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credit checks in employment

Philadelphia prohibits use of credit checks in employment screening

legislation makes it illegal for employers to use the credit information of Philadelphia job applicants or employees – unless covered by an exception – for employment decisions such as hiring, firing, or promotion. Exceptions include: to any law enforcement agency or financial institution; to the City of Philadelphia with respect to efforts to obtain information…

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Calif. courts disagree about how to proceed with some background checks

relating to the employee’s character, general reputation … and qualifications for potential employment.” Connor sued under the California Investigative Consumer Reporting Agencies Act (ICRAA), because First Student had not obtained her written permission before conducting any background screening, whether for a credit or character report. Meanwhile, First Student requested summary judgment due to the ICRAA…

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Why do employers check credit?

New York City’s decision to ban all employment credit checks this past spring, we thought it would be a good idea to revisit that question: Why DO employers check credit scores for potential employees, and what information do they get when they pull a credit report? First of all, when an employer pulls a credit…

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Reminders for employers regarding Fair Credit Reporting Act compliance

More and more employers have fallen victim to lawsuits brought on by former applicants for violating the Fair Credit Reporting Act, a federal law that requires employers to take specific actions when conducting credit checks in order to allow job applicants a fair chance at the position for which they are applying. As a reminder,…

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New York City passes pre-employment credit-check ban

strictest pre-employment credit checking law in the country. In a 47-3 vote, the New York City Council passed a bill preventing employers in the city from running credit checks on job applicants. “Millions of Americans who have bad credit would also be great employees,” said Brad Lander, who sponsored the bill. “What they need to…

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41 NYC Council members want to end this pre-employment practice

bill to ban credit checks during pre-employment background screening, unless credit checks are required by federal or state law. Council member Brad Lander sponsored the bill — called the Stop Credit Discrimination in Employment Act — which argues that credit checks are more likely to screen out black and Hispanic applicants, even though there is…

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Don’t take credit-report screening advice for granted

It was more than six months ago when craft retailer Michaels was allegedly informed that it needed to move its background check disclosure statement on its job applications. Michaels was allegedly told by consumer reporting agency General Information Services Inc. that it needed to put that disclosure on a separate document, as it was “included…

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NYC considers ban-the-box legislation more stringent than most for employers

In mid-December, the New York City Council introduced a proposal for the city’s own ban-the-box laws, just months after it introduced a bill that would prevent city employers from using credit checks against job candidates. (That bill is still being debated.) Over the previous years, employers in the state have not been able to refuse…

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Study: credit score an indicator of personal health, not just financial

A new study entitled “Credit scores, cardiovascular disease risk, and human capital” was released in the December issue of Proceedings of the National Academy of Science, in which researchers studied more than 1000 people for almost 40 years to determine if heart health and personal finances could be correlated. Employers often use credit reports to…

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FICO announces new credit scoring system for medical debt

Employers may now need to take a closer look at potential employees’ credit reports, as credit-scoring company Fair Isaac Corporation (FICO) has announced plans to revise the way it reports medical debts that have been sent to collections. One third of Americans find themselves stuck with medical debts. The new system, also known as “FICO…

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