A State House committee in Colorado has voted to defeat legislation – SB-3, The ‘Employment Opportunity Act’ – that would have restricted the use of credit report checks of job applicants by employers for employment screening, The Denver Post reports, and the vote against SB-3 “ran along party lines with six Republicans voting against five Democrats on the committee.” The full Post story is at: http://www.denverpost.com/breakingnews/ci_20208956/house-panel-kills-bill-stop-credit-check-job. Sponsored by Senator Morgan Carroll (D-Aurora), SB-3 originally aimed to limit the use of credit report checks in employment screening to jobs “such as financial positions that handle a lot of money or those workers in a position of trust over the elderly or vulnerable,” the Post reports, but ended up “taking on every form of employment.” If SB-3 had passed into law, Colorado would have become the eighth U.S. state to restrict credit report checks for employment purposes. As previously reported on the ESR News Blog, credit report checks of job applicants by employers has become increasingly regulated by state laws. In recent years, several U.S. states have passed laws restricting the use of credit report checks that have impacted the way employers conduct background checks. Seven U.S. states – California, Connecticut, Hawaii, Illinois, Maryland, Oregon, and Washington – currently have laws that limit the use of credit report checks by employers for employment purposes. Employment Screening Resources (ESR), a nationwide background check firm accredited by the National Association of Professional Background Screeners (NAPBS), offered the following tips for employers considering the use of credit report checks:
- Employers should not use credit checks unless there is a clear business justification related to the job in question.
- Employers should remember some credit reports contain errors and may contain incomplete information.
- Employers should use extreme caution with credit reports and be aware of both federal and state laws regarding credit report checks.
- Despite beliefs to the contrary, both employers and jobseekers should realize that employment credit reports do not contain three digit credit scores such as FICO.