81_FR_86786 81 FR 86555 - Recruitment, Selection, and Placement (General) and Suitability

81 FR 86555 - Recruitment, Selection, and Placement (General) and Suitability

OFFICE OF PERSONNEL MANAGEMENT

Federal Register Volume 81, Issue 231 (December 1, 2016)

Page Range86555-86561
FR Document2016-28782

The U.S. Office of Personnel Management (OPM) is issuing a final rule revising 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. OPM is making this change to promote compliance with Merit System Principles as well as the goals of the Federal Interagency Reentry Council and the President's 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.'' In addition, the final rule will help agencies comply with the President's Memorandum of April 29, 2016, ``Promoting Rehabilitation and Reintegration of Formerly Incarcerated Individuals.'' The intended effect of this rule is to encourage more individuals with the requisite knowledge, skills, and ability to apply for Federal positions by making it more clear that the Government provides a fair opportunity to compete for Federal employment to applicants from all segments of society, including those with prior criminal histories or who have experienced financial difficulty through no fault of their own.

Federal Register, Volume 81 Issue 231 (Thursday, December 1, 2016)
[Federal Register Volume 81, Number 231 (Thursday, December 1, 2016)]
[Rules and Regulations]
[Pages 86555-86561]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-28782]



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Federal Register / Vol. 81, No. 231 / Thursday, December 1, 2016 / 
Rules and Regulations

[[Page 86555]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 330 and 731

RIN 3206-AN25


Recruitment, Selection, and Placement (General) and Suitability

AGENCY: U.S. Office of Personnel Management.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The U.S. Office of Personnel Management (OPM) is issuing a 
final rule revising 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. OPM is making this change to promote compliance 
with Merit System Principles as well as the goals of the Federal 
Interagency Reentry Council and the President's 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.'' In addition, the final rule 
will help agencies comply with the President's Memorandum of April 29, 
2016, ``Promoting Rehabilitation and Reintegration of Formerly 
Incarcerated Individuals.'' The intended effect of this rule is to 
encourage more individuals with the requisite knowledge, skills, and 
ability to apply for Federal positions by making it more clear that the 
Government provides a fair opportunity to compete for Federal 
employment to applicants from all segments of society, including those 
with prior criminal histories or who have experienced financial 
difficulty through no fault of their own.

DATES: Effective date: This final rule is effective January 3, 2017.
    Compliance date: March 31, 2017. As discussed below, OPM recognizes 
that there are legitimate, job/position-related reasons why a hiring 
agency may need to determine suitability at an earlier stage in the 
employment process. As such, this rule allows agencies to request from 
OPM an exception to accommodate such circumstances. Requests for an 
exception must be submitted to OPM by the agency's Chief Human Capital 
Officer (or equivalent) at the agency headquarters level. To permit 
agencies time to request exceptions where appropriate, this rule will 
have a compliance date of March 31, 2017.

FOR FURTHER INFORMATION CONTACT: Mr. Mike Gilmore by telephone on (202) 
606-2429, by fax at (202) 606-4430, by TTY at (202) 418-3134, or by 
email at [email protected].

SUPPLEMENTARY INFORMATION: On May 2, 2016, OPM issued a proposed rule 
at 81 FR 26173, to amend 5 CFR parts 330 and 731. Specifically, OPM 
proposed revisions to its regulations that would prohibit a hiring 
agency from making specific inquiries concerning an applicant's 
criminal or adverse credit background of the sort asked on the Optional 
Form (OF) 306, ``Declaration for Federal Employment'' in its 
``Background Information'' section, or in other forms used to determine 
suitability or conduct background investigations for Federal 
employment, until the hiring agency has made a conditional offer of 
employment to the applicant. The proposed rule also allows agencies to 
request from OPM an exception to collect background information earlier 
in the hiring process. OPM recognizes there are legitimate, job/
position-related reasons why a hiring agency may need to disqualify 
candidates with significant issues (including criminal history) from 
particular types of positions they are seeking to fill or to determine 
suitability at an earlier stage in the employment process. OPM received 
a total of 25 sets of comments: 17 from individuals, three from federal 
agencies, two from professional organizations, one from a trade 
association, one from a coalition of civic advocacy groups, and one 
from a private corporation. OPM's responses to the comments are 
discussed below.

Discussion of Comments

Comments Generally Opposed to the Proposed Rule

    Several individuals provided general comments opposing the proposed 
rule (two of these comments were not specific). These comments are as 
follows:
    One individual commented that Federal agencies should always 
consider an applicant's criminal background, and that all job 
announcements should advise anyone with a conviction record not to 
apply. A second commenter likewise stated that all resumes for Federal 
employment be ``unblemished'' by criminal history. OPM is not adopting 
these suggestions.
    While OPM agrees that Federal agencies must consider an applicant's 
criminal background as part of the suitability determination required 
for positions covered by part 731 of this chapter, agencies should not 
prohibit the consideration of applications from persons with conviction 
records during the selection process itself. Moreover, in most cases, 
the separate suitability determination can and should occur after the 
selection process and a conditional offer have been made, thereby 
separating criminal history as an aspect of the suitability 
determination from the factors that are relevant at the time of the 
initial assessment process. This aligns actual requirements with what 
we believe to be the predominant current practice, so that they better 
comport with the Merit System Principle stating that selection should 
be based solely on knowledge, skill, and ability, 5 U.S.C. 2301, and 
thus will encourage more individuals with the requisite knowledge, 
skills, and ability to apply for Federal positions.
    There are some positions for which Federal statute bars the 
employment of persons convicted of certain offenses. There may also be 
circumstances where a clean criminal history record must itself be one 
of the qualifications for a particular position, in light of the duties 
to be performed, and, therefore, becomes part of the examination for 
testing applicants for appointment in the competitive service that the 
President (and, in turn, through presidential redelegation, OPM) is 
entitled to prescribe. 5 U.S.C. 3301, 3302, 3304; E.O. 10577, as 
amended. Where criminal history-based disqualifications have a 
disparate

[[Page 86556]]

impact, the agency will need to be prepared to demonstrate that they 
are job-related and consistent with business necessity in order to 
defend its decisions from a challenge related to equal employment 
opportunity. Moreover, applicants cannot be found unsuitable on the 
basis of criminal conduct unless there is a nexus between that conduct 
and the efficiency of the service. Agencies have ample guidance 
relating to how to determine that nexus. Consistent with these 
principles, the proposed rule was intended to provide applicants from 
all segments of society, including those with prior criminal histories, 
a fair opportunity to compete for Federal employment.
    One commenter stated that some applicants should be eliminated from 
consideration at the start of the hiring process based on the severity 
of their criminal offense, the nature of the offense vis-a-vis the 
duties of the position being filled, and whether the position being 
filled requires a security clearance. OPM agrees that certain positions 
may require inquiries into applicants' criminal or adverse credit 
history to be conducted at the start of the hiring process, and the 
proposed rule allows agencies to request an exception from OPM to 
accommodate such circumstances. But OPM cannot agree that it is 
appropriate, as a general rule, to eliminate applicants from 
consideration based upon their criminal history, before the assessment 
process has even occurred. The purpose of this rule is to defer the 
suitability process, where criminal history must and will be considered 
as part of an overall assessment of character and conduct, until after 
the assessment of relative knowledge, skills, and abilities that leads 
to selection of the best-qualified candidate and the conditional offer 
of employment. The suitability rules expressly provide for the nature 
of the position and the nature and seriousness of the offense to be 
taken into account as additional considerations during the suitability 
process. See 5 CFR 731.202(c). Permitting agencies to consider criminal 
history information in isolation, outside of the suitability process, 
could result in an initial selection process not exclusively based upon 
each candidate's qualifications and relative level of knowledge, 
skills, and ability with respect to the position. And it might result 
in non-selection without the procedural protections that a final 
suitability action provides, which is not ideal. Accordingly, OPM 
rejects this comment, in part.

Comments in Support of the Proposed Rule

    A coalition representing criminal justice reform groups and civil 
and human rights advocates strongly supported the proposed rules, 
stating that when inquiries into criminal history are deferred until 
the conditional offer of employment, there is more clarity for the 
agency and the job applicant concerning the reason for a hiring 
decision based on a background check, and less opportunity for bias in 
the hiring process.
    A professional association cast its general support for the 
proposed changes, noting that requesting criminal history information 
on the OF-306, Declaration for Federal Employment, only after a 
conditional offer of employment has been extended constituted ``a 
sensible compromise'' between promoting fair hiring practices and 
adhering to the suitability requirements pertaining to Federal 
employment. This organization also supported the proposal to allow OPM 
to grant limited exceptions to these rules on a position-by-positon 
basis. We note that OPM would characterize what it is doing not as a 
``compromise,'' but rather as separating more clearly the process for 
assessing relative knowledge, skills, and abilities from the process 
for determining suitability for appointment to a position in a position 
covered by part 731 of this chapter.
    Two individuals also provided comments in general support of the 
proposed rule.

Comments Pertaining to the Safety, Risk, Integrity of the Civil 
Service, and Hiring Efficiency

    Three Federal agency commenters, one professional association, one 
trade association, and four members of the general public commented 
that the proposed rule would waste government resources, as well as 
applicants' time, because the hiring agency must begin the employment 
process but later may have to rescind a conditional offer of employment 
upon a determination that the applicant is ineligible for federal 
employment on the basis of suitability, security, facility access, or 
qualifications criteria. Some of these commenters noted that this could 
result in further delays because checks would then have to be performed 
on remaining candidates, or because other candidates would seek 
employment elsewhere due to the length of the hiring process. Some of 
these commenters expressed general concern that delaying applicant 
background screening could lengthen an already-lengthy Federal hiring 
process, and could have adverse effects on certain applicants with 
criminal histories by requiring them to proceed all the way through the 
application process before learning of their disqualification, and by 
giving them an unrealistic expectation of their prospects as 
candidates. In related comments, one individual stated that the 
proposal would make the federal hiring process more complex and 
cumbersome.
    One of the commenters from a Federal agency had calculated that 
over 10 percent of its law enforcement applicants who go through its 
pre-employment screening process are ultimately removed from 
consideration based on factors such as criminal history, delinquent 
debt, susceptibility to coercion, illegal use of drugs, and immigration 
violations, so that deferring the screening process would result in a 
significant unnecessary expenditure of agency time and resources in 
examination and qualifications assessment. The agency noted that these 
expenditures are significant because of its unique, agency- and 
position-related requirements, including the agency's significant 
volume of vacancies and applicants; its pre-employment polygraph and 
medical examination requirements; its law enforcement and national 
security mission; and its need for its employees to credibly testify in 
criminal proceedings. Another agency commenter emphasized that the 
nature, seriousness, recency, and job-relatedness of certain criminal 
violations would almost certainly be disqualifying for certain 
positions under OPM's suitability regulations, making deferral of an 
unfavorable decision especially unfair. The agency cited specific 
criminal conduct that would render an applicant unsuitable for 
firefighter, educator, child care worker, motor vehicle operator, or 
financial/budget positions.
    OPM acknowledges there may be instances in which an agency must 
rescind a job offer based on an applicant's criminal or adverse credit 
history, and then select another candidate, which could conceivably 
require that the agency screen and consider additional candidates in 
certain circumstances. But the commenters present no empirical evidence 
that changing the timing of background screening will have a general 
impact on time-to-hire, on the cost of background screening once it 
occurs, or on the efficiency of the Federal hiring process generally. 
As noted in the Notice of Proposed Rulemaking (81 FR at 26173), many 
agencies already wait until the later

