There has been increasing focus on the use of credit checks of job applicants by employers. In February, theÂ Associated Press reported that Nebraska is considering legislation to ban these pre-employment credit checks:Â LB113, an relating to the Nebraska Fair Employment Practice Act, andÂ LB530, the Employee Credit Privacy Act.Â The District of ColumbiaÂ is considering legislationÂ that would restrict the use of credit checks by employers. Illinois and Oregon have passed similar laws. In March, the Oregon governor signed a law that protects job applicantsâ€™ privacy when it comes to their credit reports. In August, Illinois Gov. Quinn signedÂ House Bill 4658 (pdf), which creates the Employee Credit Privacy Act.Â The law bans employers from checking the credit of job applicants, with some exceptions.
Now, USA Today takes a look at the issue:
Battle lines are being drawn in state capitals over whether workers should be judged by their creditworthiness. n 25 states, 49 proposed bills are being debated. The majority of the bills are aimed at restricting when credit histories can be used in the hiring process, says Heather Morton, analyst at the National Conference of State Legislatures. […]
There is also concern about fairness, says Beth Givens, director of the non-profit advocacy group Privacy Rights Clearinghouse.
â€œUsing a credit report to make a hiring decision is essentially making a value judgment,â€ says Givens. â€œThe employer is saying, â€˜I think youâ€™re an irresponsible and careless person because you have a bad credit report.â€™â€ […]
Privacy and civil rights advocates say employers are unfairly using credit histories to weed out the down and out, especially people of color.
In California, the foreclosure crisis has combined with a 12.4% unemployment rate to erode the credit status of millions of state residents, says Tony Mendoza, state Assembly member who is sponsoring Californiaâ€™s bill. Yet, 60% of U.S. employers conduct credit checks on job applicants, according to the Society for Human Resource Management (SHRM).
In one example, a Los Angeles African-American woman lost her administrative assistant job after her medical bills and debt piled up while she was ill, says Mendoza. When the womanâ€™s health returned, she found employers looking to fill office, service and labor jobs using her credit history to gauge her trustworthiness. […]
Giant credit bureaus Experian and Trans-Union also oppose the bills. Employers want to know whether a job applicant â€œacted prudently while (previously) employed,â€ says TransUnion spokeswoman Colleen Tunney-Ryan. â€œA pre-employment (credit) report is one tool that helps them assess that.â€