It's simply common sense - if you're going to hire someone, you should pay them the same amount, within reason, as any other qualified person on your team.

"There's increased risk - real and/or perceived - involved in hiring someone who has had difficulty staying within the confines of the law."

This is the same argument banks make when they jack some single mother's interest rate to 39% when she misses a payment on her credit card. It has nothing to do with risk, and everything to do with seizing an opportunity to take advantage of someone.

If you're going to help someone return to society, then you ought to pay them in the same range as everyone else on your team. That - is just good business.