment. The
changes were to promote compliance with Merit System Principles as well
as the goal of the Federal Interagency Reentry Council and the
Presidential Memorandum of January 31, 2014, ``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,'' otherwise known as ``Ban the Box'' rules. As noted by OPM
when it first promulgated the rule, the intent of the rule was 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.
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. The
Fair Chance Act contains the same prohibition with respect to criminal
history and does not address credit history. 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.
The OF 306 is used to assist OPM and Federal agencies in
determining a person's suitability for employment as well as to provide
other information that is required of applicants. Applicants must
answer the questions on the form before they can be appointed or
converted to a new appointment in the competitive, excepted, or Senior
Executive Service. For most of the information on the OF 306, agencies
may determine the timing of the

[[Page 60318]]

collection of the OF 306 in the application and hiring process;
however, unless permitted by law, they may not ask applicants to answer
the questions on the form that address criminal history information
until a conditional offer of employment has been extended. Further,
unless they have been granted an exception by OPM, agencies may not ask
individuals to complete the question that relates to credit history.
Most applicants are likely to be asked to complete the form after a
conditional offer of employment has been made. OPM's authority to
direct Federal agencies to use the OF 306 is found in 5 U.S.C. 1302,
3301, 3304, 3328, 7301, and 8716; 5 CFR part 731; and E.O. 10577 and
E.O. 13467, as amended. The OF 306 is one aspect of vetting that can be
collected, in accordance with the provisions outlined in this rule, and
used to begin to assess suitability in advance of the initiation of a
required background investigation.

Explanation of OPM's Final Rule Under the Fair Chance Act

1. Restrictions on Preemployment Criminal Inquiries

OPM is issuing these provisions under section 1122(b)(1) of the
Fair Chance Act, under which the Director of OPM ``shall issue such
regulations as are necessary to carry out chapter 92 of title 5, United
States Code (as implemented by this subtitle).'' OPM is also issuing
these provisions to implement the requirements of 5 U.S.C. 9202(c)(2),
as added by the Fair Chance Act, which requires the OPM Director to
issue regulations identifying positions with respect to which the
prohibition shall not apply giving due consideration to positions that
involve interaction with minors, access to sensitive information, or
managing financial transactions, beyond those already identified in the
statute.
Unless otherwise required by law, an employee of an agency may not
request, in oral or written form (including through the Declaration for
Federal Employment (OF 306) or any similar successor form, the USAJOBS
internet website, or any other electronic means) that an applicant for
an appointment to a position in the civil service disclose criminal
history record information regarding the applicant before the
appointing authority extends a conditional offer to the applicant.
Under the provisions of the Fair Chance Act, this prohibition does not
apply under the following circumstances:
<bullet> Determinations of eligibility described under clause (i),
(ii) or (iii) of 5 U.S.C. 9101(b)(1)(A) i.e., for (i) access to
classified information; (ii) assignment to or retention in sensitive
national security duties or positions; or (iii) acceptance or retention
in the armed forces; or
<bullet> Recruitment of a Federal law enforcement officer (defined
in 18 U.S.C. 115(c)).
The Fair Chance Act applies to all appointments in the Executive
branch; i.e., to appointments in the competitive service, the excepted
service, and the Senior Executive Service (SES). Therefore, OPM is (1)
revising the provisions in 5 CFR part 330, subpart M, which currently
implements the Ban the Box rules for the competitive service, by
removing the reference to criminal history so that the Fair Chance Act
can be implemented for all types of appointments in a newly created
part 920; (2) preserving the existing Ban the Box rules restricting
pre-employment credit inquiries for appointments in the competitive
service; and (3) amending part 731 to incorporate the exceptions to
this provision as established by law and to refer agencies to the newly
created part 920 for guidance on other types of positions for which the
prohibition under the Fair Chance Act for collecting criminal history
information will not apply. For the convenience of the reader, we are
placing these provisions in the newly created part 920 rather than
repeat the provisions in parts 302, Employment in the Excepted Service;
317, Employment in the Senior Executive Service; 319, Employment in the
Senior-Level and Scientific and Professional Positions; 330,
Recruitment Selection, and Placement (General); and 731, Suitability.
OPM also amends parts 302, 317, and 319 to include a reference as a
reminder that these types of positions are subject to the provisions of
the Fair Chance Act found in chapter 92 of title 5, U.S.C., and 5 CFR
part 920.
This final rule will continue to permit agencies to make an
objection, pass-over request, or suitability determination on the basis
of criminal or credit history record information only after the
applicant's qualifications for the position being filled have been
fairly assessed and the hiring agency has made a conditional offer of
employment to the applicant. Exceptions previously granted to agencies
by OPM pursuant to 5 CFR part 330 subpart M (i.e., the Ban the Box
provisions) continue to be valid.

2. Complaint, Adverse Action, and Appeal Procedures

Under section 9203, the Fair Chance Act requires the Director of
OPM to establish and publish procedures under which an applicant for an
appointment to a position in the civil service may submit a complaint,
or any other information, relating to compliance by an employee with 5
U.S.C. 9202. Under the provisions of section 9204, the Fair Chance Act
further establishes minimum requirements regarding penalties for
violations of the Fair Chance Act and provides that such penalties may
be entered only after notice to the Federal employee accused and an
opportunity for a hearing on the record (thereby, indirectly,
establishing minimum procedural requirements before an adverse
determination can be made). Finally, the Fair Chance Act requires the
Director of OPM, by rule, to establish procedures providing for an
appeal from any adverse action taken under section 9204 by no later
than 30 days after the date of the action. The Fair Chance Act further
notes in section 9205 that an adverse action taken under the Fair
Chance Act shall not be subject to the procedures under chapter 75 of
title 5 or, except as provided for in the appeal process established
under the Fair Chance Act, be subject to appeal or judicial review.
Therefore, OPM is issuing final regulations governing 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 with section 9202 of title 5,
and adverse action and appeal procedures for alleged violations of
section 9202 of title 5.

Public Comments

In response to the proposed rule, OPM received 20 comments during
the 60-day public comment period from individuals (including Federal
employees), organizations, and Federal agencies. At the conclusion of
the public comment period, OPM reviewed and analyzed the comments. In
general, the comments ranged from categorical rejection of the proposed
regulations to strong support. OPM reviewed and carefully considered
all comments and arguments made in support of and in opposition to the
proposed changes. The comments are summarized below, together with a
discussion of the suggestions for revision that were considered and
either adopted, adopted in part, or declined, and the rationale
therefor. Finally, comments beyond the scope of the proposed changes or
which were vague or incomplete are not addressed below.
In the first section below, we address general or overarching
comments. In the sections that follow, we address comments related to
specific portions of the regulations.

[[Page 60319]]

General Comments

Some commenters offered support for the Fair Chance Act because it
provides individuals who have been incarcerated an opportunity to be
considered for employment based upon their skills and experience rather
than what may be irrelevant, inaccurate, or stale criminal history
records. One commenter shared their perspective that wrongful
convictions happen often, and individuals who did commit the crime have
time to reflect and change for the better. This commenter opined that
the requirements of the Act should be enough for them to get another
chance at life and redeem themselves. Similarly, another commenter
shared their perspective that a lot of people are incarcerated for
unfair reasons, and they and others who perhaps did commit the crime
deserve a second chance.
OPM agrees that the Fair Chance Act advances important goals in
that it places limitations on actions Federal agencies may take in the
hiring process that would be detrimental for individuals who have been
incarcerated. OPM's implementing regulations allow job applicants to
present their qualifications and abilities for assessment and to be
considered solely based on their merits without the specter of a
criminal record during the selection process. Consistent with the
statute, the regulations provide the opportunity for a qualified
applicant with a criminal history record to advance in the hiring
process in the same manner as a qualified applicant without a criminal
history record.
Several organizations commended OPM for taking steps to implement
strong regulations. These organizations stated their support for ``the
adoption of final regulations that provide additional clarity to both
hiring agencies and the public, allow for effective enforcement of the
new law, and reinforce the clear language and intent of the Fair Chance
Act.'' In addition, the organizations expressed gratitude for OPM's
commitment to effectively implementing the Fair Chance Act. These
organizations also requested that OPM incorporate additional
protections and clarifications into the final rule. OPM notes that
several public comments resulted in additional clarifications and
changes in this final rule. These changes are addressed below in their
respective areas of the Supplementary Information section of this
preamble. OPM will address other comments in guidance that it will be
issuing to assist agencies with implementing the requirements of this
rule.
As for more general comments, one commenter stated that the
proposed rule ensures ``criminals gain employment.'' This commenter
characterized the rule as a political tactic and questioned how the
proposed rule would help the government other than add union employees.
Also, the commenter shared their observation of numerous employees
leaving the government to seek a ``higher professional working
atmosphere.''
These final implementing regulations resulted from a bipartisan law
that enjoyed Congressional support across two Administrations. The
scope of OPM's regulations is determined by the contours of the law
Congress drafted and directed OPM to implement. As such, OPM will not
make any revisions to the rule based on this comment. This regulation
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. This final rule does
not eliminate the requirement of agencies performing their due
diligence in examining an applicant's criminal history or other
relevant background information once a conditional offer of employment
has been extended. Further, this regulation improves the government by
supporting the Administration's initiative on diversity, equity,
inclusion, and accessibility (DEIA), further positioning the Federal
government as a model employer, and providing opportunities for
talented, skilled individuals--both with and without a criminal history
record--to put their talents to use to advance the mission of the
Federal Government.
OPM disagrees that this rule will diminish professionalism in the
Federal workforce. As stated in the regulatory impact analysis of this
rule, studies show that employment is the single most important factor
in reducing recidivism; people with criminal history records are no
more likely to be fired for misconduct than people without records; and
they are statistically less likely to quit, which saves employers in
turnover costs. Therefore, the regulations benefit not only the Federal
government as an employer but also American society as a whole and at
the family and community levels.
Two individuals suggested changes based on the type of offense
committed. One commenter, who generally supported the rule, stated that
the rule may be too broad in removing access to criminal history. The
individual suggested that people who have been convicted of sexual or
violent offenses still be screened, but people whose records do not
reflect a threat to safety have that barrier removed. Another commenter
asked OPM to create an exception to the proposed rule for sexual
offenders, specifically, suggesting that this exception would permit
agencies to eliminate applicants who are sexual offenders from the
hiring process before determining whether they qualify for a position.
OPM cannot adopt these suggestions because they are contrary to the
text of the Fair Chance Act. The Fair Chance Act makes it unlawful,
with few exceptions, to request criminal history from an applicant
before the agency makes a conditional offer of employment to that
applicant. As discussed, OPM's implementing regulations allow job
applicants to present their qualifications and abilities for assessment
and be considered based on their merits without the specter of a
criminal history record during the selection process. The regulations
provide the opportunity for qualified applicants with criminal history
records to advance in the hiring process just as a qualified applicant
without a criminal history record would advance. Moreover, in most
cases, the separate personnel vetting determination can and should
occur after the selection process and a conditional offer of employment
has been made, thereby separating criminal history as an aspect of the
vetting process from factors that are relevant at the time of the
initial hiring assessment.
Two agencies commented that they already make offers of conditional
employment before requesting criminal history, so this rule will have
no negative impact to their policies and procedures.
Below we summarize the public comments that are most appropriately
addressed by reference to the specific portion of the regulations to
which the comments applied.

