By Thomas Ahearn, ESR News Blog
The Equal Employment Opportunity Commission (EEOC) has announced it will hold a meeting Wednesday, October 20, 2010 to hear testimony about employer use of credit reports as a background screening tool and to investigate the practice of using credit histories as employment screening devices.
According to various news releases and news reports, some of the testimony aims to clear up some common misperceptions about the use of employment credit reports by employers, including a common misperception that employment credit reports include a credit score.
The House Financial Services Committee conducted a hearing in September to discuss the Equal Employment for All Act (H.R. 3149), a bill aimed at severely limiting the use of credit checks on employees that would amend the Fair Credit Reporting Act (FCRA) to make it unlawful to discriminate against job applicants based on consumer credit reports. The Equal Employment for All Act would make it unlawful to base adverse-employment decisions against job applicants and current employees on consumer credit reports.
The EEOC last held a meeting on credit checks in 2007. No action was taken. The meeting on Wednesday, October 20, 2010 will be held at 9:30 A.M. Eastern Time in the Commission Meeting Room on the First Floor of the EEOC Office Building, 131 “M” Street, NE, Washington, D.C.
The Employment Screening Resources (ESR) News Blog has several previous posts dealing with the issue of employers using employment credit reports during background screening. As reported before on the ESR News Blog, several states have already passed laws restricting the use of credit checks in hiring:
- New Illinois Law Prohibits Pre-Employment Credit Checks on Most Job Applicants
- Oregon Issues New Rules on Use of Credit History for Employment Decisions
- Federal Bill Seeks To Ban Credit Report Checks for Most Employment Screening
- ESR News Blog posts tagged ‘Credit Reports’
ESR has long taken the position that employers should proceed with caution with using applicant and employee credit histories in the background screening process and not use employment credit reports unless they can clearly articulate a business justification, which normally means that that the job applicants or current employees have or will hold “sensitive” positions in which they may handle money or have access to personal data.
ESR also co-authorized a white paper with LexisNexis, “The Use of Credit Reports
in Employment Background Screening – An Overview for Job Applicants,” on the protections applicants have when it comes to credit reports and the fact that credit reports do not contain credit scores. To read the white paper, visit: http://www.napbs.com/files/public/Consumer_Education/Credit_Reports_for_Background_Screening.pdf
For more information about background checks, visit Employment Screening Resources (ESR) at http://www.ESRcheck.com.