Credit Report Checks Causing California Conundrum

Posted by Kristina Taylor
September 26, 2009

Credit Report Checks Causing California Conundrum

There was a recent article from in Los Angeles that really brought to the forefront the fact that credit report checks are beginning to cause a stir between potential employees and employers.

In the story, the author emphasized one woman’s case (which admittedly was a sad situation) where a serious amount of debt from medical bills was ostensibly* keeping her from being hired.  Basically, she felt that when employers saw that she owed a great deal, they became gun shy. 

(*The word “ostensibly” is used here because the story didn’t give equal time to the people for whom she applied or worked on a temporary basis.  Perhaps they had other reasons for not offering her full-time employment.  We’ll probably never know.)

As a political response to cases such as the one aforementioned, some California lawmakers are attempting to introduce new laws to limit how employers can use credit report checks in their hiring processes. 

As the article notes:

Under a bill proposed by Assemblyman Tony Mendoza, employers could check the credit of applicants only for law enforcement and managerial slots – as well as positions that handle large amounts of cash, jewelry or valuables, or deal with sensitive financial information.

Of course, corporations aren’t taking this lying down, as evidenced by this paragraph:

Business lobbyist groups that oppose the bill have argued that pre-employment credit checks – currently legal in California when job applicants give consent – can help weed out financially irresponsible potential employees by uncovering liens and bankruptcies.

There’s no telling which way this bill will go, but it’s clearly going to have an impact if and when it’s passed.  And that impact will be felt on both sides of the coin.