Part 302--Employment in the Excepted Service

This final rule adds Sec. 302.107 to subpart A to incorporate the
requirements of the Fair Chance Act. This section addresses when
inquiries into an applicant's criminal history may be made and
circumstances under which exceptions may be requested and considered by
OPM.
OPM received no comments on this section.

[[Page 60320]]

Part 317--Employment in the Senior Executive Service

This final rule adds Sec. 317.202 to subpart B to incorporate the
requirements of the Fair Chance Act. Section 317.202 addresses when
inquiries into an applicant's criminal history may be made and
circumstances under which exceptions may be requested and considered by
OPM.
OPM received no comments on this section.

Part 319--Employment in Senior-Level and Scientific and Professional
Positions

This final rule adds Sec. 319.106 to subpart A to incorporate the
requirements of the Fair Chance Act. Section 319.106 addresses when
inquiries into an applicant's criminal history may be made and
circumstances under which exceptions may be requested and considered by
OPM.
OPM received no comments on this section.

Part 330--Recruitment, Selection, and Placement (General)

Part 731--Suitability

The Fair Chance Act does not specifically address the timing of
suitability inquiries into a job applicant's credit history. 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 of January
31, 2014, however, addresses credit history, and 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 Sec. 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.
Several organizations addressed the proposed changes to this part
in conjunction with changes to part 920. The comments that address the
content of both parts are summarized below. Several organizations
commented that language in Sec. 731.103(d)(1) is less clear than in
Sec. 920.102(b) with regard to positions that are exempt because the
hiring agency is required by statute to make inquiries into an
applicant's criminal history prior to making a conditional offer. The
organizations raised concerns that the language may be misconstrued as
allowing exemptions any time consideration of criminal history is
required by law, even if the timing is not mandated by law. OPM agrees
and will make a change for clarity, by striking the portion of the
sentence reading ``Except as required by law.''

Part 754--Complaint Procedures, Adverse Actions, and Appeals for
Criminal History Inquiries Prior to Conditional Offer

An organization expressed support for OPM's proposed new part 754,
which the organization stated ``creates a compliance mechanism for
aggrieved applicants affected by `Ban the Box' violations and
disciplinary mechanisms for employees who continue to unlawfully
require pre-offer of disclosure of criminal or credit history in
violation of the Fair Chance Act.''

Subpart A--Complaint Procedures

The Fair Chance Act directs OPM to establish and publish procedures
under which an applicant for an appointment to a position in the civil
service may submit a complaint, or any other information, regarding
compliance with 5 U.S.C. 9202. Based on these unique requirements, OPM
adds a new 5 CFR part 754 to implement the complaint procedure
requirements of the Fair Chance Act. The rule appears in subpart A of 5
CFR part 754 as ``Complaint Procedures.'' This final rule provides the
regulatory framework for the complaint process for job applicants to
allege violations of the nature described in the Fair Chance Act. This
regulatory scheme is significant because job applicants do not have the
ability to use any existing statutory or regulatory complaint
procedures that may be available for other employment-related
complaints, such as those of the U.S. Office of Special Counsel, which
investigates prohibited personnel practices.
Subpart A establishes procedures under which an applicant for an
appointment to a position in the civil service may submit a complaint,
or any other information, relating to compliance by an employee of an
agency with section 9202, as required by section 1122(b)(1) of the Fair
Chance Act.

Section 754.101 Coverage

This final rule describes who may use the agency complaint
procedures and the actions covered and provides key terms that track
the definitions in part 920.
OPM received no comments on this section.

Section 754.102 Agency Complaint Process

This section establishes the complaint process to be utilized for
actions taken under this part. The process includes respective roles
for OPM and Federal government agencies.
Several organizations observed that OPM's proposed regulations
include key protections and clarifications, which the organizations
urged OPM to retain in the final rule, including the complaint and
investigation process as required by the Fair Chance Act. In addition
to the strengths they recognized in the proposed regulations, the
organizations urged OPM to incorporate additional protections and
clarifications into the final rule, including ensuring the complaint
processes implemented by hiring agencies are fair and transparent.
These organizations expounded that, in addition to individual agency
processes for receiving complaints, OPM should clarify some of the
elements of the complaint process as well as enhance

[[Page 60321]]

protections as reflected immediately below.
Regarding Sec. 754.102(a), some organizations recommended that OPM
develop a centralized means for receiving complaints and forwarding
them to the appropriate agency for an agency investigation.
Organizations expressed concern that, while the rule requires each
hiring agency to establish and publicize systems for receiving
complaints from applicants regarding violations of the Fair Chance Act,
some job applicants will likely remain confused as to whom to submit
such a complaint or may feel more comfortable submitting a complaint
directly to OPM instead of to the hiring agency that likely just
rejected them for a job based on their criminal history record. These
organizations posited that, even if OPM does not implement a
centralized means for receiving Fair Chance Act complaints, the
regulations should provide that any complaint related to a violation of
the Fair Chance Act that is submitted directly to OPM shall be
forwarded to the appropriate agency for investigation and will be
considered timely if it was submitted to OPM within the time period
described in the regulations.
OPM is confident that agencies will develop complaint processes
that are fair and transparent, making centralized complaint intake
unnecessary. Notably, the rule requires that agencies include
information about the complaint process in their job announcements.
This public notice aids in accomplishing complaint process
transparency. Therefore, OPM will decline to adopt the organizations'
recommendations to establish a centralized compliant process. As stated
in the proposed rule, OPM believes there is ample precedent for
agencies to establish internal procedures for receipt and investigation
of employment-related complaints against the agency and to accomplish
these tasks in a fair and impartial manner. Moreover, adding a
procedural layer that involves OPM receiving a complaint and forwarding
it to the appropriate agency adds time to the process that may delay
resolution of the matter which would disserve applicants. Additionally,
OPM does not have the resources necessary to effectively administer a
new government-wide complaint process, and we have concluded that it is
more efficient and cost-effective for agencies to leverage their
existing resources. That said, to the extent OPM receives a complaint,
OPM will promptly forward it to the appropriate agency.
As stated in the proposed rule, direct submission of complaints to
agencies is a long-standing process with which the public is familiar.
For example, currently, applicants submit Federal sector equal
employment opportunity (EEO) complaints to agencies rather than to the
Equal Employment Opportunity Commission (EEOC). Thus, if OPM were to
change this long-standing process as the commenter seeks, it may
create--not prevent--confusion.
To ensure applicants are informed, OPM encourages agencies to
widely publicize information about the Fair Chance Act complaint
process to job applicants, and, as stated above, agencies' job
announcements must include information about the complaint process. OPM
also notes that one safeguard the rule affords is that applicants have
an opportunity to submit a complaint or any other information after 30
days if the applicant's rights to do so were not properly publicized.
In addition, the agency must conduct outreach to inform an applicant of
the procedure for submitting a complaint when it has reasonable cause
to believe that the applicant is attempting to file a complaint. The
employing agency has the ability to extend the 30-day time limit when
an applicant shows that the applicant was not notified of the time
limits and was not otherwise aware of them, that the applicant did not
know and reasonably should not have known that the non-compliance with
section 9202 and part 920 occurred, to consider a reasonable
accommodation of a disability, or for other proper and adequate reasons
considered by the agency. The agency must apply the regulatory
provisions to determine if a complaint forwarded by OPM was timely
filed, or if there is proper and adequate basis for an extension.
Additionally, with respect to Sec. 754.102(a), an organization
recommended that OPM consider ``whether a more robust set of standards
is needed to ensure that agencies will not brush aside complaints.''
The organization stated that allowing complainants the option of
submitting complaints directly to OPM in lieu of to the agency (as an
alternative to concurrent and centralized intake as discussed above)
offers a method whereby effective standard-setting and robust
enforcement could be better ensured.
OPM will not make any revisions based on this comment. For the same
reasons that OPM will not adopt concurrent or centralized complaint
intake, OPM will not accept the recommendation to allow applicants to
submit complaints directly to OPM. Agencies routinely receive and
investigate allegations of wrongdoing against agency employees,
including complex and sensitive matters such as off-duty misconduct,
on-duty drug or alcohol use, and workplace harassment. An alleged
violation of section 9202 of the Fair Chance Act and part 920 is well
within the range of misconduct that agencies can handle in a fair and
impartial manner.
Although we did not receive a comment in regard to Sec.
754.102(a)(3), this rule corrects a cross reference in the regulatory
text. The corrected reference now states ``paragraph (a)(2) of this
section'' instead of ``paragraph (b) of this section''.
In discussing the agency investigation process as outlined in Sec.
754.102(b), an organization discussed that Sec. 754.102 delegates to
the employing agencies the task of ensuring compliance with the Fair
Chance Act by having the agencies receive and investigate complaints
made against them. The organization noted that the rule places a
restriction that the same official cannot be both the executing-
advising officer for the recruitment and the investigator. The
organization stated, ``. . . that is surely part of the minimum that
should be expected of any investigatory process but likely does not go
far enough in ensuring an impartial process.''
OPM disagrees with the organization's assertion that the
investigatory process as outlined in Sec. 754.102(b) is insufficient
to achieve an impartial process. OPM believes there is abundant
precedent, such as appeals of agency classification decisions and
agency programs related to eliminating discriminatory practices and
policies, for agencies to establish internal procedures for receipt and
investigation of employment-related complaints in a fair and impartial
manner. An agency must follow its investigatory procedures and gather
all relevant information about an alleged violation of 5 U.S.C. 9202
and 5 CFR part 920. The investigation will be the foundation for an
assessment of what misconduct, if any, occurred and any individual(s)
responsible. Upon receipt of the agency's administrative report, OPM
will consider the specific facts and circumstances on a case-by-case
basis to determine whether to proceed. OPM believes that with
appropriate OPM guidance and oversight, agencies can effectively
investigate violations of Fair Chance Act requirements.
In further discussion of the agency investigation, an organization
recommended that OPM should allow complainants to make submissions to
OPM that would supplement, correct, or rebut the factual record that
the agency's