[[Page 86557]]

stages of the hiring process to collect criminal history information. 
We also note that these comments do not adequately take into account 
OPM's concern that early inquiries into an applicant's background, 
including his or her criminal or credit history, could have the effect 
of discouraging motivated, well-qualified individuals from applying for 
a Federal job because they have an arrest record, when the arrest did 
not result in a conviction or when, following a conviction, they have 
fully complied with the penalty and have been rehabilitated in the eyes 
of the law. This discouragement also could impose a cost on the hiring 
process, by presenting hiring officials with a less competitive 
candidate pool.
    OPM does agree there may be limited circumstances or positions for 
which it is appropriate for a hiring agency to collect information 
about applicants' criminal or adverse credit history earlier in the 
hiring process, rather than at the point at which a conditional offer 
of employment is made to an applicant. The proposed rule allows for 
agencies to request an exception from OPM to accommodate such 
circumstances.
    With respect to these commenters' concerns about fairness to 
applicants, the intent of the proposed rule is to conform regulatory 
requirements to what we believe is the predominant agency practice and 
thus better serve the broader public policy ideal of providing 
applicants from all segments of society, including those with prior 
criminal histories, a fair opportunity to compete for Federal 
employment. Deferring consideration of this information to the stage at 
which suitability is adjudicated separates examining and assessment 
process from suitability, thereby encouraging applicants with criminal 
history to join the competition for vacant positions. It also means 
that the agency defers collection of criminal history information until 
the stage at which the agency is in a position to undertake a 
suitability determination, which makes the final decision reviewable 
and provides certain procedural protections.
    Two individuals commented that the proposed rule may have adverse 
national security implications because it could result in convicted 
felons having access to sensitive information. A third individual 
opposed the proposed rule and questioned the wisdom of hiring ex-
offenders who may then have access to employees' personal information 
and to sensitive taxpayer records. OPM disagrees, noting that the 
proposed rule is not eliminating the need for, nor mitigating the 
thoroughness of, background investigations and appropriate related 
adjudicative processes for applicants for Federal jobs. The proposed 
rule simply impacts when during the hiring process inquiries into an 
applicant's criminal or adverse credit history can begin.
    Another individual commented that delaying preliminary background 
screening could also delay the commencement of the full suitability 
background investigation required before appointment (or to finalize a 
contingent appointment) in the competitive service or the national 
security background investigation required to adjudicate eligibility 
for access to classified information. It is true that it could, in some 
cases, defer the commencement of the full investigation, but we 
believe, based upon earlier discussion with agencies, that most 
agencies already wait until the end of the selection process to 
commence those investigations. The proposed rule does not, in fact, 
change the current standard under 736.201(c) that a personnel 
background investigation may commence no later than the 14th day after 
placement, but that if the investigation is for a national security-
sensitive position, it must both commence and be completed prior to 
appointment unless one of the waiver or exception conditions described 
in 5 CFR 1400.202 applies. The proposed rule is fully consistent with 
the requirement in E.O. 12968 of Aug. 4, 1995, governing investigations 
for eligibility for access to classified information, which provides 
that ``[a]pplicants . . . required to provide relevant information 
pertaining to their background and character for use in investigating 
and adjudicating their eligibility for access'' are those who have 
``received an authorized conditional offer of employment for a position 
that requires access to classified information.'' E.O. 12968, 3 CFR, 
1995 Comp., p. 391, secs. 1.1(b), 3.2(a), reprinted as amended in 5 
U.S.C. 3161 note.
    One commenter mistakenly believes the proposed rule will weaken 
background checks, and thus poses a threat to the security of Federal 
employees, the American people, and U.S. government assets and secrets. 
The proposed rule does not, in any way, change the need to collect 
background information after the conditional job offer has been made 
and to evaluate any known issues prior to appointment (or after an 
appointment that is contingent upon a favorable adjudication). 
Similarly, it does not impact the integrity or thoroughness of the 
background investigation process. The proposed rule only affects the 
point at which an agency may collect information about an applicant's 
criminal or adverse credit history.
    Another individual believes the proposed rule will give the 
perception that the Federal government is establishing a hiring 
preference for ex-convicts or using Federal jobs as a relief-work or 
program for ex-convicts, which could demoralize the Government's 
workforce and discourage talented applicants from applying. This 
comment does not pertain to the merits of the rule but rather, 
expresses a concern that the rule will be misperceived to the detriment 
of the Federal hiring process. OPM believes that this concern is 
speculative. The proposed rule does not provide a hiring or selection 
priority for ex-convicts, nor does it allow individuals to be appointed 
who should be adjudicated unsuitable for Federal employment. Similarly, 
it has no bearing on whether an individual requires eligibility for 
access to classified information, and, if so, should be deemed eligible 
under the adjudicative guidelines for such decisions. The rule simply 
addresses at which point during the selection process an agency may 
make inquiries into an applicant's background, thereby helping to 
support a process where selections and conditional offers follow a fair 
and open competition based on applicants' relative knowledge, skill, 
and ability. In doing so, the rule is intended to attract all qualified 
applicants by making it more clear that, subject to certain exceptions, 
adverse background information will not be collected until after 
applicants' competencies are assessed, thereby reinforcing the notion 
that the Federal government is a model employer.
    Three commenters supported deferring the collection of applicants' 
criminal history information until later in the hiring process, but 
proposed alternative approaches that they believed would achieve a 
better balance between fairness versus timeliness, and efficiency. A 
commenter from a Federal agency suggested the rule be modified to allow 
agencies to administer the OF-306 when an employee is determined to be 
within reach for selection. Another commenter from a Federal agency 
suggested that the rule be modified to allow agencies to administer the 
OF-306 at the time of scheduling an interview, i.e., after preliminary 
qualifications screening but before selection. A professional 
association recommended following an example from state government, of 
conducting criminal history screening after an interview as part of the 
final selection process. While all of these approaches have merit, OPM 
is not adopting them

[[Page 86558]]

at this time because assessment instruments are not uniform across 
civil service examinations. Some examinations have an interview 
component while others do not; some employ multiple interviews. 
Permitting criminal history screening at the time of a conditional 
offer provides a uniform standard that is not dependent on the specific 
instruments that are being used in a competitive examination to assess 
applicant competencies.

Exception Based on Location or Type of Position

    A professional organization commented that the process by which 
agencies may seek exceptions to collect information earlier in the 
process about applicants' criminal or credit history (on a case-by-case 
basis) could result in additional delays. OPM will provide further 
guidance after the publication of this final rule, but notes that an 
agency will not have to wait until it has a vacant position to request 
an exception. If there is a position or group of positions within the 
agency for which there is a legitimate need to collect information 
earlier in the process, the hiring agency may request an exception at 
any time. Once an agency receives an exception from OPM to collect 
background information from applicants for a particular position or 
group of positions earlier in the hiring process, the agency will not 
be required to request an exception subsequently, or each time, the 
position is being filled thereafter.
    Another professional organization suggested that OPM make clear in 
the final rule that exceptions from the proposed changes must be 
requested prior to the posting of any vacancy announcement to which it 
will apply. Of course if an agency requests an exception on the ground 
that it is necessary to ask for certain background information as an 
aspect of determining whether a particular applicant is qualified for 
the position, then, the agency, of necessity, would be required to make 
that clear in advance of posting the job opportunity announcement. OPM 
agrees with this suggestion, however, even when the exception is to be 
requested in order to enable the agency to adjudicate suitability in 
advance, and has amended proposed 5 CFR part 330 subpart M accordingly.
    This organization suggested OPM modify 5 CFR 330.1300 by including 
specific conditions under which OPM may grant an exception to these 
provisions. OPM is not adopting this suggestion. OPM is not yet in a 
position to anticipate all of the circumstances that could warrant an 
exception, and wishes to gain experience with the regulation, and 
explore further the sorts of situations agencies may bring to its 
attention, before it limits its discretion to a list of specific 
conditions. Therefore we prefer, at least for now, to provide examples 
of the types of factors OPM will consider in determining whether to 
grant an exception.
    The same organization also suggested that the final rule include a 
provision requiring agencies which are granted an exception to provide 
notice of the exception in their job announcements for positions for 
which the exception was granted. OPM agrees that agencies which receive 
exceptions should provide notice of the exception in their job 
announcements. Among other things, an agency that receives an exception 
in order to use background information as an aspect of assessing 
qualifications will, of necessity, need to disclose the qualifications 
and how they will be assessed as part of the job opportunity 
announcement. We do not believe a requirement in the final rule is 
necessary; OPM will require notice in its approval letters granting 
such exceptions.
    One commenter from an agency and one individual suggested that OPM, 
in the final rule, specifically exempt from these provisions positions 
with law enforcement and national security duties. We see no reason why 
an agency filling a position that is national security sensitive cannot 
defer the collection of background information until after a putative 
selection, based upon relative degree of knowledge, skills, and 
abilities, has been made. Many agencies already do this. Moreover, even 
as to law enforcement positions, OPM is not adopting this suggestion. 
Because specific duties and agency requirements may differ, we prefer 
to rely on the mechanism for exceptions described in the proposed rule 
which allows agencies to request an exception for specific positions to 
collect background information pertaining to an applicant's criminal or 
adverse credit history earlier in the hiring process.
    A coalition representing criminal justice reform groups and civil 
and human rights advocates recommended that OPM permit no exception 
allowing agencies to collect information about applicants' criminal or 
adverse credit history prior to a conditional offer of employment. OPM 
is not adopting this suggestion. OPM leaves open the possibility that 
for certain positions there may be valid, job and position-related 
reasons why an agency may seek to disqualify applicants with 
significant criminal or adverse credit history backgrounds early in the 
process (such as law enforcement positions requiring the eventual 
appointee to be in a position to testify in legal proceedings). For 
these reasons OPM is retaining the exception provision.
    The coalition commented that, in the event the exception provision 
is retained in the final rule, OPM should place the burden of proof on 
agencies seeking exceptions, should adjudicate requests under a 
rigorous standard of proof, and should give the public the opportunity 
to respond in opposition to an agency's request for exception. OPM does 
not adopt this suggestion. Currently, there are no limitations on the 
point at which agencies may initiate the collection of background 
information. The decision to impose the restriction is a policy 
decision, not a legal requirement. Accordingly, we do not believe that 
a uniform burden and standard of proof or a public notice-and-comment 
process is necessary or would assist us in our decision-making process, 
and it would be likely to unnecessarily delay the hiring process. The 
manner in which OPM grants exceptions must be flexible.

