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August 11, 2009

Credit Checks in Limbo?

Filed under: General HR Buzz,Hiring & Jobs7:16 am

 

According to SHRM, approximately 40% of employers use credit checks as part of the background check process.  Although the checks are often conducted on candidates who will be handling money, many employers use credit checks to gauge a prospective employee’s reliability and responsibility.

Joseph Nai of West Springfield, MA, doesn’t think the practice is fair. “I don’t think it’s right, I think your credit shouldn’t have anything to do about going out and getting a job. Some people fall into hard times and their credit goes bad, does that mean they don’t deserve a job?”

Some states agree with Joseph:

  • New York State requires that any background check be directly related to the job being sought.
  • Legislators in Ohio and Michigan — a state especially hard-hit by unemployment — are weighing bills that bar credit checks altogether from being used as a basis for hiring.
  • In July, Hawaii approved a measure that allows employers in that state to review a credit history only after making an offer and requires the credit check to be “directly related” to job qualifications.
  • Similarly, in Washington State, there’s been a law on the books since 2007 that mandates credit checks can be done and used only when they are “substantially related” to the job.

The house is currently considering a bill called ‘The Equal Employment for All Act’ that would prohibit the use of consumer credit checks against prospective and current employees for the purposes of making adverse employment decisions.

Source: WWLP.com

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