[[Page 60322]]

investigative process yielded pursuant to the agency's administrative
report under Sec. 754.102(b)(5). The organization recommended also
that a complainant be allowed to make submissions of facts directly to
OPM either in parallel to the agency's required report or within a
reasonable time after being notified of the report's contents, before
OPM adjudication takes place.
OPM will not make any revisions based on this comment. Part 754
lays out a straightforward administrative process with a framework for
complaint intake and investigation that provides clear parameters and,
where appropriate, agency discretion. Along with the complaint itself,
an applicant may submit any other information the applicant deems
necessary to ensure a complete factual record before OPM's adjudication
takes place. The agency's administrative report to OPM should include
``a complete copy of all information gathered during the
investigation.'' If OPM needs additional information from an applicant
or agency employee for the purpose of adjudicating the complaint, OPM
may make a request to the agency. For these reasons, it is unnecessary
to create a mechanism for applicants to make submissions directly to
OPM.
Some organizations recommended with respect to Sec. 754.102(b)
that OPM ``ensure sufficient time for a complainant to respond to a
hiring agency's request for information.'' These organizations also
urged OPM to put mechanisms in place that ``ensure that agencies do not
use a complainant's failure to quickly respond to a request for
additional information as an excuse for abandoning an investigation.''
The organizations continued that, in some cases, additional information
beyond the initial complaint may not truly be needed from the
complainant, and the investigation should therefore not be suspended
even if the complainant fails to respond.
In response to these comments, and as discussed in greater detail
below, we have added regulatory text to provide an objective timeframe
of 10 days for applicants to respond to a request for additional
information, yet we also indicate that the agency may extend this
timeframe if the agency deems that extenuating circumstances warrant
extension. Further, OPM would discourage agencies from using a
complainant's failure to respond or failure to ``quickly respond'' to a
request for additional information as the sole reason for abandoning an
investigation. Instead, agency investigators should determine whether
they can otherwise develop a record that allows a reasonable fact
finder to draw conclusions as to whether non-compliance with section
9202 and part 920 occurred.
Furthermore, the organizations stated that the regulations must
require hiring agencies to provide complainants with a reasonable
amount of time to respond to any such requests for information. The
commenters asserted that it is not a complainant's job to follow up on
the complaint, and in fact, complainants will likely have been denied a
job opportunity by the agency and may be employed elsewhere, still in
search of employment while the investigation proceeds, or living under
stresses related to unemployment, which could impact their ability to
respond quickly. One of the organizations, speaking on behalf of itself
and several collaborating organizations, opined that OPM's rule
appropriately includes a time limit for an agency to complete its
investigation so that investigations do not drag on indefinitely.
For these reasons, the organizations recommended that complainants
receive 30 days to respond to such requests. They further suggested
that OPM may wish to also provide in the regulations that an agency may
receive additional time to complete the investigation beyond the 60-day
investigative period if the complainant takes unusually long to
respond.
OPM agrees with this recommendation to specify a reasonable amount
of time for an applicant to respond to any such request for information
during the investigation, which is consistent with OPM's establishment
of a time limit for the investigation. Under ordinary circumstances,
OPM believes a period of 10 calendar days from the date of the request
is reasonable and balances the need for timely conclusion of the
investigation. This brief but sufficient response period of 10 calendar
days does not require additional time beyond the 60-day investigative
period. However, as stated above, the agency may extend the applicant's
response period for extenuating circumstances. In addition, an agency
may extend the investigation period if the agency provides more than 10
calendar days for the applicant to respond to an agency's request for
information.
An organization expressed concern that Sec. 754.102(b)(2)
delegates to agencies the discretion to determine the appropriate fact-
finding methods for investigating the complaint, ``subject only to the
oversight and future issuances described respectively in proposed
sections 754.102(d)(1) and (d)(3)'' and recommended that OPM consider
if more rigorous standards are needed.
OPM will not make any changes based on this comment. To reiterate,
OPM believes there is abundant precedent, such as appeals of agency
classification decisions and agency programs related to eliminating
discriminatory practices and policies, for agencies to establish
internal procedures for investigation of employment-related complaints
in a fair and impartial manner. OPM believes that with appropriate OPM
guidance and oversight, agencies can effectively investigate violations
of Fair Chance Act requirements.
In further response to comments that expressed support for
additional clarity for hiring agencies and a final rule that is
effective and efficient, Sec. 754.102(b)(5) will also permit the
agency to send its administrative report to OPM via electronic mail at
<a href="/cdn-cgi/l/email-protection#492c24392526302c2c282a2a263c273d282b2025203d3009263924672e263f">[email&#160;protected]</a> as an alternative to postal delivery as
proposed.
Regarding Sec. 754.102(c), some organizations recommended that OPM
require that the hiring agency and/or OPM inform the complainant of the
results of an investigation and the ultimate findings. One of the
organizations, speaking on behalf of itself and several collaborating
organizations, noted that in Sec. 754.102(c)(2), ``the subject of the
complaint'' appears to refer to the agency employee who allegedly
inquired about an applicant's criminal history record before a
conditional offer. The organizations asserted that the regulations are
silent on when, how, and by whom the complainant will be notified of
the result of OPM's adjudication, and a complainant is another
interested party who should be timely informed of the outcome. The
organizations urged OPM to supplement Sec. 754.102(c)(2) to specify
that OPM will simultaneously notify the complainant in writing of its
findings and decision.
OPM will not revise Sec. 754.102(c) based on this comment. It is
correct that the subject of the complaint is the agency employee who
allegedly violated section 9202 of the Fair Chance Act and part 920 of
this regulation. OPM plans to issue guidance to assist with
implementation of this rule. An agency may only share information from
the records concerning an individual's Fair Chance Act complaint
pursuant to the Privacy Act and the applicable system of records
notice, for example, with those who have a need to know, such as human
resources staff involved in advising management and any management
official responsible for

[[Page 60323]]

approving the action, or others to whom disclosure is permitted
pursuant to a routine use. As an interested party, an applicant has the
option of submitting a Freedom of Information Act request to obtain any
releasable information about the investigation and outcome.
OPM is revising the wording of Sec. 754.102(c) to clarify that OPM
will notify the agency and the subject(s) of the complaint regarding
OPM's assessment that a violation may have occurred such that OPM is
initiating the subpart B adverse action proceedings.

Section 754.103 Applicant Representatives

This section describes the requirements for an applicant's
representative.
An agency asked if it is OPM's intent that an applicant under the
definition be considered part of the bargaining unit if the position is
a covered position. It is not OPM's intent that an applicant, who is
not already employed by the agency in a bargaining unit position, as
defined in newly created part 920, be considered part of the bargaining
unit solely because the position for which the individual applied is
covered by a collective bargaining agreement. OPM believes it is
appropriate and fair for an applicant to receive assistance throughout
the complaint process, subject to the restrictions outlined in Sec.
754.103.

Subpart B--Adverse Actions

OPM adds subpart B, Adverse Actions, which describes the adverse
actions and appeals process related to violations of the Fair Chance
Act. This new subpart also describes the specific penalties to be
imposed by OPM for each violation of 5 U.S.C. 9202. These provisions
are significant because under the Fair Chance Act, the procedures of
chapter 75 of title 5, United States Code, Adverse Actions, are not
applicable and appeal or judicial review is not applicable except as
provided under procedures established by the Director of OPM.

Section 754.201 Coverage

This section describes which actions and employees are covered by
the new adverse action procedures established by OPM pursuant to the
Fair Chance Act and defines key terms used in the subpart.
OPM received no comments on this section.

Section 754.202 Penalty Determination

This section describes the specific penalties OPM may direct an
agency to process when an agency employee has been found to have
violated section 9202 of the Fair Chance Act. The Fair Chance Act
specifies certain penalties for violations of the statute, which are
written warnings, suspensions without pay, and civil penalties of
various amounts depending on the violation. Notably the range of
penalties under the Fair Chance Act includes some forms of penalty that
are not enumerated under the ``adverse actions'' provisions found in
chapter 75 of title 5, United States Code (written warnings, civil
penalties). For certain violations, under the Fair Chance Act OPM can
direct the employing agency to collect a civil penalty and remit it to
the Treasury, for deposit in the Treasury. OPM invited public comment
on the method for collecting and remitting civil penalties. However, we
did not receive any such comments.
A commenter asserted that current case law shows that the proposed
penalty determinations are inconsistent with penalties upheld for
violating Federal regulations. This commenter opined that, while these
recommendations include increasing days of suspensions and adding civil
penalties for the fourth and greater offenses, they are still setting
precedent that a Federal employee could violate Federal regulations
more than five times and still maintain their Federal employment. The
commenter suggested adjusting penalty determinations to include
proposed removal for multiple violations of the Fair Chance Act,
decrease the number of potential violations that have penalty
determinations, and add an aggravating factor of intent to violate
government regulations as a reason to increase the penalty on an
earlier offense. The commenter requested, to the degree that OPM can
influence the penalties required, that discretion be afforded to the
agencies so they can weigh relevant factors.
OPM will not make any revisions based on this comment. Congress,
through the Fair Chance Act, prescribed the range of penalties OPM may
direct an agency to process when an agency employee has been found to
have violated section 9202 of the Fair Chance Act and part 920 of this
regulation. Therefore, OPM will not add removal to the penalty range,
decrease the number of violations prescribed as a threshold for a
certain penalty, or add an aggravating factor of intent to the
regulation. Note that OPM is the proposing and deciding authority for
penalties imposed for section 9202 violations. Accordingly, OPM, not
the employing agency, is responsible for evaluating the facts and
circumstances in each case. Also, the penalty scheme developed by
Congress in the Fair Chance Act is unique to violations of section 9202
of the Act.
An agency shared observations that written warnings are maintained
in a local file and removed after a certain period, and reprimands are
maintained in an employee's Official Personnel Folder (OPF) temporarily
and removed after a certain period. The agency asked if it is OPM's
intent to have ``reprimands'' for violations of section 9202 maintained
on the permanent side of an employee's OPF.
OPM will not make any revisions based on this comment. OPM notes
that Congress elected not to include a reprimand in its prescribed
range of penalties for a violation of section 9202 of the Act, and we
will not add a reprimand as a penalty option. To clarify, section 9204
of the Act defines a written warning as an adverse action for the
purpose of addressing a first violation of section 9202. Further, the
Act specifies that after OPM provides procedural rights, if we
determine that an employee has committed a first violation of section
9202, OPM shall issue a written warning that includes a description of
the violation and the additional penalties that may apply for
subsequent violations, and direct the employee's agency to file such
warning in the employee's official personnel record. Thus, a written
warning issued under Sec. 754.202 is an adverse action and is subject
to the same procedures as other adverse actions, including permanent
retention in the employee's OPF.
OPM is revising its proposed regulatory text for Sec. 754.202(a)
to parallel the language in paragraph (b), making clear that the
process for a penalty determination for the first violation and
subsequent violations is the same and that OPM's determination of
violation and imposition of a penalty occurs only after the employee
has been provided the procedural rights in Sec. 754.203.

Section 754.203 Procedures

The final rule establishes the procedures to be utilized for
actions taken under this subpart.
OPM received no comments on this section.

Section 754.204 Appeal Rights

This section describes the appeal rights for those actions taken by
OPM under Sec. 754.203. Appeal rights are conferred for suspensions of
more than 14 days or any decision to impose a civil penalty under this
subpart.

[[Page 60324]]

OPM received no comments on this section.

Section 754.205 Agency Records

This section outlines the records that OPM and the covered agency
must maintain and their obligations under the Privacy Act.
An organization asserted that the proposed rule provides no
guidance about how the investigatory process should handle private or
sensitive information that may be disclosed, intentionally or
inadvertently, in the course of the fact-gathering and reporting
process. The organization recommended that OPM consider analyzing and
potentially issuing guidelines or revised rules that would require that
the processes to implement the Fair Chance Act requirements are
consistent with the intent of the statute and other applicable Federal
law concerning privacy and sensitivity of personal information
including but not limited to criminal conviction-related history. The
commenter also suggested that agencies and OPM take into account local,
Tribal, and State privacy and fair chance-type laws when carrying out
their investigatory and oversight responsibilities under this rule.
We disagree with the organization's assertion that the rule
provides no guidance about the handling of private or sensitive
information that may be disclosed, intentionally or inadvertently, in
the course of the investigatory process. In the Supplemental
Information section of the proposed rule, OPM addressed handling of
private or sensitive information by stating that OPM and agencies have
obligations under the Privacy Act. Private or sensitive information
disclosed during the investigation will be added to the agency's
administrative file and is covered by Federal law in accordance with
the Privacy Act requirements of this section. Indeed, the regulatory
text for Sec. 754.205 states, ``The complaint, the applicant's
supporting material, the agency's administrative file, the notice of
the proposed action, the employee's written reply, if any, any summary
or transcript of the employee's oral reply, if any, the notice of
decision, and any order to the covered agency effecting the action
together with any supporting material, must be maintained in an
appropriate system of records under the Privacy Act.''
Regarding the organization's recommendation that agencies and OPM
consider local, Tribal, and State privacy and fair chance-type laws,
OPM will not make any revisions to this rule. As noted above, the
records received through the Fair Chance complaint investigation
process are subject to the requirements of the Privacy Act. Federal
agencies have well-established Privacy Act programs. Under the Privacy
Act and other Federal laws, records are protected from unauthorized
access and misuse through various administrative, technical, and
physical security measures. OPM's regulations and guidance implement
applicable Federal statutes for Federal personnel management. Congress
has not authorized coverage under any other type of law for the Fair
Chance Act implementation.