Other Comments

    One agency commented that asking applicants whether they have been 
fired from a job, as is asked on the OF-306, in connection with 
competitive hiring is a valid question and that restricting employers 
from doing so before making a selection hinders the employer from fully 
evaluating applicants and choosing the best candidate. Another agency 
commented that it needs to use the OF-306 prior to a conditional offer 
of employment because it is not just a background screening form, but 
is also used to collect important applicant information related to an 
applicant's citizenship, Selective Service registration status, 
military service and type of discharge, and relatives. This information 
is needed to ensure that candidates meet legal requirements for 
appointment in competitive hiring. OPM agrees that inquiries into an 
applicant's prior employment may have a bearing on his or her fitness 
for the job and points out that the proposed rule does not restrict 
agencies from collecting information about an applicant's prior 
employment prior to making a selection. The context of the proposed 
rule is information of the sort asked on the OF-306's `Background 
Information' section specific to an applicant's criminal or adverse 
credit history. These provisions also do not prevent a hiring agency 
from collecting information about prior work history earlier in the 
hiring process. OPM has

[[Page 86559]]

amended the final rule to provide greater clarity with respect to this 
issue.
    OPM notes in this regard that agencies are not required to sponsor 
or conduct separate information collections subject to Office of 
Management and Budget (OMB) clearance in order to ask these kinds of 
questions to applicants as part of the competitive Civil Service hiring 
process. Under OMB's regulations implementing the Paperwork Reduction 
Act (PRA), ``[e]xaminations designed to test the aptitude, abilities, 
or knowledge of the persons tested and the collection of information 
for identification or classification in connection with such 
examinations'' do not constitute information collections subject to the 
PRA's requirements. See 5 CFR 1320.3(h)(7).
    One individual asked whether the proposed rule was ``politically 
motivated'' for an electoral purpose. It was not. The origins of the 
proposed rule began several years ago. OPM proposed this rule to better 
harmonize the the requirements concerning the timing and objectives of 
the merit selection process and the suitability function.
    One professional organization supports the proposal to include 
these rules under 5 CFR part 731 to ensure that any non-selections 
based on information from the OF-306 are appealable to the Merit 
Systems Protection Board (MSPB) under 5 CFR part 731.501. It appears 
the commenter may have misinterpreted the proposed rule. Only 
suitability actions as defined in 5 CFR part 731.203 (cancellation of 
eligibility, removal, cancellation of reinstatement rights, and 
debarment) are appealable to the MSPB. Nonselection is not appealable, 
as stated in 5 CFR 302.406(g) and 731.203(b).
    The same organization recommended that OPM codify in the final 
rules the mitigating factors described in section 2(b)(i-iii) of the 
Presidential memorandum titled, ``Promoting Rehabilitation and 
Reintegration of Formerly Incarcerated Individuals'' (81 FR 26993, 
26995). OPM is not adopting this suggestion because these criteria 
pertain to occupational licensure, not to whether an individual is 
suitable for Federal employment. The purpose of the proposed rule is to 
affect at what point in the hiring process an agency may make inquiries 
into an applicant's background, not to impact the criteria used to 
determine an applicant's suitability for employment. However, we note 
that separate sections of this Memorandum are relevant to this rule. 
Section 1 formally reconstitutes the Federal Interagency Reentry 
Council as a Presidentially-established Council; section 1(a)(xvii) 
formalizes OPM's membership; and section 2(a) directs that ``Agencies 
making suitability determinations for Federal employment shall review 
their procedures for evaluating an applicant's criminal records to 
ensure compliance with 5 CFR part 731 and any related, binding guidance 
issued by the Office of Personnel Management, with the aim of 
evaluating each individual's character and conduct.'' OPM expects that 
this rule will assist agencies in complying with the President's 
mandate.
    This organization also asked that OPM amend its suitability 
regulations to require an agency to include a record of any exception 
granted by OPM, permitting it to conduct suitability screening prior to 
a conditional offer of employment, as part of the ``materials relied 
upon'' in charging an individual. OPM does not accept this 
recommendation, because the timing of a suitability inquiry is 
unrelated to the charges brought against an applicant, appointee, or 
employee in a proposed suitability action.
    A coalition representing criminal justice reform groups and civil 
and human rights advocates recommended that OPM implement a centralized 
means of collecting data on the impact of the proposed rule by 
documenting the number of conditional offers and final hiring decisions 
of persons with prior convictions. The coalition believes this data 
would help maintain the integrity of the background check process and 
also help with oversight. OPM is not adopting this suggestion as part 
of the rulemaking but will oversee agencies' compliance with the rule, 
as part of the merit system audit and compliance process under Civil 
Service Rules V and X.
    The coalition also suggested the proposed rules should apply to 
positions filled in the excepted service. OPM notes these provisions do 
apply to certain positions in the excepted service. OPM is not 
accepting this recommendation as to all excepted service positions, but 
notes that under the current suitability regulations at 5 CFR 
731.101(b), the definition of ``Covered Position'' includes a small 
subset of excepted service positions within OPM's jurisdiction, namely 
positions in the excepted service ``where the incumbent can be 
noncompetitively converted to the competitive service. . . .''
    For other positions in the excepted service, OPM generally lacks 
the authority to prescribe qualification, fitness, or suitability 
standards or to regulate the timing of employer inquiries. For those 
positions excepted from the competitive service by Acts of Congress, 
hiring procedures and standards for making qualification or fitness 
determinations may be prescribed by statute. Where the statute is 
silent, or where the exception from the competitive service is made by 
the President (or by OPM under presidential delegation), Civil Service 
Rule VI, Sec.  6.3(b) states that ``[t]o the extent permitted by law 
and the provisions of this part, appointments and position changes in 
the excepted service shall be made in accordance with such regulations 
and practices as the head of the agency concerned finds necessary.'' 
See 5 CFR 6.3(b) (codifying this section of the Rule). Agency heads 
have the discretion to decide whether or not to establish criteria for 
making fitness determinations and determine whether their standards are 
equivalent to suitability standards established by OPM (but must 
consider OPM guidance when exercising this discretion). See Section 3 
of E.O. 13488 of January 16, 2009, 3 CFR, 2009 Comp., p. 189.
    The coalition notes, in support of its comment, that under Civil 
Service Rule VI, Sec.  6.3(a), ``OPM, in its discretion, may by 
regulation prescribe conditions under which excepted positions may be 
filled in the same manner as competitive positions are filled and 
conditions under which persons so appointed may acquire a competitive 
status in accordance with the Civil Service Rules and Regulations.'' 
The coalition cites this provision as ``clear authority'' for OPM to 
impose identical hiring requirements on the excepted service. However, 
the cited provision is not authority for OPM to override the discretion 
given to agencies in filling positions in the excepted service. Rather, 
it is a mechanism for OPM to permit agencies to hire for the excepted 
service in the same manner as for the competitive service and upon 
doing so, to give competitive status (i.e., the ability to be 
noncompetitively assigned to positions in the competitive service) to 
excepted service employees who have been hired in that manner. See 5 
CFR 212.301, 302.102(c).
    The coalition suggested that OPM include language in the final rule 
that requires agencies to comply with title VII of the Civil Rights Act 
of 1964, and Equal Employment Opportunity Commission (EEOC) guidelines 
pertaining to the use of conviction records in hiring decisions, 
including an individualized assessment of applicants' criminal history. 
OPM is not adopting this suggestion because these rules only pertain to 
the timing of inquiries into an applicant's criminal or adverse credit 
history, not to the selection process for

[[Page 86560]]

Federal employment, and agencies have an independent obligation to 
comply with title VII.

Changes to the OF-306

    One agency and a coalition representing criminal justice reform 
groups and civil and human rights advocates suggested OPM also make 
changes to the OF-306 to facilitate the rule's implementation. OPM is 
not addressing these comments at this time because the OF-306 and other 
investigative questionnaires are not promulgated through rulemaking, 
but through the separate PRA process. The comments may be resubmitted 
when the information collections are up for renewal under the PRA.
    One individual suggested that OPM remove the requirement to provide 
a Social Security number (SSN) on the OF-306. OPM is not adopting this 
suggestion because it is beyond the scope of the proposed rule, which 
pertains to when during the hiring process an agency may collect 
information about an applicant's criminal or adverse credit history.

Comments Outside the Scope of the Proposed Rule

    A private company commented that the proposed rule will 
inadvertently deter private sector employers from taking advantage of 
the Work Opportunity Tax Credit (WOTC), which is designed to encourage 
private employers to hire people with criminal histories, among others. 
This company requests that OPM clarify in the final rule that private 
employers can use the WOTC credit without violating these provisions. 
This comment is beyond the scope of the proposed regulations, which 
only pertain to Federal employment. OPM suggests private companies 
consult the Internal Revenue Service for information concerning the 
WOTC.
    The same company suggested that OPM make clear in the final rule 
that these provisions only pertain to Federal employment. OPM is not 
adopting this suggestion because we do not believe such clarification 
is necessary. By statute and under the Civil Service Rules, OPM's 
jurisdiction in these matters is limited to Federal employment.
    One organization similarly expressed concern that the proposed rule 
may persuade state and local governments to enact regulatory or 
contractual measures which, in turn, impose burdensome requirements on 
private investigative and security firms. The comment is not 
accompanied by a specific recommendation related to the rulemaking, and 
is speculative, so there is no basis for OPM to consider the comment.
    A coalition representing criminal justice reform groups and civil 
and human rights advocates recommended that OPM also extend these rules 
to its contractors. OPM cannot adopt this suggestion as part of the 
rulemaking, which pertains only to competitive Federal hiring, not 
contracting.
    One individual asked whether there is evidence that ``many'' 
agencies administer the Optional Form (OF) 306, ``Declaration for 
Federal Employment'' prior to the point at which a tentative job offer 
is made. OPM stated in the Supplementary Information section of the 
proposed rule that to the contrary ``many agencies already . . . wait 
until the later stages of the hiring process to collect this kind of 
information.'' (81 FR at 26173.) This assertion is based upon the 
results of a survey we conducted on this matter. This survey was 
developed and issued to all Chief Human Capital Officers Act agencies. 
Eighteen (18) agencies/sub-agencies responded to the survey. The 
comment was not accompanied by a recommendation related to the 
rulemaking, so there is no basis to consider the comment.
    Two commenters opposed the proposed rule in the mistaken belief 
that the rule's purpose was to improve employment opportunities for 
individuals who had become criminals ``through no fault of their own.'' 
The commenters were apparently confused by a citation, in the proposed 
rule's Supplementary Information (81 FR at 26174), to a Presidential 
Memorandum, ``Enhancing Safeguards to Prevent the Undue Denial of 
Federal Employment Opportunities to the Unemployed and Those Facing 
Financial Difficulty Through No Fault of Their Own (79 FR 7045). OPM 
cited the memorandum as a basis to defer the collection of certain 
applicant employment or credit information until the later stages of 
the hiring process, not for the reasons the commenters suggested. 
Because the comments were based on a faulty premise, OPM did not 
consider them.
    One commenter asked that OPM revise the proposed rule to improve 
the formula for cost-of-living allowances for annuities. The comment 
was outside the scope of the proposal and was not considered.

