Assembly passes bill to ban credit checking by employers

By CMTA Staff

Capitol Update, May 27, 2011 Share this on FacebookTweet thisEmail this to a friend

Last week, the Assembly passed, with only democrat party support, AB 22 (Tony Mendoza, D-Artesia) that would prohibit employers from running credit checks on potential employees.  The bill would not apply to individuals applying for positions in the financial services industry or select public safety related jobs.

According to bill proponents, an individual’s work ethic and reliability cannot be determined solely by a credit check since poor credit does not always equal an irresponsible employee.  Opponents argue, however, that credit check information provides employers with valuable insight to an applicant’s work ethic and may help reduce future work related litigation.  Consumer credit reports provide important insight into one aspect of a potential employee’s responsibility, such as the verification of an applicant’s employment history.

CMTA believes that job applicants are already effectively protected by current law which allows for the procurement and use of these reports under the following conditions:

  • Prior to requesting a consumer credit report, an employer must provide a written notice stating the source of the information and how it will be used.
  • Provide a copy of the consumer credit report to the consumer, if desired.
  • If an adverse employment action is taken against a person due to the information contained in a consumer credit report, the user must provide the name and contact information for the reporting agency to the consumer.

The bill will now go to the Senate for consideration by its policy committee.

 

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