Part 920--Timing of Criminal History Inquiries

OPM is regulating the provisions of the Fair Chance Act in 5 CFR
part 920 because these provisions apply to positions in the excepted,
Senior Executive, and competitive services. For the convenience of the
reader, we are placing them in one location rather than repeat the
provisions in parts 302, 317, 319, and 330, respectively. Additionally,
some agencies may have positions that are exempt from part 302 but not
exempt from the provisions of the Fair Chance Act.

Subpart A--General Provisions

Subpart A of part 920 contains general provisions that are
applicable to the timing of criminal history inquiries. This subpart
explains which positions are covered by this part and which positions
may be excluded. This subpart also provides definitions for the purpose
of this part.

Section 920.101 Definitions

This section contains definitions necessary for the administration
of this part.
Several organizations commented that OPM's proposed definition of
``conditional offer''--defined as ``an offer of employment in the civil
service that is conditioned upon the results of a criminal history
inquiry''--does not provide that a conditional offer can be revoked for
reasons other than a criminal history inquiry, and that therefore OPM
should clarify that the criminal history inquiry should be isolated
from other necessary background screening. OPM agrees that the proposed
definition of ``conditional offer'' is too narrow, and is revising the
definition in Sec. 920.101 in this final rule to read as follows:
``conditional offer means an offer of employment to a position in the
civil service that is conditioned upon the results of a background
investigation, including, as relevant here, the results of a criminal
history inquiry.''
These organizations also encouraged OPM to clarify in its
regulations that a hiring agency must extend a conditional offer in
writing before inquiring about criminal history record information. OPM
declines to make changes in response to this comment. OPM believes that
agencies already extend all conditional offers in writing and that such
clarification is unnecessary. OPM will, however, consider whether to
address this point in subsequent guidance.
OPM received a comment from one agency recommending that OPM add
language to the definition of ``applicant'' in 920.101(a) that
explicitly includes or excludes current Federal employees. OPM is not
adopting this suggestion. An ``applicant'' is defined as a person who
has applied to an agency under its procedures for accepting
applications. OPM notes that an applicant may, at times, be a Federal
employee. The definition of ``applicant'' in the rule encompasses any
person who has applied to an agency under its procedures for accepting
applications; therefore, further clarification is not necessary.

Section 920.102 Positions Covered by Fair Chance Act Regulations

Section 920.102 explains which positions are covered by this part
and which positions may be excluded.
Several organizations asked for OPM to remove the open-ended
possibility for case-by-case exceptions, arguing that the statute
requires OPM to list within the regulation the additional positions to
which the exception may apply. Therefore, they argued that the proposal
to grant case-by-case exceptions is contrary to the statute. OPM is
adopting this recommendation in this final rule. The final rule deletes
the language in Sec. 920.201(b)(3) from the notice of proposed
rulemaking that indicated that OPM will continue to consider case-by-
case exceptions for exempting positions from the Fair Chance Act
criminal history inquiry requirements. Previously, agencies were
permitted to make requests for exceptions to the timing of collection
of criminal history information based upon a job-related need, and with
appropriate supporting information, including, for example, for
positions in which criminal history information is required to
determine whether the applicant is eligible for further consideration
for the position. OPM granted these requests, which will remain in
effect.
During the public comment period, one agency asked OPM to consider
positions that have contact with minors to be an exception to the
proposed rule.

[[Page 60325]]

Another agency recommended that OPM exempt (1) Testing Designated
Positions and positions requiring Certification Licensure or
Registration from the Act based on the sensitive nature of duties for
covered positions; and (2) positions that provide direct care to
elderly and to individuals with physical, mental, and intellectual
disabilities which impair their ability to manage their personal
affairs. The comments do not provide sufficient information for OPM to
determine that all such positions--above and beyond those that are
already exempted by statute--should be exempted from the Fair Chance
Act's requirement to delay criminal history information, and, at this
time, OPM is not exempting any additional positions in this regulation.
To the extent agencies believe that additional positions should be
exempt from such requirements, agencies should alert OPM, which will
carefully consider any input for the purpose of future rulemaking or
guidance.
Several organizations also asked that OPM provide clarity to
agencies regarding their legal responsibility to conduct individualized
assessments and otherwise fairly consider applicants with criminal
history records even after a conditional offer and in accordance with
Title VII and EEOC requirements. OPM notes that these rules only
pertain to the timing of inquiries into an applicant's criminal
history, not to the substantive selection process for Federal
employment. OPM does not believe it is necessary to modify the
regulation in response to these comments, but OPM does note that
agencies have an independent obligation to comply with Title VII and
that nothing in this rule shall be read in derogation of any
individual's rights under Title VII.
A commenter asked how this regulation relates to the Bond Amendment
when hiring for sensitive positions. As is addressed in Sec.
920.201(b), the prohibition for requesting criminal history information
before a conditional job offer does not apply for positions that
require a determination of eligibility for access to classified
information or which have been designated as a sensitive position under
the Position Designation System issued by OPM and the Office of the
Director of National Intelligence. Therefore, these changes have no
effect on the requirements of the Bond Amendment.

Subpart B--Timing of Inquiries Regarding Criminal History

Subpart B addresses when inquiries into an applicant's criminal
history may be made.

Section 920.201 Limitations on Criminal History Inquiries

Section 920.201 describes the agency personnel who are covered by
the prohibition of criminal history inquiries at certain points in the
recruitment and hiring process, as well as the restrictions on when
criminal history inquiries may be made and the exceptions for this
limitation. This section also establishes notification requirements of
the prohibition to applicants.
Several organizations asked that additional instructions be
provided to hiring agencies about what actions must be delayed until
after a conditional offer and how staff should respond if criminal
history information is disclosed before a conditional offer. These
organizations also commented that agencies should be directed, within
the regulation, to not consider criminal history information that may
be inadvertently disclosed earlier in the process or gained through
informal attempts, such as through internet searches. OPM believes that
part 920 clearly and with significant detail outlines the applicability
of the limitations in terms of the means through which agencies may
obtain information of this nature and the timing of which they may
employ such means. Furthermore, this section requires agencies to
publicize this prohibition, when applicable, within the job
announcement, giving applicants the opportunity to know that the
information is not to be requested ahead of the job offer. Therefore,
OPM will not make any changes in this regulation based on these
comments; OPM will, however, provide further instructions to agencies
on these points in supplemental guidance.

Section 920.202 Violations

This section defines what constitutes a violation of the Fair
Chance Act and the prohibition in section 920.201.
In the above sections, OPM has addressed the comments received
related to section 920.202.

Expected Impact of This Final Rule

A. Statement of Need

OPM is issuing this final rule to implement the provisions of the
Fair Chance Act found in chapter 92 of title 5, United States Code.
This statute prohibits Federal agencies and Federal contractors acting
on their behalf from requesting that applicants for employment disclose
criminal history record information before the agency makes a
conditional offer of employment to that employee. The Fair Chance Act
identifies some positions to which the prohibition shall not apply and
requires OPM to issue regulations identifying additional positions to
which the prohibition shall not apply. It also requires OPM to
establish 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 with the Fair Chance
Act, and adverse action and appeal procedures when it has been
determined that a Federal employee has violated the Fair Chance Act.
OPM is implementing these statutory requirements in the least
burdensome way it can while still effectuating the Fair Chance Act.

B. Impact

The final rule allows job applicants to present their
qualifications and abilities for assessment and be considered based on
their merits without the specter of a criminal history record during
the selection process. Various studies show that offenders who maintain
steady employment are less likely to become involved in criminal
behavior after release from prison.\1\ Although several factors may
impact recidivism (such as family ties, and mental and physical
health), it is widely held that stable employment supports relationship
and financial goals that decrease the likelihood of re-offending.\2\ As
the nation's largest employer and a model employer, through this rule
the Federal government will demonstrate an example of fair hiring
practices by removing unnecessary barriers for people with records who
desire to join the Federal workforce. Given that people with criminal
history records are statistically less likely to quit,\3\ Federal
employers stand to save in turnover costs. For example, in a 2021
study, the Society for Human Resources Management found that 73% of
business leaders and human resources professionals said workers with
criminal records were just as or more dependable than workers without
criminal records.\4\ Not only does employment of formerly incarcerated

[[Page 60326]]

individuals affect rates of recidivism, it benefits communities and
society by reducing criminal justice costs, crime victimization costs,
and the costs of incarceration to the reoffenders and their
families.\5\
---------------------------------------------------------------------------

\1\ Berg. & Huebner, ``Reentry and the Ties that Bind: An
Examination of Social Ties, Employment, and Recidivism'' (April 28,
2011).
\2\ Link, Ward, & Stansfield, ``Consequences of Mental and
Physical Health for Reentry and Recidivism: Toward a Health-based
Model of Desistance'' (March 27, 2019).
\3\ Lee-Johnson, ``Give Job Applicants with Criminal Records a
Fair Chance'' (September 21, 2020), and Society for Human Resources
Management, ``2021 Getting Talent Back to Work Report'' (May 2021).
\4\ Society for Human Resources Management, ``2021 Getting
Talent Back to Work Report'' (May 2021).
\5\ U.S. Department of Labor, ``Reducing Recidivism and
Increasing Opportunity'' (June 2018).
---------------------------------------------------------------------------

OPM believes there is significant value in being able to
demonstrate the effect of these final regulations on both Federal
agencies and formerly incarcerated individuals. As noted earlier,
however, OPM currently does not have and is not aware of any data to
show what impact, if any, OPM's existing ``Ban the Box'' rules have had
on agency hiring processes. Therefore, OPM invited comments regarding
any hiring data agencies may have that demonstrate the effect of either
OPM's prior regulations or the potential impact of these proposed
rules. This included ways that the proposed rules may impact the size
of applicant pools for positions not previously covered by OPM's
regulation, including positions in the excepted service as well as
positions in the U.S. Postal Service and the Postal Regulatory
Commission.
Several organizations commented with recommendations for the data
that OPM should collect. Those recommendations include the following:

<bullet> Number of applicants provided a conditional offer (and number
of those with a conviction record)
<bullet> Number of applicants with a conviction record whose
conditional offers were rescinded by the hiring agency
<bullet> The convictions (offense and years elapsed) based upon which
conditional offers were rescinded
<bullet> Number of applicants with a conviction record who were hired
and the positions into which they were hired
<bullet> Demographic information for all of these categories

OPM appreciates these public comments and will take these
recommendations into account as it formulates a data strategy including
in consultation with other agency partners.

