Employee Dishonesty Insurance and Work Opportunity Tax Credit for Employers of Ex-Offenders: A Survey of the Impact on Service and Industrial Employers

• In Event: Reintegrating Offenders Into the Community

Abstract

The Federal Bonding Program is an initiative started in 1966 by the US Department of Labor to entice potential employers to hire ex-offenders and other at risk job seekers. Fidelity bonding insurance, known more disparagingly as employee dishonesty insurance is a type of coverage that insures the employer against monetary and property losses due to such crimes as theft, larceny, and forgery. The bonds are issued to employers free of charge who hire and retain ex-offenders, they last up to six months, a period believed long enough to observe the honesty of an ex-offender. Similarly, the Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers who hire ex-offenders and other targeted disenfranchised groups who experience significant barriers to employment. The tremendous growth in the prison population over the last 40 years has resulted in over 650,000 ex-offenders being released each year and returning to their communities. Bonding and tax credit initiatives were designed to aid ex-offenders in becoming legally self-sufficient, but are the incentives enough to convince employers to take a chance on an ex-offender? This research surveys employers in the service and industrial sectors as to the impact of these programs on their hiring decisions.

Authors

• Sandra Browning, University of Cincinnati

• Alberta Thrash, Central State University

• Tony Hill, University of Cincinnati