Some States Putting Restrictions on Employer's Use of Credit Reports

As of January 1, 2012, California will join  six other states in
limiting the use of a consumer credit report for employment  purposes.
Washington, Oregon, Hawaii, Illinois, Maryland, and Connecticut have  all
enacted legislation restricting employers’ use of credit reports. Similar
  legislation is pending in several other states.
 

Employers in California  may only use a consumer credit report for emploment pruposes if the report is 
sought for one of the following:

1. A managerial position
2. A position in the state Department of Justice
3. A sworn peace  officer or other law enforcement
4. A position for which the information  contained in the report is required by law to be disclosed or obtained
5. A  position that involves regular access to confidential information such as credit  card account information, Social Security number, or date of birth
6.A  position which the perosn can enter into financial transactions on behalf of the  company
7. A position that involves access to confidential or proprietary  information; or
8. A position that involves regular access to cash totaling ten thousand dollars ($10,000) or more of the employer, a customer, or client,  during workday

If an employer  procures a consumer report for one of the limited exceptions outlined in the  statute, it must provide the person for whom the credit report is sought with  written notice informing him or her that a report will be requested, the specific reasons for obtaining the report as provided in the statute, and a check box allowing the applicant to request a copy of the credit report at no charge.

Accordingly, employers who use credit information as part of employment screening or other 
hiring purposes should evaluate their policies in light of the recent momentum against using such information in employment decisions.

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