Two new laws change the background screening business in California

Posted by Kristina Taylor
December 27, 2011

Two new laws change the background screening business in California

If you are an employer in California or you do business in that state, you should be aware of two new laws taking effect on Jan. 1 that might change your pre-employment screening practices.

The first change, thanks to California Assembly Bill 22, is that it will be against the law for most employers and prospective employers in California from obtaining credit reports for employment purposes. Exceptions to this rule include financial institutions and those hiring for certain positions, such as managers, those in law enforcement, and positions that require access to personal information or financial information.

The other change is due to California Senate Bill 909, which appears to be the first law in the nation that addresses the issue of consumers’ personal information that is collected during background checks for employment purposes being sent “offshore” and outside the United States or its territories beyond the protection of U.S. privacy laws.

SB 909 amends the California Investigative Consumer Reporting Agencies Act (ICRA) that regulates background checks in California and requires a new disclosure and additions to a Consumer Reporting Agency’s privacy policy to be made to consumers before their personal information is sent outside of the United States. It does not regulate or prohibit the sending of personal information outside the U.S., but it requires that consumers be told of the background screening agency’s privacy practices, including whether the consumer’s personal information will be sent outside the country.

If these new regulations will be affecting your business or the way you conduct employment screening, now is the time to read up on the changes and make sure your company, and the pre-employment screening service you hire, remains in compliance with the law.

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