Executive Order 13563 and Executive Order 12866, Regulatory Review

    The Office of Management and Budget has reviewed this rule in 
accordance with E.O. 13563 and 12866.

Regulatory Flexibility Act

    I certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because the 
regulations pertain 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.

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

    This action pertains to agency management, personnel and 
organization and does not substantially affect the rights or 
obligations of non-agency parties and, accordingly, is not a ``rule'' 
as that term is used by the Congressional Review Act (Subtitle E of the 
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)). 
Therefore, the reporting requirement of 5 U.S.C. 801 does not apply.

Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35)

    This final regulatory action will not impose any additional 
reporting or recordkeeping requirements under the Paperwork Reduction 
Act.

List of Subjects

5 CFR Part 330

    Armed forces reserves, District of Columbia, Government employees.

5 CFR Part 731

    Administrative practices and procedures, Government employees.

U.S. Office of Personnel Management
Beth F. Cobert,
Acting Director.

    Accordingly, OPM is amending 5 CFR parts 330 and 731 as follows:

[[Page 86561]]

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

0
1. The authority citation for part 330 continues 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).

0
2. Add subpart M, consisting of Sec.  330.1300 to read as follows:

Subpart M--Timing of Background Investigations


Sec.  330.1300   Timing of suitability inquiries in competitive hiring.

    A hiring agency may not make specific inquiries concerning an 
applicant's criminal or credit background of the sort asked on the OF-
306 or other forms used to conduct suitability investigations for 
Federal employment (i.e., inquiries into an applicant's criminal or 
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, or previous work history, prior to making a 
conditional offer of employment to an applicant.
    However, in certain situations, agencies may have a business need 
to obtain information about the 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 evaluate an applicant's criminal or 
adverse credit history earlier in the process or consider the 
disqualification of candidates with criminal backgrounds or other 
conduct issues from particular types of positions. OPM will consider 
such factors as, but not limited to, the nature of the position being 
filled and whether a clean criminal 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 adjudicate 
suitability 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 his or her 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 background information prior to 
completion of the assessment process and the making of a conditional 
offer of employment.

PART 731--SUITABILITY

0
3. The authority citation for part 731 continues to read as follows:

    Authority:  5 U.S.C. 1302, 3301, 7301; 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.

0
4. In Sec.  731.103, revise paragraph (d) 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 of the sort asked on the 
OF-306 or other forms used to conduct suitability investigations for 
Federal employment (i.e., inquiries into an applicant's criminal or 
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, or previous work history, prior to making a 
conditional offer of employment to an applicant. However, in certain 
situations, agencies may have a business need to obtain information 
about the suitability or background of applicants earlier in the 
process. If so, agencies must request an exception from the Office of 
Personnel Management, in accordance with the provisions of 5 CFR part 
330 subpart M.
    (2) OPM reserves the right to undertake a determination of 
suitability based upon evidence of falsification or fraud relating to 
an examination or appointment at any point when information giving rise 
to such a charge is discovered. OPM must be informed in all cases where 
there is evidence of material, intentional false statements, or 
deception or fraud in examination or appointment, and OPM will take a 
suitability action where warranted.
* * * * *
[FR Doc. 2016-28782 Filed 11-30-16; 8:45 am]
 BILLING CODE 6325-39-P



                                                                                                                                                                                                 86555

                                                Rules and Regulations                                                                                         Federal Register
                                                                                                                                                              Vol. 81, No. 231

                                                                                                                                                              Thursday, December 1, 2016



                                                This section of the FEDERAL REGISTER                      Compliance date: March 31, 2017. As                 Discussion of Comments
                                                contains regulatory documents having general            discussed below, OPM recognizes that
                                                applicability and legal effect, most of which                                                                 Comments Generally Opposed to the
                                                                                                        there are legitimate, job/position-related            Proposed Rule
                                                are keyed to and codified in the Code of
                                                                                                        reasons why a hiring agency may need
                                                Federal Regulations, which is published under                                                                    Several individuals provided general
                                                50 titles pursuant to 44 U.S.C. 1510.                   to determine suitability at an earlier
                                                                                                        stage in the employment process. As                   comments opposing the proposed rule
                                                                                                                                                              (two of these comments were not
                                                The Code of Federal Regulations is sold by              such, this rule allows agencies to
                                                the Superintendent of Documents. Prices of                                                                    specific). These comments are as
                                                                                                        request from OPM an exception to
                                                new books are listed in the first FEDERAL                                                                     follows:
                                                                                                        accommodate such circumstances.                          One individual commented that
                                                REGISTER issue of each week.
                                                                                                        Requests for an exception must be                     Federal agencies should always
                                                                                                        submitted to OPM by the agency’s Chief                consider an applicant’s criminal
                                                OFFICE OF PERSONNEL                                     Human Capital Officer (or equivalent) at              background, and that all job
                                                MANAGEMENT                                              the agency headquarters level. To                     announcements should advise anyone
                                                                                                        permit agencies time to request                       with a conviction record not to apply.
                                                5 CFR Parts 330 and 731                                 exceptions where appropriate, this rule               A second commenter likewise stated
                                                                                                        will have a compliance date of March                  that all resumes for Federal employment
                                                RIN 3206–AN25                                           31, 2017.                                             be ‘‘unblemished’’ by criminal history.
                                                                                                                                                              OPM is not adopting these suggestions.
                                                Recruitment, Selection, and Placement                   FOR FURTHER INFORMATION CONTACT:   Mr.                   While OPM agrees that Federal
                                                (General) and Suitability                               Mike Gilmore by telephone on (202)                    agencies must consider an applicant’s
                                                                                                        606–2429, by fax at (202) 606–4430, by                criminal background as part of the
                                                AGENCY:  U.S. Office of Personnel                       TTY at (202) 418–3134, or by email at
                                                Management.                                                                                                   suitability determination required for
                                                                                                        Michael.gilmore@opm.gov.                              positions covered by part 731 of this
                                                ACTION: Final rule.                                                                                           chapter, agencies should not prohibit
                                                                                                        SUPPLEMENTARY INFORMATION:      On May 2,
                                                SUMMARY:    The U.S. Office of Personnel                2016, OPM issued a proposed rule at 81                the consideration of applications from
                                                Management (OPM) is issuing a final                                                                           persons with conviction records during
                                                                                                        FR 26173, to amend 5 CFR parts 330
                                                rule revising its regulations pertaining                                                                      the selection process itself. Moreover, in
                                                                                                        and 731. Specifically, OPM proposed                   most cases, the separate suitability
                                                to when, during the hiring process, a                   revisions to its regulations that would
                                                hiring agency can request information                                                                         determination can and should occur
                                                                                                        prohibit a hiring agency from making                  after the selection process and a
                                                typically collected during a background                 specific inquiries concerning an
                                                investigation from an applicant for                                                                           conditional offer have been made,
                                                                                                        applicant’s criminal or adverse credit                thereby separating criminal history as
                                                Federal employment. OPM is making                       background of the sort asked on the
                                                this change to promote compliance with                                                                        an aspect of the suitability
                                                                                                        Optional Form (OF) 306, ‘‘Declaration                 determination from the factors that are
                                                Merit System Principles as well as the                  for Federal Employment’’ in its                       relevant at the time of the initial
                                                goals of the Federal Interagency Reentry
                                                                                                        ‘‘Background Information’’ section, or in             assessment process. This aligns actual
                                                Council and the President’s
                                                                                                        other forms used to determine                         requirements with what we believe to be
                                                Memorandum of January 31, 2014,
                                                                                                        suitability or conduct background                     the predominant current practice, so
                                                ‘‘Enhancing Safeguards to Prevent the
                                                                                                        investigations for Federal employment,                that they better comport with the Merit
                                                Undue Denial of Federal Employment
                                                                                                        until the hiring agency has made a                    System Principle stating that selection
                                                Opportunities to the Unemployed and
                                                                                                        conditional offer of employment to the                should be based solely on knowledge,
                                                Those Facing Financial Difficulty
                                                                                                        applicant. The proposed rule also                     skill, and ability, 5 U.S.C. 2301, and
                                                Through No Fault of Their Own.’’ In
                                                                                                        allows agencies to request from OPM an                thus will encourage more individuals
                                                addition, the final rule will help                                                                            with the requisite knowledge, skills, and
                                                agencies comply with the President’s                    exception to collect background
                                                                                                        information earlier in the hiring process.            ability to apply for Federal positions.
                                                Memorandum of April 29, 2016,                                                                                    There are some positions for which
                                                ‘‘Promoting Rehabilitation and                          OPM recognizes there are legitimate,
                                                                                                        job/position-related reasons why a                    Federal statute bars the employment of
                                                Reintegration of Formerly Incarcerated                                                                        persons convicted of certain offenses.
                                                Individuals.’’ The intended effect of this              hiring agency may need to disqualify
                                                                                                                                                              There may also be circumstances where
                                                rule is to encourage more individuals                   candidates with significant issues
                                                                                                                                                              a clean criminal history record must
                                                with the requisite knowledge, skills, and               (including criminal history) from                     itself be one of the qualifications for a
                                                ability to apply for Federal positions by               particular types of positions they are                particular position, in light of the duties
                                                making it more clear that the                           seeking to fill or to determine suitability           to be performed, and, therefore,
                                                Government provides a fair opportunity                  at an earlier stage in the employment                 becomes part of the examination for
                                                to compete for Federal employment to                    process. OPM received a total of 25 sets              testing applicants for appointment in
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                                                applicants from all segments of society,                of comments: 17 from individuals, three               the competitive service that the
                                                including those with prior criminal                     from federal agencies, two from                       President (and, in turn, through
                                                histories or who have experienced                       professional organizations, one from a                presidential redelegation, OPM) is
                                                financial difficulty through no fault of                trade association, one from a coalition of            entitled to prescribe. 5 U.S.C. 3301,
                                                their own.                                              civic advocacy groups, and one from a                 3302, 3304; E.O. 10577, as amended.
                                                DATES: Effective date: This final rule is               private corporation. OPM’s responses to               Where criminal history-based
                                                effective January 3, 2017.                              the comments are discussed below.                     disqualifications have a disparate