C. Regulatory Alternatives

OPM's implementing regulations are required by statute and cannot
be avoided. In the final regulations for part 754, OPM fleshes out
procedures for receiving and investigating complaints, or any other
information, as well as procedural and appeal rights for an agency
employee alleged to have violated section 9202. The statute establishes
the agencies and employees covered by 5 CFR 754, available penalties
that can be imposed for an employee found to have violated section
9202, and the 30-day timeframe for appealing an adverse action.
First, OPM considered the option of receiving complaints, and any
other information, directly from applicants and conducting its own
outreach and investigative fact-finding, as appropriate to the nature
of the applicant's submission. But agencies have already established
internal procedures for receipt and investigation of employment-related
complaints against the agency and to accomplish these tasks in a fair
and impartial manner. Therefore, we have laid out an approach that we
believe is minimally burdensome for agencies and straightforward for
applicants. Subject to OPM guidelines and oversight, the final rule
assigns to each agency covered by the Fair Chance Act regulations the
responsibility to receive complaints, or any other information, and any
applicable supporting material. Further, this final rule delegates to
each agency OPM's responsibility to conduct an investigation of the
complaint, or any other information, regarding compliance with 5 U.S.C.
9202. OPM believes that establishing a process that is similar to other
successful and effective processes will facilitate implementation of
the Fair Chance Act complaint process in covered agencies as agencies
are already familiar with these similar processes. While the final rule
provides parameters to guide agencies and facilitate governmentwide
consistency, the assignment and delegation to agencies reduces the need
for what would be more extensive regulations if OPM were directly
receiving and investigating complaints, and other information, related
to an alleged violation of section 9202.
Regarding the procedures for adverse actions, the statute requires
notice and an opportunity for a hearing on the record by OPM for any
employee alleged to have committed a violation of section 9202. Section
9205 further notes that the procedures of chapter 75 of title 5, United
States Code, are not applicable and that appeal or judicial review are
not applicable except as provided under procedures established by the
Director of OPM. Because chapter 75 procedures are not available, the
final rule establishes an alternative to implement the unique
procedural and appeal elements of the Fair Chance Act. In developing
the procedures, OPM considered the benefits of adapting the adverse
action procedures found at 5 CFR part 752 rather than another approach.
Adapting the part 752 procedures affords agencies the benefit of
familiarity, facilitates ease of transfer in knowledge and skills to
the new regulations, and reduces the need for more extensive or complex
regulations.

D. Costs

OPM did not receive any comments on the estimated costs in the
proposed rule. The economic assessment is finalized with no changes.
Costs Related to Parts 302, 317, 319, 330, 731, and 920--Restrictions
on Preemployment Criminal History Inquiries Prior to Conditional Offer
This rule will affect the operations of over 80 Federal agencies
ranging from cabinet-level departments to small independent agencies.
This rule expands the prohibition on making inquiries into an
applicant's criminal background prior to a conditional offer of
employment. The prohibition currently applies to positions in the
competitive service. This final rule will expand this prohibition to
include agencies with positions in the excepted service and the Senior
Executive Service. There are approximately 20 agencies in the Executive
Branch that are fully in the excepted service that will be impacted by
this final rule. We estimate that this rule will require individuals
employed by these agencies to develop policies and procedures to
implement the rule when making appointments. For the purpose of this
cost analysis, with regard to parts 302, 317, 319, 330, 731, and 920,
the assumed average salary rate of Federal employees performing this
work will be the rate in 2022 for GS-14, step 5, from the Washington,
DC, locality pay table ($143,064 annual locality rate and $68.55 hourly
locality rate). We assume that the total dollar value of labor, which
includes wages, benefits, and overhead, is equal to 200 percent of the
wage rate, resulting in an assumed labor cost of $137.10 per hour.
In order to comply with the regulatory changes in this final rule,
affected agencies will need to review the rule and update their
policies and procedures. We estimate that, in the first year following
publication of the final rule, this will require an average of 250
hours of work by employees with an average hourly cost of $137.10. This
would result in estimated costs in that first year of implementation of
about $34,275 per agency, and about $2,742,000 in total governmentwide.
We do not believe this rule will substantially increase the ongoing
administrative costs to agencies (including the administrative costs of
administering the program and hiring

[[Page 60327]]

and training new staff) as this rule sets out leveraging existing
procedures.
Costs Related to Part 754--Complaint Procedures, Adverse Actions, and
Appeals for Criminal History Inquiries Prior to Conditional Offer
Regarding the implementation of the regulatory requirements in part
754, in the event of a complaint by an applicant, agencies will incur
labor costs associated with the investigation into the complaint. OPM
will incur labor costs associated with reviewing the results of the
investigation and reaching a determination, which could include issuing
a notice of proposed action to the subject of the complaint,
considering any response, and making a final determination. In the
event OPM directs the employing agency to take an action as a result of
a founded complaint, OPM would incur labor costs in responding to and/
or defending any appeal by the subject of the complaint to the Merit
Systems Protection Board (MSPB).
In order to estimate the costs to implement the final regulatory
requirements in part 754 for complaint procedures, adverse actions, and
appeals, OPM made certain assumptions and considered that some costs
may vary depending on agency size and the extent to which an agency is
able to leverage existing policies, practices, and procedures. For this
cost analysis, the assumed staffing for Federal employees performing
the work required by the regulations in part 754 is one executive; one
GS-14, step 5; a GS-15, step 5; and one GS-7, step 5 in the Washington,
DC, locality area. The 2022 basic rate of pay for an executive at an
agency with a certified SES performance appraisal system ranges from
$135,468 to $203,700 annually, for an average of $169,584 per year or
$81.26 per hour. For General Schedule employees in the Washington, DC,
locality area, the 2022 pay table rates are $168,282 annually and
$80.63 hourly for GS-15, step 5; $143,064 annually and $68.55 for GS-
14, step 5, and $57,393 annually and $27.50 hourly for GS-7, step 5. We
assume that the total dollar value of labor, which includes wages,
benefits, and overhead, is equal to 200 percent of the wage rate,
resulting in assumed hourly labor costs of $162.51 for an executive;
$161.27 for a GS-15, step 5; $137.10 for a GS-14, step 5; and $55 for a
GS-7, step 5.
As to overall complaint procedures, program implementation and
oversight, OPM assumes it will incur certain upfront costs and then
ongoing costs. For example, the establishment of new processing codes
requires one-time updates to OPM's databases and personnel action
processing handbook. After the issuance of any final rule effecting
part 754, OPM may develop additional materials related to its
implementation. This includes, but is not limited to, procedures and
guidance related to agency obligations to report to OPM actions taken
to investigate any complaints filed by an applicant regarding an
agency's compliance with 5 U.S.C. 9202 and adverse actions taken at the
direction of OPM for non-compliance with 5 U.S.C. 9202. OPM estimates
that the cost for its implementation and oversight in the first year
will be $30,370.00 and $3,687.04 on average in subsequent years.
OPM estimates that it will cost each agency $21,319.04 in the first
year to establish an internal policy for handling alleged violations of
5 U.S.C. 9202. We assume that larger agencies advertise more vacancies
and are therefore likely to receive a greater number of complaints. We
estimate the annual cost of complaint intake and investigation for
large agencies to be $172,746.00 (based on an average of 30 complaints
per large agency); medium size agencies $115,164.00 (for 20
complaints); and small size agencies $57,582.00 (for 10 complaints).
The total estimated cost for agencies to receive and investigate
complaints is $345,492.00 annually, which averages to $5,758.20 per
complaint.
For agency outreach regarding any other information that may
potentially be an attempt to file a complaint for an alleged violation
of 5 U.S.C. 9202, OPM again assumes that larger agencies advertise more
vacancies and are therefore likely to experience a greater number of
such instances. We estimate that large agencies on average may conduct
30 instances of outreach and incur $8,226.00 for the total number of
instances. Medium size agencies may conduct outreach for 20 instances
and incur $5,484.00 total. Small agencies may conduct outreach for 10
instances and incur $2,742.00 total. The total estimated annual cost of
agency outreach is $16,452.00 and the average cost of agency outreach
is $274.20 per instance.
Following agency intake, outreach (if applicable), and
investigation, OPM is responsible for administering the adverse action
procedures as outlined in Sec. 754.203. Based on the estimate for the
annual number of complaints that Federal agencies may receive (60 for
large, medium, and small agencies combined), OPM estimates that 25%, or
15, of the complaints may result in a finding of a violation of 5
U.S.C. 9202. While OPM will carefully review and consider each
investigative file submitted by agencies, OPM expects that only those
investigations that result in a finding of a violation will generate a
meaningful increase in cost above staff's usual duties and
responsibilities. Assuming 15 such cases, the total cost for OPM's
administration of the adverse action procedures, including proposing an
action, considering any reply, and issuing a decision, is estimated to
be $159,818.40. The average cost for OPM per adverse action is
$10,654.56.
Under this final regulation, agencies are responsible for
processing any adverse action imposed by OPM. Agencies routinely
process suspensions for other forms of misconduct. Thus, applying those
same procedures to adverse actions imposed for violations of 5 U.S.C.
9202 will be a negligible cost for agencies as they will be leveraging
existing processes and procedures. However, OPM does anticipate some
cost for the one-time update to agency processing systems for the new
codes established by OPM to identify that the adverse actions are taken
under 5 U.S.C. 9202, as well as the establishment of agency procedures
for the collection of civil penalties. OPM estimates the costs to
agencies in the first year for updating their systems and procedures
and processing actions to be $24,690.04. Thereafter, we estimate that
the average cost for an agency to process an adverse action, including
any civil penalty, is $960.50 per action.
The available penalties for violations of 5 U.S.C. 9202 include
written warnings and short suspensions (14 days or less) that are not
grievable or appealable. Further, an employee's first two violations of
section 9202 will result in a penalty no stronger than a seven-day
suspension. For only a third or subsequent violation would OPM impose a
penalty that may be appealable to the MSPB. While such an appeal to the
MSPB is possible, we believe that it will be rare that an employee
violates section 9202 three or more times. OPM anticipates that if 15
adverse actions are imposed per year, OPM anticipates that only one on
average will be appealable to the MSPB. We therefore do not believe
there will be a measurable impact on MSPB operations and thus, we have
not estimated costs for the MSPB.
Because any appeal filed is against OPM and not the employing
agency, OPM will be responsible for defending the action. OPM estimates
$11,447.84 to defend an appeal.
The remaining requirements of part 754 for complaint procedures,
adverse actions, and appeals will require

[[Page 60328]]

minimal costs for OPM or agencies, or only negligible costs. With
respect to informing applicants of the agency's complaint procedures
via the agency's public website and in vacancy announcements, the
additional cost to agencies will be small. Agencies already provide
notice on their public websites and in vacancy announcements about how
an applicant can file an EEO complaint. Also, agencies provide
information to the public on their external websites about how to file
an Inspector General complaint. Thus, an additional notice does not
present a significant additional cost. In conclusion, OPM estimates a
cost of $598,141.47 to implement the complaint procedures under the
final Fair Chance Act regulations in the first year and the recurring
cost per year to be $32,782.34.
Indirect Costs
We note that the final rule may have indirect costs on other
entities. Section 1122(d) of the Fair Chance Act amends section
207(d)(2) of the Congressional Accountability Act of 1995 to require
the Board of Directors of the Office of Congressional Workplace Rights
to promulgate regulations that are ``the same'' as OPM's ``except to
the extent that the Board may determine, for good cause shown and
stated together with the regulation, that a modification of such
regulations would be more effective for the implementation of the
rights and protections under this section.'' Section 1122(e) of the
Fair Chance Act similarly amends 28 U.S.C. 604(e)(5)(B) to require the
Director of the Administrative Office of the U.S. Courts to promulgate
regulations that are ``the same'' as OPM's ``except to the extent that
the Director . . . may determine, for good cause shown and stated
together with the regulation, that a modification of such regulations
would be more effective for the implementation of the rights and
protections under this subsection.'' Finally, section 1123(c) of the
Fair Chance Act requires the Federal Acquisition Regulation (FAR)
Council to amend the FAR ``to be consistent with'' OPM's regulations
``to the maximum extent practicable'' and to ``include together with
such revision an explanation of any substantive modification of the
Office of Personnel Management regulations, including an explanation of
how such modification will more effectively implement the rights and
protections under this section.'' Such indirect costs are not
quantifiable since sections 1122(d)-(e) and 1123(c) of the Fair Chance
Act give the other entities significant leeway to adopt, reject, or
modify OPM's regulations with respect to the populations covered by
those sections.

