California joins the growing list of states limiting the use of credit reports for employment purposes. Effective January 1, 2012, employers in California may only use credit reports for employment purposes if the report sought is used in evaluating an applicant’s suitability for one of the following:
Other states that have recently passed legislation limiting the use of credit reports in hiring include Washington, Oregon, Hawaii, Illinois, Maryland, and Connecticut.
What Employers Should Do
1. Employers should ensure their policies and procedures do not require the use of credit reports in a manner prohibited by state acts.
2. Employers should ensure that any use of a credit report meets at least one of the exemptions if available.
3. In the case that use of a credit report is permitted, employers should provide the applicant or employee with (a) written notification that a report will be requested, (b) written notification of the specific reasons for obtaining the report as provided in the statute and (c) a check box allowing the applicant to request a copy of the credit report at no charge.
4. As always, employers should ensure compliance with the requirements of the federal Fair Credit Reporting Act (FCRA).
If you have any questions regarding your background screening services or the provisions of the Act or its implications, please contact Jack Nichols, Director and General Counsel, Creative Services, Inc. at 508-339-5451 x211.
This Client Alert is a courtesy notification for our clients and should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult a lawyer concerning your own situation and any specific legal questions you may have.