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                                                86556            Federal Register / Vol. 81, No. 231 / Thursday, December 1, 2016 / Rules and Regulations

                                                impact, the agency will need to be                      Comments in Support of the Proposed                   and could have adverse effects on
                                                prepared to demonstrate that they are                   Rule                                                  certain applicants with criminal
                                                job-related and consistent with business                   A coalition representing criminal                  histories by requiring them to proceed
                                                necessity in order to defend its                        justice reform groups and civil and                   all the way through the application
                                                decisions from a challenge related to                   human rights advocates strongly                       process before learning of their
                                                equal employment opportunity.                           supported the proposed rules, stating                 disqualification, and by giving them an
                                                Moreover, applicants cannot be found                    that when inquiries into criminal                     unrealistic expectation of their
                                                unsuitable on the basis of criminal                     history are deferred until the                        prospects as candidates. In related
                                                conduct unless there is a nexus between                                                                       comments, one individual stated that
                                                                                                        conditional offer of employment, there
                                                that conduct and the efficiency of the                                                                        the proposal would make the federal
                                                                                                        is more clarity for the agency and the
                                                service. Agencies have ample guidance                                                                         hiring process more complex and
                                                                                                        job applicant concerning the reason for
                                                                                                                                                              cumbersome.
                                                relating to how to determine that nexus.                a hiring decision based on a background                  One of the commenters from a Federal
                                                Consistent with these principles, the                   check, and less opportunity for bias in               agency had calculated that over 10
                                                proposed rule was intended to provide                   the hiring process.                                   percent of its law enforcement
                                                applicants from all segments of society,                   A professional association cast its                applicants who go through its pre-
                                                including those with prior criminal                     general support for the proposed                      employment screening process are
                                                histories, a fair opportunity to compete                changes, noting that requesting criminal              ultimately removed from consideration
                                                for Federal employment.                                 history information on the OF–306,                    based on factors such as criminal
                                                                                                        Declaration for Federal Employment,                   history, delinquent debt, susceptibility
                                                   One commenter stated that some
                                                                                                        only after a conditional offer of                     to coercion, illegal use of drugs, and
                                                applicants should be eliminated from
                                                                                                        employment has been extended                          immigration violations, so that deferring
                                                consideration at the start of the hiring                constituted ‘‘a sensible compromise’’
                                                process based on the severity of their                                                                        the screening process would result in a
                                                                                                        between promoting fair hiring practices               significant unnecessary expenditure of
                                                criminal offense, the nature of the                     and adhering to the suitability
                                                offense vis-a-vis the duties of the                                                                           agency time and resources in
                                                                                                        requirements pertaining to Federal                    examination and qualifications
                                                position being filled, and whether the                  employment. This organization also
                                                position being filled requires a security                                                                     assessment. The agency noted that these
                                                                                                        supported the proposal to allow OPM to                expenditures are significant because of
                                                clearance. OPM agrees that certain                      grant limited exceptions to these rules               its unique, agency- and position-related
                                                positions may require inquiries into                    on a position-by-positon basis. We note               requirements, including the agency’s
                                                applicants’ criminal or adverse credit                  that OPM would characterize what it is                significant volume of vacancies and
                                                history to be conducted at the start of                 doing not as a ‘‘compromise,’’ but rather             applicants; its pre-employment
                                                the hiring process, and the proposed                    as separating more clearly the process                polygraph and medical examination
                                                rule allows agencies to request an                      for assessing relative knowledge, skills,             requirements; its law enforcement and
                                                exception from OPM to accommodate                       and abilities from the process for                    national security mission; and its need
                                                such circumstances. But OPM cannot                      determining suitability for appointment               for its employees to credibly testify in
                                                agree that it is appropriate, as a general              to a position in a position covered by                criminal proceedings. Another agency
                                                rule, to eliminate applicants from                      part 731 of this chapter.                             commenter emphasized that the nature,
                                                consideration based upon their criminal                    Two individuals also provided                      seriousness, recency, and job-
                                                history, before the assessment process                  comments in general support of the                    relatedness of certain criminal
                                                has even occurred. The purpose of this                  proposed rule.                                        violations would almost certainly be
                                                rule is to defer the suitability process,               Comments Pertaining to the Safety,                    disqualifying for certain positions under
                                                where criminal history must and will be                 Risk, Integrity of the Civil Service, and             OPM’s suitability regulations, making
                                                considered as part of an overall                        Hiring Efficiency                                     deferral of an unfavorable decision
                                                assessment of character and conduct,                                                                          especially unfair. The agency cited
                                                until after the assessment of relative                    Three Federal agency commenters,                    specific criminal conduct that would
                                                knowledge, skills, and abilities that                   one professional association, one trade               render an applicant unsuitable for
                                                                                                        association, and four members of the                  firefighter, educator, child care worker,
                                                leads to selection of the best-qualified
                                                                                                        general public commented that the                     motor vehicle operator, or financial/
                                                candidate and the conditional offer of
                                                                                                        proposed rule would waste government                  budget positions.
                                                employment. The suitability rules
                                                                                                        resources, as well as applicants’ time,                  OPM acknowledges there may be
                                                expressly provide for the nature of the
                                                                                                        because the hiring agency must begin                  instances in which an agency must
                                                position and the nature and seriousness                 the employment process but later may                  rescind a job offer based on an
                                                of the offense to be taken into account                 have to rescind a conditional offer of                applicant’s criminal or adverse credit
                                                as additional considerations during the                 employment upon a determination that                  history, and then select another
                                                suitability process. See 5 CFR                          the applicant is ineligible for federal               candidate, which could conceivably
                                                731.202(c). Permitting agencies to                      employment on the basis of suitability,               require that the agency screen and
                                                consider criminal history information in                security, facility access, or qualifications          consider additional candidates in
                                                isolation, outside of the suitability                   criteria. Some of these commenters                    certain circumstances. But the
                                                process, could result in an initial                     noted that this could result in further               commenters present no empirical
                                                selection process not exclusively based                 delays because checks would then have                 evidence that changing the timing of
                                                upon each candidate’s qualifications                    to be performed on remaining                          background screening will have a
jstallworth on DSK7TPTVN1PROD with RULES




                                                and relative level of knowledge, skills,                candidates, or because other candidates               general impact on time-to-hire, on the
                                                and ability with respect to the position.               would seek employment elsewhere due                   cost of background screening once it
                                                And it might result in non-selection                    to the length of the hiring process. Some             occurs, or on the efficiency of the
                                                without the procedural protections that                 of these commenters expressed general                 Federal hiring process generally. As
                                                a final suitability action provides, which              concern that delaying applicant                       noted in the Notice of Proposed
                                                is not ideal. Accordingly, OPM rejects                  background screening could lengthen an                Rulemaking (81 FR at 26173), many
                                                this comment, in part.                                  already-lengthy Federal hiring process,               agencies already wait until the later


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                                                                 Federal Register / Vol. 81, No. 231 / Thursday, December 1, 2016 / Rules and Regulations                                        86557

                                                stages of the hiring process to collect                 appropriate related adjudicative                      information about an applicant’s
                                                criminal history information. We also                   processes for applicants for Federal jobs.            criminal or adverse credit history.
                                                note that these comments do not                         The proposed rule simply impacts when                    Another individual believes the
                                                adequately take into account OPM’s                      during the hiring process inquiries into              proposed rule will give the perception
                                                concern that early inquiries into an                    an applicant’s criminal or adverse credit             that the Federal government is
                                                applicant’s background, including his or                history can begin.                                    establishing a hiring preference for ex-
                                                her criminal or credit history, could                      Another individual commented that                  convicts or using Federal jobs as a relief-
                                                have the effect of discouraging                         delaying preliminary background                       work or program for ex-convicts, which
                                                motivated, well-qualified individuals                   screening could also delay the                        could demoralize the Government’s
                                                from applying for a Federal job because                 commencement of the full suitability                  workforce and discourage talented
                                                they have an arrest record, when the                    background investigation required                     applicants from applying. This
                                                arrest did not result in a conviction or                before appointment (or to finalize a                  comment does not pertain to the merits
                                                when, following a conviction, they have                 contingent appointment) in the                        of the rule but rather, expresses a
                                                fully complied with the penalty and                     competitive service or the national                   concern that the rule will be
                                                have been rehabilitated in the eyes of                  security background investigation                     misperceived to the detriment of the
                                                the law. This discouragement also could                 required to adjudicate eligibility for                Federal hiring process. OPM believes
                                                impose a cost on the hiring process, by                 access to classified information. It is               that this concern is speculative. The
                                                presenting hiring officials with a less                 true that it could, in some cases, defer              proposed rule does not provide a hiring
                                                competitive candidate pool.                             the commencement of the full                          or selection priority for ex-convicts, nor
                                                   OPM does agree there may be limited                  investigation, but we believe, based                  does it allow individuals to be
                                                circumstances or positions for which it                 upon earlier discussion with agencies,                appointed who should be adjudicated
                                                is appropriate for a hiring agency to                   that most agencies already wait until the             unsuitable for Federal employment.
                                                collect information about applicants’                   end of the selection process to                       Similarly, it has no bearing on whether
                                                criminal or adverse credit history earlier              commence those investigations. The                    an individual requires eligibility for
                                                in the hiring process, rather than at the               proposed rule does not, in fact, change               access to classified information, and, if
                                                point at which a conditional offer of                   the current standard under 736.201(c)                 so, should be deemed eligible under the
                                                employment is made to an applicant.                     that a personnel background                           adjudicative guidelines for such
                                                The proposed rule allows for agencies to                investigation may commence no later                   decisions. The rule simply addresses at
                                                request an exception from OPM to                        than the 14th day after placement, but                which point during the selection
                                                accommodate such circumstances.                         that if the investigation is for a national           process an agency may make inquiries
                                                   With respect to these commenters’                    security-sensitive position, it must both             into an applicant’s background, thereby
                                                concerns about fairness to applicants,                  commence and be completed prior to                    helping to support a process where
                                                the intent of the proposed rule is to                   appointment unless one of the waiver or               selections and conditional offers follow
                                                conform regulatory requirements to                      exception conditions described in 5 CFR               a fair and open competition based on
                                                what we believe is the predominant                      1400.202 applies. The proposed rule is                applicants’ relative knowledge, skill,
                                                agency practice and thus better serve the               fully consistent with the requirement in              and ability. In doing so, the rule is
                                                broader public policy ideal of providing                E.O. 12968 of Aug. 4, 1995, governing                 intended to attract all qualified
                                                applicants from all segments of society,                investigations for eligibility for access to          applicants by making it more clear that,
                                                including those with prior criminal                     classified information, which provides                subject to certain exceptions, adverse
                                                histories, a fair opportunity to compete                that ‘‘[a]pplicants . . . required to                 background information will not be
                                                for Federal employment. Deferring                       provide relevant information pertaining               collected until after applicants’
                                                consideration of this information to the                to their background and character for                 competencies are assessed, thereby
                                                stage at which suitability is adjudicated               use in investigating and adjudicating                 reinforcing the notion that the Federal
                                                separates examining and assessment                      their eligibility for access’’ are those              government is a model employer.
                                                process from suitability, thereby                       who have ‘‘received an authorized                        Three commenters supported
                                                encouraging applicants with criminal                    conditional offer of employment for a                 deferring the collection of applicants’
                                                history to join the competition for                     position that requires access to                      criminal history information until later
                                                vacant positions. It also means that the                classified information.’’ E.O. 12968, 3               in the hiring process, but proposed
                                                agency defers collection of criminal                    CFR, 1995 Comp., p. 391, secs. 1.1(b),                alternative approaches that they
                                                history information until the stage at                  3.2(a), reprinted as amended in 5 U.S.C.              believed would achieve a better balance
                                                which the agency is in a position to                    3161 note.                                            between fairness versus timeliness, and
                                                undertake a suitability determination,                     One commenter mistakenly believes                  efficiency. A commenter from a Federal
                                                which makes the final decision                          the proposed rule will weaken                         agency suggested the rule be modified to
                                                reviewable and provides certain                         background checks, and thus poses a                   allow agencies to administer the OF–
                                                procedural protections.                                 threat to the security of Federal                     306 when an employee is determined to
                                                   Two individuals commented that the                   employees, the American people, and                   be within reach for selection. Another
                                                proposed rule may have adverse                          U.S. government assets and secrets. The               commenter from a Federal agency
                                                national security implications because it               proposed rule does not, in any way,                   suggested that the rule be modified to
                                                could result in convicted felons having                 change the need to collect background                 allow agencies to administer the OF–
                                                access to sensitive information. A third                information after the conditional job                 306 at the time of scheduling an
                                                individual opposed the proposed rule                    offer has been made and to evaluate any               interview, i.e., after preliminary
                                                and questioned the wisdom of hiring ex-                 known issues prior to appointment (or                 qualifications screening but before
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                                                offenders who may then have access to                   after an appointment that is contingent               selection. A professional association
                                                employees’ personal information and to                  upon a favorable adjudication).                       recommended following an example
                                                sensitive taxpayer records. OPM                         Similarly, it does not impact the                     from state government, of conducting
                                                disagrees, noting that the proposed rule                integrity or thoroughness of the                      criminal history screening after an
                                                is not eliminating the need for, nor                    background investigation process. The                 interview as part of the final selection
                                                mitigating the thoroughness of,                         proposed rule only affects the point at               process. While all of these approaches
                                                background investigations and                           which an agency may collect                           have merit, OPM is not adopting them