E. Benefits

This final regulation provides the opportunity for a qualified
applicant with a criminal history record to advance in the hiring
process just as a qualified applicant without a criminal history record
would advance. The regulation benefit not only the Federal government
as an employer but also American society as a whole at the family and
community levels in terms of a strengthened economy.
This final regulation will support the Administration's priority to
advance comprehensive equity. The final rule can help Federal agencies
realize the vision of the Federal government as a model employer and to
advance the principles of diversity, equity, inclusion, and
accessibility. Finally, another benefit of this rule is increased
transparency and accountability in the Federal hiring process. The
regulations provide applicants who believe they have been subjected to
a violation of 5 U.S.C. 9202 the right to report the alleged violation
and holds accountable Federal employees found to have committed such a
violation.

F. Request for Comment and Data

In addition to the questions posed in the regulatory analysis and
given the limited information on the Federal Government's
implementation on Ban the Box, OPM requested comment on the
implementation and impacts of Ban the Box efforts in the private
sectors. As noted above, OPM received multiple responses regarding the
data that OPM should collect to inform the impact of this effort. OPM
appreciates the responses received and is formulating a strategy for
future data collections.

G. List of Sources

Berg, Mark T. & Huebner, Beth M. ``Reentry and the Ties that Bind:
An Examination of Social Ties, Employment, and Recidivism.'' Justice
Quarterly, April 28, 2011, 382. <a href="https://doi.org/10.1080/07418825.2010.498383">https://doi.org/10.1080/07418825.2010.498383</a>
Lee-Johnson, Margie. ``Give Job Applicants with Criminal Records a
Fair Chance.'' Harvard Business Review, September 21, 2020. <a href="https://hbr.org/2020/09/give-job-applicants-with-criminal-records-a-fair-chance?autocomplete=true">https://hbr.org/2020/09/give-job-applicants-with-criminal-records-a-fair-chance?autocomplete=true</a>
Link, Nathan W., Ward, Jeffrey T., & Stansfield, Richard.
``Consequences of Mental and Physical Health for Reentry and
Recidivism: Toward a Health-based Model of Desistance.''
Criminology, March 27, 2019, 544. <a href="https://onlinelibrary.wiley.com/doi/epdf/10.1111/1745-9125.12213">https://onlinelibrary.wiley.com/doi/epdf/10.1111/1745-9125.12213</a>
National Employment Law Project. ``FAQ: Fair Chance to Compete for
Jobs Act of 2019,'' December 2019. <a href="https://s27147.pcdn.co/wp-content/uploads/Fact-Sheet-FAQ-Federal-Fair-Chance-Compete-Jobs-Act-2019.pdf">https://s27147.pcdn.co/wp-content/uploads/Fact-Sheet-FAQ-Federal-Fair-Chance-Compete-Jobs-Act-2019.pdf</a>
Society for Human Resources Management. ``2021 Getting Talent Back
to Work Report: A Workplace Survey on Hiring and Working with People
with Criminal Records,'' May 2021. <a href="https://www.gettingtalentbacktowork.org/wp-content/uploads/2021/05/2021-GTBTW_Report.pdf">https://www.gettingtalentbacktowork.org/wp-content/uploads/2021/05/2021-GTBTW_Report.pdf</a>
U.S. Department of Labor. ``Reducing Recidivism and Increasing
Opportunity: Benefits and Costs of the RecycleForce Enhanced
Transitional Jobs Program,'' June 2018. <a href="https://www.mdrc.org/sites/default/files/ETJD_STED_Benefit_Cost_Technical_Supplement_508.pdf">https://www.mdrc.org/sites/default/files/ETJD_STED_Benefit_Cost_Technical_Supplement_508.pdf</a>

Executive Orders 13563 and 12866, Regulatory Review

Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. In accordance with the provisions of Executive Order
12866, this rule was reviewed by the Office of Management and Budget as
significant.

Regulatory Flexibility Act

The OPM Director certifies that this rule will not have a
significant economic impact on a substantial number of small entities
because it applies only to Federal agencies and employees.

E.O. 13132, Federalism

This regulation will not have substantial direct effects on the
States, on the relationship between the National Government and the
States, or on distribution of power and responsibilities among the
various levels of government. Therefore, in accordance with Executive
Order 13132, it is determined that this rule does not have sufficient
federalism implications to warrant preparation of a Federalism
Assessment.

E.O. 12988, Civil Justice Reform

This regulation meets the applicable standard set forth in section
3(a) and (b)(2) of Executive Order 12988.

[[Page 60329]]

Unfunded Mandates Reform Act of 1995

This rule will not result in the expenditure by State, local or
Tribal governments of more than $100 million annually. Thus, no written
assessment of unfunded mandates is required.

Congressional Review Act

Subtitle E of the Small Business Regulatory Enforcement Fairness
Act of 1996 (known as the Congressional Review Act or CRA) (5 U.S.C.
801 et seq.) requires rules to be submitted to Congress before taking
effect. OPM will submit to Congress and the Comptroller General of the
United States a report regarding the issuance of this rule before its
effective date, as required by 5 U.S.C. 801. The Office of Information
and Regulatory Affairs in the Office of Management and Budget has
determined that this rule is not a major rule as defined by the CRA (5
U.S.C. 804).

Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521)

Notwithstanding any other provision of law, no person is required
to respond to, nor shall any person be subject to a penalty for failure
to comply with a collection of information subject to the requirements
of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA),
unless that collection of information displays a currently valid Office
of Management and Budget (OMB) Control Number. This rule makes
reference to an OMB approved collection of information subject to the
PRA titled Declaration for Federal Employment (OF 306), OMB Control
Number 3206-0182. The systems of record notice for this collection is
<a href="https://www.opm.gov/information-management/privacy-policy/sorn/opm-sorn-govt-1-general-personnel-records.pdf">https://www.opm.gov/information-management/privacy-policy/sorn/opm-sorn-govt-1-general-personnel-records.pdf</a>.
OPM requested comments as part of the proposed rule on this
information collection. While no comments were received on the burden
or cost estimate, OPM did receive other comments. In response to
comments regarding the timing of asking applicants about criminal
history, OPM is replacing a sentence in the instructions to add clarity
to the timing within the process when an individual is most likely to
be asked to complete the form (i.e., after a tentative job offer has
been made). Should an individual need to fill out an OF 306, it can be
done in several ways such as through USAStaffing, in response to an
email from the hiring agency, or through other electronic means.

List of Subjects in 5 CFR Part 302, 317, 319, 330, 731, 754, and
920

Administrative practice and procedure, Government employees.

Office of Personnel Management.
Kayyonne Marston,
Federal Register Liaison.

Accordingly, for the reasons stated in the preamble, OPM amends
chapter I of title 5, Code of Federal Regulations, as follows:

PART 302--EMPLOYMENT IN THE EXCEPTED SERVICE

0
1. Revise the authority citation for part 302 to read as follows:

Authority: 5 U.S.C. 1302, 3301, 3302, 3317, 3318, 3319, 3320,
8151, E.O. 10577 (3 CFR 1954-1958 Comp., p. 218); Sec. 302.105 also
issued under 5 U.S.C. 1104, Pub. L. 95-454, sec. 3(5); Sec. 302.501
also issued under 5 U.S.C. 7701 et seq.; Sec. 302.107 also issued
under 5 U.S.C. 9201-9206 and Pub. L. 116-92, sec. 1122(b)(1).

0
2. Add Sec. 302.107 to subpart A to read as follows:

Sec. 302.107 Suitability inquiries regarding criminal history.

Agency inquiries regarding criminal history must be done in
accordance with the requirements under chapter 92 of title 5, U.S. Code
and part 920 of this chapter.

PART 317--EMPLOYMENT IN THE SENIOR EXECUTIVE SERVICE

0
3. Revise the authority citation for part 317 to read as follows:

Authority: 5 U.S.C. 3392, 3393, 3395, 3397, 3592, 3593, 3595,
3596, 8414, AND 8421. Sec. 317.202 also issued under 5 U.S.C. 9201-
9206 and Pub. L. 116-92, sec. 1122(b)(1).

0
4. Add Sec. 317.202 to subpart B to read as follows:

Sec. 317.202 Suitability inquiries regarding criminal history.

Agency inquiries regarding criminal history must be done in
accordance with the requirements under chapter 92 of title 5, U.S. Code
and part 920 of this chapter.

PART 319--EMPLOYMENT IN THE SENIOR-LEVEL AND SCIENTIFIC AND
PROFESSIONAL POSITIONS

0
5. Revise the authority citation for part 319 to read as follows:

Authority: 5 U.S.C. 1104, 3104, 3324, 3325, 5108, AND 5376.
Sec. 319.106 also issued under 5 U.S.C. 9201-9206 and Pub. L. 116-
92, sec. 1122(b)(1).

0
6. Add Sec. 319.106 to subpart A to read as follows:

Sec. 319.106 Suitability inquiries regarding criminal history.

Agency inquiries regarding criminal history must be done in
accordance with the requirements under chapter 92 of title 5, U.S. Code
and part 920 of this chapter.

PART 330--RECRUITMENT, SELECTION, AND PLACEMENT (GENERAL)

0
7. Revise the authority citation for part 330 to read as follows:

Authority: 5 U.S.C. 1104, 1302, 3301, 3302, 3304, and 3330;
E.O. 10577, 3 CFR, 1954-58 Comp., p. 218; Section 330.103 also
issued under 5 U.S.C. 3327; Subpart B also issued under 5 U.S.C.
3315 and 8151; Section 330.401 also issued under 5 U.S.C. 3310;
Subparts F and G also issued under Presidential Memorandum on Career
Transition Assistance for Federal Employees, September 12, 1995;
Subpart G also issued under 5 U.S.C. 8337(h) and 8456(b). Sec.
330.1301 also issued under 5 U.S.C. 9201-9206 and Pub. L. 116-92,
sec. 1122(b)(1).

0
8. Revise subpart M, consisting of Sec. Sec. 330.1300 and 330.1301, to
read as follows:

Subpart M--Timing of Background Investigations

Sec. 330.1300 Timing of suitability inquiries in competitive hiring.

