Tag Archives: credit reports

Several US States Now have Laws Regulating Use of Credit Reports for Employment Purposes

A number of U.S. states have either passed, or are considering passing, laws regulating credit reports used by employers for employment purposes. Most recently, California Governor Jerry Brown signed Assembly Bill 22 into law that prohibits employers or prospective employers in California, with the exception of certain financial institutions, from obtaining consumer credit reports for employment purposes beginning on January 1, 2012. Here is a summary of the seven states – California, Connecticut, Hawaii, Illinois, Maryland, Oregon, and Washington – that currently have laws regulating credit report use by employers. Continue reading

Civil Rights and Labor Groups Seek to End Credit Checks of Job Applicants by Employers

According to a report from HuffingtonPost.com, a coalition of 25 civil rights and labor advocacy groups recently petitioned TransUnion – one of the largest credit-monitoring firms in the United States along with Equifax and Experian and the only privately-held company of the so-called ‘Big Three’ – to stop making credit reports available and selling consumer credit information to employers to use for credit checks of job applicants during the hiring process. Continue reading

California Passes AB 22 Placing Restrictions on Use of Credit Checks by Employers

Effective January 1, 2012, employers or prospective employers in California – with the exception of certain financial institutions – will be prohibited from obtaining consumer credit reports to use in the hiring and promotion process after Governor Jerry Brown recently signed into law Assembly Bill 22 (AB 22) that restricts usage of consumer credit reports for employment purposes. California now joins Connecticut, Hawaii, Illinois, Maryland, Oregon, and Washington as U.S. states that currently limit the use of credit checks by employers. To read AB 22, visit: http://leginfo.ca.gov/pub/11-12/bill/asm/ab_0001-0050/ab_22_bill_20110920_enrolled.pdf. Continue reading

Governor Brown Signs Two Bills Impacting Use of Credit Reports and E-Verify by Employers in California

Over the weekend, California Governor Jerry Brown signed two Assembly Bills – ‘AB 22’ and ‘AB 1236’ – that will impact the way employers in the state conduct credit report checks on job applicants and use the federal E-Verify employment eligibility verification system to check the work authorization status of newly hired employees. AB 22 prohibits most employers or prospective employers from obtaining consumer credit reports for employment purposes while AB 1236, the Employment Acceleration Act of 2011, prevents state and local governments from requiring California businesses to use E-Verify to check if newly hired workers are legally eligible to work in the United States. The new laws take effect January 1, 2012. Continue reading

California Bill AB 22 Prohibiting Credit Checks for Employment Purposes Heads to Governor Brown to Sign

The final version of California Assembly Bill No. 22 (AB 22) that limits credit checks of job applicants by most employers is headed to Governor Jerry Brown’s office for his signature. The bill – which many believe will be signed into law by the Governor – would prohibit most employers or prospective employers, with the exception of certain financial institutions, from obtaining consumer credit reports for employment purposes. If passed, California would join Connecticut, Hawaii, Illinois, Maryland, Oregon, and Washington as the U.S. states that currently restrict the use of credit checks by most employers for employment decisions (Update: Governor Brown Signs Two Bills Impacting Use of Credit Reports and E-Verify by Employers in California).

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New Connecticut Law Restricts Use of Credit Reports in Employment and Hiring Decisions Effective October 1

Effective October 1, 2011, a new law in Connecticut – Senate Bill No. 361 (S.B. 361) – signed by Governor Dannel Malloy will prohibit certain employers from using credit reports in making hiring and employment decisions regarding existing employees or job applicants. The law applies to all employers in Connecticut with at least one employee. Connecticut is one of six U.S. states – joining Hawaii, Illinois, Maryland, Oregon, and Washington – that currently prohibit the use of credit history in employment decisions.

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Using Criminal Records and Credit Reports for Screening

What are the practical and legal considerations for employers that use criminal records and credit reports for applicant selection? This is the fifth and final installment of the Employment Screening Resources (ESR) Background Check Trends of 2011 Review features the number two trend, using criminal records, and the number one top ranked background check trend of the year, the use of job applicant credit reports. To view previous installments of the 2011 ESR Background Check Trends Review, visit Part 1, Part 2, Part 3, and Part 4.

  • Number 2 ESR Background Check Trend for 2011: Questions about Criminal Records of Job Applicants Become More Difficult for Employers to Ask.
  • Number 1 ESR Background Check Trend for 2011: Controversy over Whether Employers Using Credit Reports for Employment Screening is Discriminatory Increases.

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California Bill Eliminating Credit Checks by Employers during Hiring Process Passes State Assembly and Heads to Senate

A bill in California – AB 22 – sponsored by Assemblymember Tony Mendoza (D-56th District) that would ban the use of credit report background checks by employers during the hiring process has passed in the State Assembly with a vote of 45 to 29 and now heads to the Senate Labor and Industrial Relations Committee. Mendoza’s earlier attempts at similar legislation in the past – AB 482 (2010) and AB 943 (2009) – were both vetoed by former Governor Arnold Schwarzenegger. Continue reading

Job Applicants Need to Learn about Credit Report Checks for Employment Screening when Looking for Work

Since a 2010 survey released by the Society for Human Resource Management (SHRM) – ‘Background Checking: Conducting Credit Background Checks’ – found that 13 percent of the companies surveyed checked the credit reports of all job candidates while 47 percent checked the credit reports of some job candidates, many job seekers looking for work are wondering if their bad credit will affect the outcome of their job search. These jobs seekers need to know that there are limits to what employers can see in employment-related credit checks and how they can use that credit information, according to the article ‘Can Bad Credit Ruin Your Job Search?’ by Susan Johnston on Bankrate.com. Continue reading

Maryland Latest US State to Place Restrictions on Use of Credit Checks by Employers

Joining four other U.S. states – Hawaii, Illinois, Oregon, and Washington – prohibiting the use of credit information by employers, Maryland has enacted new legislation placing restrictions on so-called credit checks by employers that use the credit report or credit history of job applicants or employees for employment decisions. The law, known as the ‘Job Applicant Fairness Act,’ was signed by Maryland Governor Martin O’Malley in April of 2011 and will take effect on October 1, 2011. Continue reading