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                                                86558            Federal Register / Vol. 81, No. 231 / Thursday, December 1, 2016 / Rules and Regulations

                                                at this time because assessment                         wishes to gain experience with the                    backgrounds early in the process (such
                                                instruments are not uniform across civil                regulation, and explore further the sorts             as law enforcement positions requiring
                                                service examinations. Some                              of situations agencies may bring to its               the eventual appointee to be in a
                                                examinations have an interview                          attention, before it limits its discretion            position to testify in legal proceedings).
                                                component while others do not; some                     to a list of specific conditions. Therefore           For these reasons OPM is retaining the
                                                employ multiple interviews. Permitting                  we prefer, at least for now, to provide               exception provision.
                                                criminal history screening at the time of               examples of the types of factors OPM                    The coalition commented that, in the
                                                a conditional offer provides a uniform                  will consider in determining whether to               event the exception provision is
                                                standard that is not dependent on the                   grant an exception.                                   retained in the final rule, OPM should
                                                specific instruments that are being used                   The same organization also suggested               place the burden of proof on agencies
                                                in a competitive examination to assess                  that the final rule include a provision               seeking exceptions, should adjudicate
                                                applicant competencies.                                 requiring agencies which are granted an               requests under a rigorous standard of
                                                                                                        exception to provide notice of the                    proof, and should give the public the
                                                Exception Based on Location or Type of                  exception in their job announcements                  opportunity to respond in opposition to
                                                Position                                                for positions for which the exception                 an agency’s request for exception. OPM
                                                   A professional organization                          was granted. OPM agrees that agencies                 does not adopt this suggestion.
                                                commented that the process by which                     which receive exceptions should                       Currently, there are no limitations on
                                                agencies may seek exceptions to collect                 provide notice of the exception in their              the point at which agencies may initiate
                                                information earlier in the process about                job announcements. Among other                        the collection of background
                                                applicants’ criminal or credit history (on              things, an agency that receives an                    information. The decision to impose the
                                                a case-by-case basis) could result in                   exception in order to use background                  restriction is a policy decision, not a
                                                additional delays. OPM will provide                     information as an aspect of assessing                 legal requirement. Accordingly, we do
                                                further guidance after the publication of               qualifications will, of necessity, need to            not believe that a uniform burden and
                                                this final rule, but notes that an agency               disclose the qualifications and how they              standard of proof or a public notice-and-
                                                will not have to wait until it has a                    will be assessed as part of the job                   comment process is necessary or would
                                                vacant position to request an exception.                opportunity announcement. We do not                   assist us in our decision-making
                                                If there is a position or group of                      believe a requirement in the final rule               process, and it would be likely to
                                                positions within the agency for which                   is necessary; OPM will require notice in              unnecessarily delay the hiring process.
                                                there is a legitimate need to collect                   its approval letters granting such                    The manner in which OPM grants
                                                information earlier in the process, the                 exceptions.                                           exceptions must be flexible.
                                                hiring agency may request an exception                     One commenter from an agency and
                                                at any time. Once an agency receives an                 one individual suggested that OPM, in                 Other Comments
                                                exception from OPM to collect                           the final rule, specifically exempt from                 One agency commented that asking
                                                background information from applicants                  these provisions positions with law                   applicants whether they have been fired
                                                for a particular position or group of                   enforcement and national security                     from a job, as is asked on the OF–306,
                                                positions earlier in the hiring process,                duties. We see no reason why an agency                in connection with competitive hiring is
                                                the agency will not be required to                      filling a position that is national                   a valid question and that restricting
                                                request an exception subsequently, or                   security sensitive cannot defer the                   employers from doing so before making
                                                each time, the position is being filled                 collection of background information                  a selection hinders the employer from
                                                thereafter.                                             until after a putative selection, based               fully evaluating applicants and choosing
                                                   Another professional organization                    upon relative degree of knowledge,                    the best candidate. Another agency
                                                suggested that OPM make clear in the                    skills, and abilities, has been made.                 commented that it needs to use the OF–
                                                final rule that exceptions from the                     Many agencies already do this.                        306 prior to a conditional offer of
                                                proposed changes must be requested                      Moreover, even as to law enforcement                  employment because it is not just a
                                                prior to the posting of any vacancy                     positions, OPM is not adopting this                   background screening form, but is also
                                                announcement to which it will apply.                    suggestion. Because specific duties and               used to collect important applicant
                                                Of course if an agency requests an                      agency requirements may differ, we                    information related to an applicant’s
                                                exception on the ground that it is                      prefer to rely on the mechanism for                   citizenship, Selective Service
                                                necessary to ask for certain background                 exceptions described in the proposed                  registration status, military service and
                                                information as an aspect of determining                 rule which allows agencies to request an              type of discharge, and relatives. This
                                                whether a particular applicant is                       exception for specific positions to                   information is needed to ensure that
                                                qualified for the position, then, the                   collect background information                        candidates meet legal requirements for
                                                agency, of necessity, would be required                 pertaining to an applicant’s criminal or              appointment in competitive hiring.
                                                to make that clear in advance of posting                adverse credit history earlier in the                 OPM agrees that inquiries into an
                                                the job opportunity announcement.                       hiring process.                                       applicant’s prior employment may have
                                                OPM agrees with this suggestion,                           A coalition representing criminal                  a bearing on his or her fitness for the job
                                                however, even when the exception is to                  justice reform groups and civil and                   and points out that the proposed rule
                                                be requested in order to enable the                     human rights advocates recommended                    does not restrict agencies from
                                                agency to adjudicate suitability in                     that OPM permit no exception allowing                 collecting information about an
                                                advance, and has amended proposed 5                     agencies to collect information about                 applicant’s prior employment prior to
                                                CFR part 330 subpart M accordingly.                     applicants’ criminal or adverse credit                making a selection. The context of the
                                                   This organization suggested OPM                      history prior to a conditional offer of               proposed rule is information of the sort
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                                                modify 5 CFR 330.1300 by including                      employment. OPM is not adopting this                  asked on the OF–306’s ‘Background
                                                specific conditions under which OPM                     suggestion. OPM leaves open the                       Information’ section specific to an
                                                may grant an exception to these                         possibility that for certain positions                applicant’s criminal or adverse credit
                                                provisions. OPM is not adopting this                    there may be valid, job and position-                 history. These provisions also do not
                                                suggestion. OPM is not yet in a position                related reasons why an agency may seek                prevent a hiring agency from collecting
                                                to anticipate all of the circumstances                  to disqualify applicants with significant             information about prior work history
                                                that could warrant an exception, and                    criminal or adverse credit history                    earlier in the hiring process. OPM has


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                                                                 Federal Register / Vol. 81, No. 231 / Thursday, December 1, 2016 / Rules and Regulations                                        86559