(a) A hiring agency may not make specific inquiries concerning an
applicant's credit background of the sort asked on the OF-306,
Declaration for Federal Employment, or other forms used to conduct
suitability investigations for Federal employment (i.e., inquiries into
an applicant's adverse credit history) unless the hiring agency has
made a conditional offer of employment to the applicant. Agencies may
make inquiries into an applicant's Selective Service registration,
military service, citizenship status, where applicable, or previous
work history, prior to making a conditional offer of employment to an
applicant.
(b) However, in certain situations, agencies may have a business
need to obtain information about the credit background of applicants
earlier in the hiring process to determine if they meet the
qualifications requirements or are suitable for the position being
filled. If so, agencies must request an exception from the Office of
Personnel Management in order to determine an applicant's ability to
meet qualifications or suitability for Federal employment prior to
making a conditional offer of employment to the applicant(s). OPM will
grant exceptions only when the agency demonstrates specific job-related
reasons why the agency needs to

[[Page 60330]]

evaluate an applicant's adverse credit history earlier in the process.
OPM will consider such factors as, but not limited to, the nature of
the position being filled and whether a clean credit history record
would be essential to the ability to perform one of the duties of the
position effectively. OPM may also consider positions for which the
expense of completing the examination makes it appropriate to review an
applicant's credit background at the outset of the process (e.g., a
position that requires that an applicant complete a rigorous training
regimen and pass an examination based upon the training before the
applicant's selection can be finalized). A hiring agency must request
and receive an OPM-approved exception prior to issuing public notice
for a position for which the agency will collect credit background
information prior to completion of the assessment process and the
making of a conditional offer of employment.

Sec. 330.1301 Suitability inquiries regarding criminal history.

Agency inquiries regarding criminal history must be done in
accordance with the requirements under chapter 92 of title 5, U.S. Code
and part 920 of this chapter.

PART 731--SUITABILITY

0
9. Revise the authority citation for part 731 to read as follows:

Authority: 5 U.S.C. 1302, 3301, 7301, 9201-9206; Pub. L. 116-
92, sec. 1122(b)(1); E.O. 10577, 3 CFR, 1954-1958 Comp., p. 218, as
amended; E.O. 13467, 3 CFR, 2009 Comp., p. 198; E.O. 13488, 3 CFR,
2010 Comp., p. 189; 5 CFR, parts 1, 2 and 5; 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, January 31,
2014.

0
11. In Sec. 731.103, revise paragraph (d)(1) to read as follows:

Sec. 731.103 Delegation to agencies.

* * * * *
(d) * * *
(1) A hiring agency may not make specific inquiries concerning an
applicant's criminal or credit background in oral or written form
(including through the OF-306 or other forms used to conduct
suitability investigations for Federal employment, USAJOBS, or any
other electronic means) unless the hiring agency has made a conditional
offer of employment to the applicant. Agencies may request an exception
to the provision for making credit inquiries in advance of a
conditional offer in accordance with the provisions in 5 CFR part 330,
subpart M. For criminal inquiries prior to a conditional offer, this
prohibition does not apply to applicants for positions excepted under 5
CFR 920.201(b). Agencies may make inquiries into an applicant's
Selective Service registration, military service, citizenship status,
where applicable, or previous work history, prior to making a
conditional offer of employment to an applicant.
* * * * *

0
12. Add part 754 as follows:

PART 754--COMPLAINT PROCEDURES, ADVERSE ACTIONS, AND APPEALS FOR
CRIMINAL HISTORY INQUIRIES PRIOR TO CONDITIONAL OFFER

Subpart A--Complaint Procedures
Sec.
754.101 Coverage.
754.102 Agency complaint process.
754.103 Applicant representatives.
Subpart B--Adverse Actions
754.201 Coverage.
754.202 Penalty determination.
754.203 Procedures.
754.204 Appeal rights.
754.205 Agency records.

Authority: 5 U.S.C. 554(a)(2), 1103(a)(5)(A), 1104(a)(2), 9201-
9205, and Pub. L. 116-92, sec. 1122(b)(1).

Subpart A--Complaint Procedures

Sec. 754.101 Coverage.

(a) Actions covered. A complaint, or any other information,
submitted by an applicant for an appointment to a civil service
position relating to compliance with section 9202 of title 5, United
States Code.
(b) Definitions. In this subpart, Agency, applicant, appointing
authority, conditional offer, criminal history record information, and
employee have the meanings set forth in 5 CFR 920.101.

Sec. 754.102 Agency complaint process.

(a) Complaint intake. (1) Within 90 days of the effective date of
this part, each agency must establish and publicize an accessible
program for the agency to receive a complaint, or any other
information, from an applicant, and any applicable supporting material,
relating to the agency's compliance with section 9202 of title 5,
United States Code and part 920 of this chapter, in accordance with the
guidelines and standards established in this section and the issuances
described in paragraph (d)(3) of this section.
(2) An applicant may submit a complaint, or any other information,
to an agency within 30 calendar days of the date of the alleged non-
compliance by an employee of an agency with section 9202 of title 5,
United States Code and part 920 of this chapter.
(3) The agency shall extend the 30-calendar-day time limit in
paragraph (a)(2) of this section when the applicant shows that the
applicant was not notified of the time limits and was not otherwise
aware of them, that the applicant did not know and reasonably should
not have known that the non-compliance with 5 U.S.C. 9202 and part 920
of this chapter occurred, to consider a reasonable accommodation of a
disability, or for other proper and adequate reasons considered by the
agency.
(4) The agency must conduct outreach to inform an applicant of the
procedure for submitting a complaint when it has reasonable cause to
believe that the applicant is attempting to file a complaint.
(b) Agency investigation. (1) Acting under delegated authority from
OPM and subject to the limitations and requirements of paragraph (d) of
this section, the agency employing the employee against whom the
complaint has been filed shall investigate the complaint, unless the
employee is an administrative law judge appointed under 5 U.S.C. 3105.
To carry out this function in an impartial manner, the same agency
official(s) responsible for executing and advising on the recruitment
action may not also be responsible for managing, advising, or
overseeing the agency complaint process established in this section.
(2) In carrying out its delegated responsibilities under paragraph
(b)(1) of this section, the agency shall develop an impartial and
appropriate factual record adequate for OPM to make findings on the
claims raised by any written complaint. An appropriate factual record
is one that allows a reasonable fact finder to draw conclusions as to
whether non-compliance with 5 U.S.C. 9202 and part 920 of this chapter
occurred. Agencies have discretion to determine the appropriate fact-
finding methods that efficiently and thoroughly address the matters at
issue.
(3) The agency must delegate to the investigator sufficient
authority to secure the production, from agency employees and
contractors, of documentary and testimonial evidence needed to
investigate and report on the complaint.
(4) The applicant or applicant's representative must be given a
reasonable time to respond to a request for documentary and testimonial

[[Page 60331]]

evidence. This time period will not exceed 10 calendar days under
ordinary circumstances. However, in the agency's discretion, an agency
may grant an extension under extenuating circumstances.
(5) The agency shall complete its investigation within 60 calendar
days of the date of the filing of the complaint. An agency may extend
the investigation period when the agency has provided more than 10
calendar days for the applicant to respond to a request for documentary
and testimonial evidence pursuant to paragraph (b)(4) of this section.
Notwithstanding an extension, the agency shall complete the
investigation as expeditiously as possible.
(6) Within 30 calendar days of completing its investigation, the
agency shall provide to OPM an administrative report. This report
should include the applicant's complaint, or any other information
submitted by the applicant, the agency's factual findings, a complete
copy of all information gathered during the investigation, and any
other information that the agency believes OPM should consider. The
report should be submitted to the Manager, Employee Accountability,
Accountability and Workforce Relations, Employee Services, Office of
Personnel Management, 1900 E Street NW, Room 7H28, Washington, DC 20415
or <a href="/cdn-cgi/l/email-protection#096c64796566706c6c686a6a667c677d686b6065607d7049667964276e667f">[email&#160;protected]</a>.
(c) OPM adjudication. (1) At OPM's discretion, OPM may request the
agency provide additional information as necessary.
(2) OPM shall notify the agency and the subject(s) of the complaint
in writing of its assessment of the complaint, including any decision
to initiate adverse action proceedings under subpart B of this part.
(d) OPM oversight. (1) OPM may revoke an agency's delegation under
this section if an agency fails to conform to this section or OPM
issuances as described in paragraph (d)(3) of this section.
(2) OPM retains jurisdiction to make final determinations and take
actions regarding the receipt and investigation of complaints, or any
other information; record-keeping; and reporting related to an
allegation of non-compliance with 5 U.S.C. 9202 and part 920 of this
chapter. Paragraphs (a) and (b) of this section notwithstanding, OPM
may, in its discretion, exercise its jurisdiction under this section in
any case it deems necessary.
(3) OPM may set forth policies, procedures, standards, and
supplementary guidance for the implementation of this section in OPM
issuances.

Sec. 754.103 Applicant representatives.

An applicant may select a representative of the applicant's choice
to assist the applicant during the complaint process. An agency may
disallow as an applicant's representative an individual whose
activities as a representative would cause a conflict of interest or
position; an agency employee who cannot be released from official
duties because of the priority needs of the Government; or an agency
employee whose release would give rise to unreasonable costs to the
Government.

Subpart B--Adverse Actions

Sec. 754.201 Coverage.

(a) Actions covered. This subpart applies to actions taken under 5
U.S.C. 9204.
(b) Employees covered. This subpart covers an employee of an agency
as defined and ``employee'' has the meaning given the term in 5 CFR
920.101.
(c) Definitions. In this subpart--
Civil penalty means a monetary penalty imposed on an employee of a
covered agency when it has been determined the employee has violated
the Fair Chance Act.
Day means a calendar day.
Director means the Director of OPM or Director's designee.
Suspension means the placing of an employee of a covered agency in
a temporary status without duties and pay when it has been determined
the employee violated the Fair Chance Act.

Sec. 754.202 Penalty determination.

(a) First violation. If the Director or Director's designee
determines, after OPM provides the procedural rights in Sec. 754.203,
that an employee of an agency has violated 5 U.S.C. 9202 and part 920
of this chapter, the Director or Director's designee shall issue to the
employee a written warning that includes a description of the violation
and the additional penalties that may apply for subsequent violations;
and direct the agency to file such warning in the employee's official
personnel record file.
(b) Subsequent violations. If the Director or Director's designee
determines, after OPM provides the procedural rights in Sec. 754.203,
that an employee of an agency has committed a subsequent violation of 5
U.S.C. 9202 and part 920 of this chapter, the Director or Director's
designee may take the following action:
(1) For a second violation, order a suspension of the employee for
a period of not more than 7 days.
(2) For a third violation, order a suspension of the employee for a
period of more than 7 days.
(3) For a fourth violation--
(i) Order a suspension of the employee for a period of more than 7
days; and
(ii) Order the employee's agency to collect a civil penalty against
the employee in an amount that is not more than $250, and remit the
penalty amount to the U.S. Department of Treasury for deposit in the
Treasury.
(4) For a fifth violation--
(i) Order a suspension of the employee for a period of more than 7
days; and
(ii) Order the employee's agency to collect a civil penalty against
the employee in an amount that is not more than $500, and remit the
penalty amount to the U.S. Department of Treasury for deposit in the
Treasury.
(5) For any subsequent violation--
(i) Order a suspension of the employee for a period of more than 7
days; and
(ii) Order the employee's agency to collect a civil penalty against
the employee in an amount that is not more than $1,000, and remit the
penalty amount to the U.S. Department of Treasury for deposit in the
Treasury.
(c) Duration of suspension and penalty amount. The Director or
Director's Designee has discretion to determine the duration of a
suspension and the amount of a penalty under this section, subject only
to the minimum and maximum durations and amounts specified in this
section.
(d) Agency responsibilities. An agency shall carry out an order of
the Director to suspend an employee, or to collect and remit a civil
penalty, pursuant to processing and recordkeeping instructions issued
by OPM.
(1) The agency shall carry out the order of the Director to suspend
the employee as soon as practicable.
(2) The agency shall carry out the order of the Director to collect
and remit a civil penalty as soon as practicable, unless the employee
timely appeals the action under Sec. 754.204, in which case the agency
shall collect and remit the civil penalty as soon as practicable after
the Merit Systems Protection Board issues a final decision sustaining
the action.
(e) Administrative law judges. Paragraphs (a) through (d) of this
section do not apply if the Director or Director's designee believes
that an administrative law judge has violated 5 U.S.C. 9202 and part
920 of this chapter. In any such

[[Page 60332]]

case the Director or Director's designee shall file a complaint with
the Merit Systems Protection Board proposing an action set forth in 5
U.S.C. 9204 and describing with particularity the facts that support
the proposed agency action, and the Board will determine whether the
action is for good cause under its regulations in 5 CFR part 1201,
subpart D.

Sec. 754.203 Procedures.

(a) Notice of proposed action. An employee against whom action is
proposed under this subpart is entitled to at least 30 days' advance
written notice. The notice must state the specific reason(s) for the
proposed action and inform the employee of the right to review the
material which is relied on to support the reasons for the proposed
action given in the notice before any final decision is made by the
Director or Director's designee.
(b) Employee's answer. (1) An employee may answer orally and in
writing. The employee's agency must give the employee a reasonable
amount of official time to review the material relied on to support
OPM's proposed action, to prepare and present an answer orally and in
writing, and to secure affidavits, if the employee is in an active duty
status. OPM may require the employee to furnish any answer to the
proposed action, and affidavits and other documentary evidence in
support of the employee's answer, within such time as would be
reasonable, but not less than 7 days.
(2) The Director or Director's Designee may designate an Office of
Personnel Management official to hear the employee's oral answer, and
confer authority on that person to make or recommend a final decision
on the proposed adverse action.
(c) Representation. An employee covered by this part is entitled to
be represented by an attorney or other representative. An agency may
disallow as an employee's representative an individual whose activities
as representative would cause a conflict of interest or position, or an
employee of the agency whose release from the employee's official
position would give rise to unreasonable costs or whose priority work
assignments preclude release.
(d) OPM decision. (1) In arriving at a decision, the Director or
Director's Designee will consider only the complaint, the applicant's
supporting material, the agency's administrative file, the reasons
specified in the notice of proposed action, and any oral and written
answer by the employee or the employee's representative.
(2) The decision notice must specify in writing the reasons for the
decision and advise the employee of any appeal rights.
(e) Administrative Law Judges. This section does not apply if the
Director or Director's designee believes that an administrative law
judge has violated 5 U.S.C. 9202 and part 920 of this chapter.

Sec. 754.204 Appeal rights.

(a) An employee against whom an action is taken by OPM under Sec.
754.203 may appeal to the Merit Systems Protection Board, under the
regulations of the Board, but only to the extent the action concerns
suspensions for more than 14 days or combines a suspension and a civil
penalty. An appeal must be filed by not later than 30 days after the
effective date of the action. The procedures for filing an appeal with
the Board are found at 5 CFR part 1201.
(b) If the Board finds that one or more of the charges brought by
OPM against the employee is supported by a preponderance of the
evidence, regardless of whether all specifications are sustained, it
must affirm OPM's action. The Board may neither review whether the
adverse action is for such cause as will promote the efficiency of the
service, nor mitigate the duration of a suspension or the amount of a
civil penalty ordered under this part.
(c) An appeal against OPM is the exclusive avenue of appeal. The
employee has no right to file a separate appeal against the employing
agency for processing a personnel action as ordered by OPM under Sec.
754.202.
(d) OPM's action under Sec. 754.202 of this part is not subject to
an agency's administrative grievance procedure or a negotiated
grievance procedure under a collective bargaining agreement between an
exclusive bargaining representative and any agency.

Sec. 754.205 Agency records.

The complaint, the applicant's supporting material, the agency's
administrative file, the notice of the proposed action, the employee's
written reply, if any, summary or transcript of the employee's oral
reply, if any, the notice of decision, and any order to the covered
agency effecting the action together with any supporting material, must
be maintained in the applicable Privacy Act system of records.

0
13. Add part 920 to read as follows:

PART 920--TIMING OF CRIMINAL HISTORY INQUIRIES

Subpart A--General Provisions
Sec.
920.101 Definitions.
920.102 Positions covered by Fair Chance Act regulations.
Subpart B--Timing of Inquiries Regarding Criminal History
920.201 Limitations on criminal history inquiries.
920.202 Violations.

Authority: 5 U.S.C. 1103(a)(5)(A), 9201-9206 and Pub. L. 116-
92, sec. 1122(b)(1).

Subpart A--General Provisions

Sec. 920.101 Definitions.

For the purpose of this part:
Agency means--
(1) An Executive agency as such term is defined in 5 U.S.C. 105,
including--
(i) An Executive department defined in 5 U.S.C. 101;
(ii) A Government corporation defined in 5 U.S.C. 103(1); and
(iii) An independent establishment defined in 5 U.S.C. 104,
including the Government Accountability Office;
(2) A military department as defined in 5 U.S.C. 102;
(3) The United States Postal Service and the Postal Regulatory
Commission; and
(4) Each component of the Executive Office of the President that is
an independent establishment, or that has a position in the competitive
service, with respect to an applicant for the position.
Applicant means a person who has applied to an agency under its
procedures for accepting applications consistent with governmentwide
regulations, as applicable.
Appointing authority means an employee in the executive branch of
the Government of the United States that has authority to make
appointments to positions in the civil service.
Conditional offer means an offer of employment to a position in the
civil service that is conditioned upon the results of a background
investigation, including, as relevant here, the results of a criminal
history inquiry.
Criminal history record information--(1) Except as provided in
paragraphs (2) and (3) f this definition, has the meaning given the
term in section 9101(a) of title 5, United States Code;
(2) Includes any information described in the first sentence of
section 9101(a)(2) of title 5, United States Code, that has been sealed
or expunged pursuant to law; and
(3) Includes information collected by a criminal justice agency,
relating to an act or alleged act of juvenile delinquency, that is
analogous to criminal history record information (including such
information that has been sealed or expunged pursuant to law).

[[Page 60333]]

Employee means an ``employee'' as defined in 5 U.S.C. 2105 and an
employee of the United States Postal Service or the Postal Regulatory
Commission.
Political appointment means an appointment by the President without
Senate confirmation (except those appointed under 5 CFR 213.3102(c));
an appointment to a position compensated under the Executive Schedule
(5 U.S.C. 5312 through 5316); an appointment of a White House Fellow to
be assigned as an assistant to a top-level Federal officer (5 CFR
213.3102(z)); a Schedule C appointment (5 CFR 213.3301, 213.3302); a
noncareer, limited term, or limited emergency Senior Executive Service
appointment (5 CFR part 317, subpart F); an appointee to serve in a
political capacity under agency-specific authority; and a provisional
political appointment.

Sec. 920.102 Positions covered by Fair Chance Act regulations.

(a) Positions covered. This part applies to all positions in the
competitive service, excepted service, and Senior Executive Service in
an agency.
(b) Exempt positions. For purposes of this part an exempt position
is any position for which a hiring agency is required by statutory
authority to make inquiries into an applicant's criminal history prior
to extending an offer of employment to the applicant.

Subpart B--Timing of Inquiries Regarding Criminal History

Sec. 920.201 Limitations on criminal history inquiries.

(a) Applicability. An employee of an agency may not request, in
oral or written form (including through the Declaration for Federal
Employment (Office of Personnel Management Optional Form 306) or any
similar successor form, the USAJOBS internet website, or any other
electronic means) that an applicant for an appointment to a position in
the civil service disclose criminal history record information
regarding the applicant before the appointing authority extends a
conditional offer to the applicant. This includes the following points
in the recruitment and hiring process:
(1) Initial application, through a job opportunity announcement on
USAJOBS, or through any recruitment/public notification such as on the
agency's website/social media, etc.;
(2) After an agency receives an initial application through its
back-end system, through shared service providers/recruiters/
contractors, or orally or via email and other forms of electronic
notification; and
(3) Prior to, during, or after a job interview. This prohibition
applies to agency personnel, including when they act through shared
service providers, contractors (acting on behalf of the agency)
involved in the agency's recruitment and hiring process, or automated
systems (specific to the agency or governmentwide).
(b) Exceptions for certain positions. (1) The prohibition under
paragraph (a) of this section shall not apply with respect to an
applicant for an appointment to a position:
(i) Which is exempt in accordance with Sec. 920.102(b);
(ii) That requires a determination of eligibility for access to
classified information;
(iii) Has been designated as a sensitive position under the
Position Designation System issued by OPM and the Office of Director of
National Intelligence, which describes in greater detail agency
requirements for designating positions that could bring about a
material adverse effect on the national security;
(iv) Is a dual-status military technician position in which an
applicant or employee is subject to a determination of eligibility for
acceptance or retention in the armed forces, in connection with
concurrent military membership; or
(v) Is a Federal law enforcement officer position meeting the
definition in section 115(c) of title 18, U.S. Code.
(2) The prohibition under paragraph (a) of this section shall not
apply with respect to an applicant for a political appointment.
(c) Notification to applicants. Each agency must publicize to
applicants the prohibition described in paragraph (a) of this section
in job opportunity announcements and on agency websites/portals for
positions that do not require a posting on USAJOBS, such as excepted
service positions, and in addition to information on where it has
posted about its complaint intake process under as required by part 754
of this chapter.

Sec. 920.202 Violations.

(a) An agency employee may not request, orally or in writing,
information about an applicant's criminal history prior to making a
conditional offer of employment to that applicant unless the position
is exempted or excepted in accordance with Sec. 920.201(b).
(b) A violation (or prohibited action) as defined in paragraph (a)
of this section occurs when agency personnel, shared service providers,
or contractors (acting on behalf of the agency) involved in the
agency's recruitment and hiring process, either personally or through
automated systems (specific to the agency or governmentwide), make oral
or written requests prior to giving a conditional offer of employment--
(1) In a job opportunity announcement on USAJOBS or in any
recruitment/public notification such as on the agency's website or
social media;
(2) In communications sent after an agency receives an initial
application, through an agency's talent acquisition system, shared
service providers/recruiters/contractors, orally or in writing
(including via email and other forms of electronic notification); or
(3) Prior to, during, or after a job interview or other applicant
assessment.
(c) When a prohibited request, announcement, or communication is
publicly posted or simultaneously distributed to multiple applicants,
it constitutes a single violation.
(d) Any violation as defined in paragraph (a) of this section is
subject to the complaint and penalty procedures in part 754 of this
chapter.

[FR Doc. 2023-18242 Filed 8-31-23; 8:45 am]
BILLING CODE 6325-39-P

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