                                                amended the final rule to provide                       section 1(a)(xvii) formalizes OPM’s                   from the competitive service by Acts of
                                                greater clarity with respect to this issue.             membership; and section 2(a) directs                  Congress, hiring procedures and
                                                   OPM notes in this regard that agencies               that ‘‘Agencies making suitability                    standards for making qualification or
                                                are not required to sponsor or conduct                  determinations for Federal employment                 fitness determinations may be
                                                separate information collections subject                shall review their procedures for                     prescribed by statute. Where the statute
                                                to Office of Management and Budget                      evaluating an applicant’s criminal                    is silent, or where the exception from
                                                (OMB) clearance in order to ask these                   records to ensure compliance with 5                   the competitive service is made by the
                                                kinds of questions to applicants as part                CFR part 731 and any related, binding                 President (or by OPM under presidential
                                                of the competitive Civil Service hiring                 guidance issued by the Office of                      delegation), Civil Service Rule VI,
                                                process. Under OMB’s regulations                        Personnel Management, with the aim of                 § 6.3(b) states that ‘‘[t]o the extent
                                                implementing the Paperwork Reduction                    evaluating each individual’s character                permitted by law and the provisions of
                                                Act (PRA), ‘‘[e]xaminations designed to                 and conduct.’’ OPM expects that this                  this part, appointments and position
                                                test the aptitude, abilities, or knowledge              rule will assist agencies in complying                changes in the excepted service shall be
                                                of the persons tested and the collection                with the President’s mandate.                         made in accordance with such
                                                of information for identification or                       This organization also asked that                  regulations and practices as the head of
                                                classification in connection with such                  OPM amend its suitability regulations to              the agency concerned finds necessary.’’
                                                examinations’’ do not constitute                        require an agency to include a record of              See 5 CFR 6.3(b) (codifying this section
                                                information collections subject to the                  any exception granted by OPM,                         of the Rule). Agency heads have the
                                                PRA’s requirements. See 5 CFR                           permitting it to conduct suitability                  discretion to decide whether or not to
                                                1320.3(h)(7).                                           screening prior to a conditional offer of             establish criteria for making fitness
                                                   One individual asked whether the                     employment, as part of the ‘‘materials                determinations and determine whether
                                                proposed rule was ‘‘politically                         relied upon’’ in charging an individual.              their standards are equivalent to
                                                motivated’’ for an electoral purpose. It                OPM does not accept this                              suitability standards established by
                                                was not. The origins of the proposed                    recommendation, because the timing of                 OPM (but must consider OPM guidance
                                                rule began several years ago. OPM                       a suitability inquiry is unrelated to the             when exercising this discretion). See
                                                proposed this rule to better harmonize                  charges brought against an applicant,                 Section 3 of E.O. 13488 of January 16,
                                                the the requirements concerning the                     appointee, or employee in a proposed                  2009, 3 CFR, 2009 Comp., p. 189.
                                                timing and objectives of the merit                      suitability action.                                      The coalition notes, in support of its
                                                selection process and the suitability                      A coalition representing criminal                  comment, that under Civil Service Rule
                                                function.                                               justice reform groups and civil and                   VI, § 6.3(a), ‘‘OPM, in its discretion, may
                                                   One professional organization                        human rights advocates recommended                    by regulation prescribe conditions
                                                supports the proposal to include these                  that OPM implement a centralized                      under which excepted positions may be
                                                rules under 5 CFR part 731 to ensure                    means of collecting data on the impact                filled in the same manner as
                                                that any non-selections based on                        of the proposed rule by documenting                   competitive positions are filled and
                                                information from the OF–306 are                         the number of conditional offers and                  conditions under which persons so
                                                appealable to the Merit Systems                         final hiring decisions of persons with                appointed may acquire a competitive
                                                Protection Board (MSPB) under 5 CFR                     prior convictions. The coalition believes             status in accordance with the Civil
                                                part 731.501. It appears the commenter                  this data would help maintain the                     Service Rules and Regulations.’’ The
                                                may have misinterpreted the proposed                    integrity of the background check                     coalition cites this provision as ‘‘clear
                                                rule. Only suitability actions as defined               process and also help with oversight.                 authority’’ for OPM to impose identical
                                                in 5 CFR part 731.203 (cancellation of                  OPM is not adopting this suggestion as                hiring requirements on the excepted
                                                eligibility, removal, cancellation of                   part of the rulemaking but will oversee               service. However, the cited provision is
                                                reinstatement rights, and debarment) are                agencies’ compliance with the rule, as                not authority for OPM to override the
                                                appealable to the MSPB. Nonselection is                 part of the merit system audit and                    discretion given to agencies in filling
                                                not appealable, as stated in 5 CFR                      compliance process under Civil Service                positions in the excepted service.
                                                302.406(g) and 731.203(b).                              Rules V and X.                                        Rather, it is a mechanism for OPM to
                                                   The same organization recommended                       The coalition also suggested the                   permit agencies to hire for the excepted
                                                that OPM codify in the final rules the                  proposed rules should apply to                        service in the same manner as for the
                                                mitigating factors described in section                 positions filled in the excepted service.             competitive service and upon doing so,
                                                2(b)(i–iii) of the Presidential                         OPM notes these provisions do apply to                to give competitive status (i.e., the
                                                memorandum titled, ‘‘Promoting                          certain positions in the excepted                     ability to be noncompetitively assigned
                                                Rehabilitation and Reintegration of                     service. OPM is not accepting this                    to positions in the competitive service)
                                                Formerly Incarcerated Individuals’’ (81                 recommendation as to all excepted                     to excepted service employees who have
                                                FR 26993, 26995). OPM is not adopting                   service positions, but notes that under               been hired in that manner. See 5 CFR
                                                this suggestion because these criteria                  the current suitability regulations at 5              212.301, 302.102(c).
                                                pertain to occupational licensure, not to               CFR 731.101(b), the definition of                        The coalition suggested that OPM
                                                whether an individual is suitable for                   ‘‘Covered Position’’ includes a small                 include language in the final rule that
                                                Federal employment. The purpose of                      subset of excepted service positions                  requires agencies to comply with title
                                                the proposed rule is to affect at what                  within OPM’s jurisdiction, namely                     VII of the Civil Rights Act of 1964, and
                                                point in the hiring process an agency                   positions in the excepted service                     Equal Employment Opportunity
                                                may make inquiries into an applicant’s                  ‘‘where the incumbent can be                          Commission (EEOC) guidelines
                                                background, not to impact the criteria                  noncompetitively converted to the                     pertaining to the use of conviction
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                                                used to determine an applicant’s                        competitive service. . . .’’                          records in hiring decisions, including an
                                                suitability for employment. However,                       For other positions in the excepted                individualized assessment of applicants’
                                                we note that separate sections of this                  service, OPM generally lacks the                      criminal history. OPM is not adopting
                                                Memorandum are relevant to this rule.                   authority to prescribe qualification,                 this suggestion because these rules only
                                                Section 1 formally reconstitutes the                    fitness, or suitability standards or to               pertain to the timing of inquiries into an
                                                Federal Interagency Reentry Council as                  regulate the timing of employer                       applicant’s criminal or adverse credit
                                                a Presidentially-established Council;                   inquiries. For those positions excepted               history, not to the selection process for


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                                                86560            Federal Register / Vol. 81, No. 231 / Thursday, December 1, 2016 / Rules and Regulations

                                                Federal employment, and agencies have                   rulemaking, and is speculative, so there              Regulatory Flexibility Act
                                                an independent obligation to comply                     is no basis for OPM to consider the                      I certify that these regulations will not
                                                with title VII.                                         comment.                                              have a significant economic impact on
                                                Changes to the OF–306                                      A coalition representing criminal                  a substantial number of small entities
                                                                                                        justice reform groups and civil and                   because the regulations pertain only to
                                                  One agency and a coalition
                                                                                                        human rights advocates recommended                    Federal agencies and employees.
                                                representing criminal justice reform
                                                                                                        that OPM also extend these rules to its
                                                groups and civil and human rights                                                                             E.O. 13132, Federalism
                                                                                                        contractors. OPM cannot adopt this
                                                advocates suggested OPM also make                                                                                This regulation will not have
                                                                                                        suggestion as part of the rulemaking,
                                                changes to the OF–306 to facilitate the                                                                       substantial direct effects on the States,
                                                                                                        which pertains only to competitive
                                                rule’s implementation. OPM is not                                                                             on the relationship between the
                                                                                                        Federal hiring, not contracting.
                                                addressing these comments at this time                                                                        National Government and the States, or
                                                because the OF–306 and other                               One individual asked whether there is
                                                                                                        evidence that ‘‘many’’ agencies                       on distribution of power and
                                                investigative questionnaires are not                                                                          responsibilities among the various
                                                promulgated through rulemaking, but                     administer the Optional Form (OF) 306,
                                                                                                        ‘‘Declaration for Federal Employment’’                levels of government. Therefore, in
                                                through the separate PRA process. The                                                                         accordance with Executive Order 13132,
                                                comments may be resubmitted when the                    prior to the point at which a tentative
                                                                                                        job offer is made. OPM stated in the                  it is determined that this rule does not
                                                information collections are up for
                                                                                                        Supplementary Information section of                  have sufficient federalism implications
                                                renewal under the PRA.
                                                                                                        the proposed rule that to the contrary                to warrant preparation of a Federalism
                                                  One individual suggested that OPM
                                                remove the requirement to provide a                     ‘‘many agencies already . . . wait until              Assessment.
                                                Social Security number (SSN) on the                     the later stages of the hiring process to             E.O. 12988, Civil Justice Reform
                                                OF–306. OPM is not adopting this                        collect this kind of information.’’ (81 FR              This regulation meets the applicable
                                                suggestion because it is beyond the                     at 26173.) This assertion is based upon               standard set forth in section 3(a) and
                                                scope of the proposed rule, which                       the results of a survey we conducted on               (b)(2) of Executive Order 12988.
                                                pertains to when during the hiring                      this matter. This survey was developed
                                                process an agency may collect                           and issued to all Chief Human Capital                 Unfunded Mandates Reform Act of
                                                information about an applicant’s                        Officers Act agencies. Eighteen (18)                  1995
                                                criminal or adverse credit history.                     agencies/sub-agencies responded to the                  This rule will not result in the
                                                                                                        survey. The comment was not                           expenditure by State, local or tribal
                                                Comments Outside the Scope of the
                                                                                                        accompanied by a recommendation                       governments of more than $100 million
                                                Proposed Rule
                                                                                                        related to the rulemaking, so there is no             annually. Thus, no written assessment
                                                   A private company commented that                     basis to consider the comment.                        of unfunded mandates is required.
                                                the proposed rule will inadvertently                       Two commenters opposed the
                                                deter private sector employers from                                                                           Congressional Review Act
                                                                                                        proposed rule in the mistaken belief that
                                                taking advantage of the Work                            the rule’s purpose was to improve                        This action pertains to agency
                                                Opportunity Tax Credit (WOTC), which                    employment opportunities for                          management, personnel and
                                                is designed to encourage private                        individuals who had become criminals                  organization and does not substantially
                                                employers to hire people with criminal                  ‘‘through no fault of their own.’’ The                affect the rights or obligations of non-
                                                histories, among others. This company                   commenters were apparently confused                   agency parties and, accordingly, is not
                                                requests that OPM clarify in the final                  by a citation, in the proposed rule’s                 a ‘‘rule’’ as that term is used by the
                                                rule that private employers can use the                 Supplementary Information (81 FR at                   Congressional Review Act (Subtitle E of
                                                WOTC credit without violating these                     26174), to a Presidential Memorandum,                 the Small Business Regulatory
                                                provisions. This comment is beyond the                  ‘‘Enhancing Safeguards to Prevent the                 Enforcement Fairness Act of 1996
                                                scope of the proposed regulations,                      Undue Denial of Federal Employment                    (SBREFA)). Therefore, the reporting
                                                which only pertain to Federal                           Opportunities to the Unemployed and                   requirement of 5 U.S.C. 801 does not
                                                employment. OPM suggests private                        Those Facing Financial Difficulty                     apply.
                                                companies consult the Internal Revenue                  Through No Fault of Their Own (79 FR
                                                Service for information concerning the                                                                        Paperwork Reduction Act of 1995 (44
                                                                                                        7045). OPM cited the memorandum as                    U.S.C. Chapter 35)
                                                WOTC.                                                   a basis to defer the collection of certain
                                                   The same company suggested that                                                                              This final regulatory action will not
                                                                                                        applicant employment or credit
                                                OPM make clear in the final rule that                                                                         impose any additional reporting or
                                                                                                        information until the later stages of the
                                                these provisions only pertain to Federal                                                                      recordkeeping requirements under the
                                                                                                        hiring process, not for the reasons the
                                                employment. OPM is not adopting this                                                                          Paperwork Reduction Act.
                                                                                                        commenters suggested. Because the
                                                suggestion because we do not believe
                                                                                                        comments were based on a faulty                       List of Subjects
                                                such clarification is necessary. By
                                                                                                        premise, OPM did not consider them.
                                                statute and under the Civil Service                                                                           5 CFR Part 330
                                                Rules, OPM’s jurisdiction in these                         One commenter asked that OPM
                                                                                                        revise the proposed rule to improve the                 Armed forces reserves, District of
                                                matters is limited to Federal                                                                                 Columbia, Government employees.
                                                employment.                                             formula for cost-of-living allowances for
                                                   One organization similarly expressed                 annuities. The comment was outside the                5 CFR Part 731
                                                concern that the proposed rule may                      scope of the proposal and was not                       Administrative practices and
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                                                persuade state and local governments to                 considered.                                           procedures, Government employees.
                                                enact regulatory or contractual measures                Executive Order 13563 and Executive                   U.S. Office of Personnel Management
                                                which, in turn, impose burdensome                       Order 12866, Regulatory Review
                                                requirements on private investigative                                                                         Beth F. Cobert,
                                                and security firms. The comment is not                    The Office of Management and Budget                 Acting Director.
                                                accompanied by a specific                               has reviewed this rule in accordance                    Accordingly, OPM is amending 5 CFR
                                                recommendation related to the                           with E.O. 13563 and 12866.                            parts 330 and 731 as follows:


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                                                                 Federal Register / Vol. 81, No. 231 / Thursday, December 1, 2016 / Rules and Regulations                                            86561

                                                PART 330—RECRUITMENT,                                   OPM may also consider positions for                   appointment, and OPM will take a
                                                SELECTION, AND PLACEMENT                                which the expense of completing the                   suitability action where warranted.
                                                (GENERAL)                                               examination makes it appropriate to                   *     *     *     *   *
                                                                                                        adjudicate suitability at the outset of the           [FR Doc. 2016–28782 Filed 11–30–16; 8:45 am]
                                                ■ 1. The authority citation for part 330                process (e.g., a position that requires               BILLING CODE 6325–39–P
                                                continues to read as follows:                           that an applicant complete a rigorous
                                                  Authority: 5 U.S.C. 1104, 1302, 3301, 3302,           training regimen and pass an
                                                3304, and 3330; E.O. 10577, 3 CFR, 1954–58              examination based upon the training                   OFFICE OF PERSONNEL
                                                Comp., p. 218; Section 330.103 also issued              before his or her selection can be                    MANAGEMENT
                                                under 5 U.S.C. 3327; Subpart B also issued
                                                under 5 U.S.C. 3315 and 8151; Section
                                                                                                        finalized). A hiring agency must request
                                                                                                        and receive an OPM-approved                           5 CFR Part 532
                                                330.401 also issued under 5 U.S.C. 3310;
                                                Subparts F and G also issued under                      exception prior to issuing public notice              RIN 3206–AN38
                                                Presidential Memorandum on Career                       for a position for which the agency will
                                                Transition Assistance for Federal Employees,            collect background information prior to               Prevailing Rate Systems; Redefinition
                                                September 12, 1995; Subpart G also issued               completion of the assessment process                  of Certain Appropriated Fund Federal
                                                under 5 U.S.C. 8337(h) and 8456(b).                                                                           Wage System Wage Areas
                                                                                                        and the making of a conditional offer of
                                                ■ 2. Add subpart M, consisting of                       employment.
                                                § 330.1300 to read as follows:                                                                                AGENCY:  U.S. Office of Personnel
                                                                                                                                                              Management.
                                                                                                        PART 731—SUITABILITY
                                                Subpart M—Timing of Background                                                                                ACTION: Final rule.
                                                Investigations
                                                                                                        ■ 3. The authority citation for part 731              SUMMARY:   The U.S. Office of Personnel
                                                § 330.1300 Timing of suitability inquiries in           continues to read as follows:                         Management (OPM) is issuing a final
                                                competitive hiring.                                                                                           rule to redefine the geographic
                                                                                                          Authority: 5 U.S.C. 1302, 3301, 7301; E.O.
                                                   A hiring agency may not make                         10577, 3 CFR 1954–1958 Comp., p. 218, as              boundaries of several appropriated fund
                                                specific inquiries concerning an                        amended; E.O. 13467, 3 CFR 2009 Comp., p.             Federal Wage System (FWS) wage areas
                                                applicant’s criminal or credit                          198; E.O. 13488, 3 CFR 2010 Comp., p. 189;            for pay-setting purposes. Based on
                                                background of the sort asked on the OF–                 5 CFR parts 1, 2 and 5.                               reviews of Metropolitan Statistical Area
                                                306 or other forms used to conduct                                                                            (MSA) boundaries in a number of wage
                                                suitability investigations for Federal                  ■ 4. In § 731.103, revise paragraph (d) to            areas, OPM is redefining the following
                                                employment (i.e., inquiries into an                     read as follows:                                      wage areas: Salinas-Monterey, CA; San
                                                applicant’s criminal or adverse credit                                                                        Francisco, CA; New London, CT;
                                                                                                        § 731.103    Delegation to agencies.
                                                history) unless the hiring agency has                                                                         Central and Western Massachusetts;
                                                made a conditional offer of employment                  *      *    *     *     *
                                                                                                                                                              Cincinnati, OH: Dayton, OH,
                                                to the applicant. Agencies may make                        (d)(1) A hiring agency may not make                Southeastern Washington-Eastern
                                                inquiries into an applicant’s Selective                 specific inquiries concerning an                      Oregon; and Spokane, WA.
                                                Service registration, military service,                 applicant’s criminal or credit                        DATES: Effective date: This regulation is
                                                citizenship status, or previous work                    background of the sort asked on the OF–               effective on December 1, 2016.
                                                history, prior to making a conditional                  306 or other forms used to conduct                       Applicability date: This change
                                                offer of employment to an applicant.                    suitability investigations for Federal
                                                   However, in certain situations,                                                                            applies on the first day of the first
                                                                                                        employment (i.e., inquiries into an                   applicable pay period beginning on or
                                                agencies may have a business need to                    applicant’s criminal or adverse credit
                                                obtain information about the                                                                                  after January 3, 2017.
                                                                                                        history) unless the hiring agency has                 FOR FURTHER INFORMATION CONTACT:
                                                background of applicants earlier in the                 made a conditional offer of employment
                                                hiring process to determine if they meet                                                                      Madeline Gonzalez, by telephone at
                                                                                                        to the applicant. Agencies may make                   (202) 606–2858 or by email at pay-leave-
                                                the qualifications requirements or are
                                                                                                        inquiries into an applicant’s Selective               policy@opm.gov.
                                                suitable for the position being filled. If
                                                                                                        Service registration, military service,
                                                so, agencies must request an exception                                                                        SUPPLEMENTARY INFORMATION: On June
                                                                                                        citizenship status, or previous work
                                                from the Office of Personnel                                                                                  24, 2016, OPM issued a proposed rule
                                                                                                        history, prior to making a conditional
                                                Management in order to determine an                                                                           (81 FR 41255) to redefine the following
                                                                                                        offer of employment to an applicant.
                                                applicant’s ability to meet qualifications                                                                    counties:
                                                                                                        However, in certain situations, agencies
                                                or suitability for Federal employment                                                                            • San Benito County, CA, from the
                                                                                                        may have a business need to obtain
                                                prior to making a conditional offer of                                                                        Salinas-Monterey, CA, area of
                                                                                                        information about the suitability or
                                                employment to the applicant(s). OPM                                                                           application to the San Francisco, CA,
                                                                                                        background of applicants earlier in the
                                                will grant exceptions only when the                                                                           area of application;
                                                agency demonstrates specific job-related                process. If so, agencies must request an                 • Windham County, CT, from the
                                                reasons why the agency needs to                         exception from the Office of Personnel                New London, CT, area of application to
                                                evaluate an applicant’s criminal or                     Management, in accordance with the                    the Central and Western Massachusetts
                                                adverse credit history earlier in the                   provisions of 5 CFR part 330 subpart M.               area of application;
                                                process or consider the disqualification                   (2) OPM reserves the right to                         • Union County, IN; from the Dayton,
                                                of candidates with criminal                             undertake a determination of suitability              OH, area of application to the
                                                backgrounds or other conduct issues                     based upon evidence of falsification or               Cincinnati, OH, area of application;
jstallworth on DSK7TPTVN1PROD with RULES




                                                from particular types of positions. OPM                 fraud relating to an examination or                      • Columbia County, WA, from the
                                                will consider such factors as, but not                  appointment at any point when                         Spokane area of application to the
                                                limited to, the nature of the position                  information giving rise to such a charge              Southeastern Washington-Eastern
                                                being filled and whether a clean                        is discovered. OPM must be informed in                Oregon area of application.
                                                criminal history record would be                        all cases where there is evidence of                     The Federal Prevailing Rate Advisory
                                                essential to the ability to perform one of              material, intentional false statements, or            Committee, the national labor-
                                                the duties of the position effectively.                 deception or fraud in examination or                  management committee responsible for


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Document Created: 2018-02-14 09:00:47
Document Modified: 2018-02-14 09:00:47
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesEffective date: This final rule is effective January 3, 2017.
ContactMr. Mike Gilmore by telephone on (202) 606-2429, by fax at (202) 606-4430, by TTY at (202) 418-3134, or by email at [email protected]
FR Citation81 FR 86555 
RIN Number3206-AN25
CFR Citation5 CFR 330
5 CFR 731
CFR AssociatedArmed Forces Reserves; District of Columbia; Government Employees and Administrative Practices and Procedures

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