Legislation seeks to restrict use of credit reports in hiring
| Friday, Jun 26 2009 05:32 PM
Last Updated Friday, Jun 26 2009 05:32 PM
A bad credit score has lots of repercussions, including decreased access to credit and trouble leasing an apartment or car.
But if one legislator has his way, it won't cost you a job opportunity.
AB 943, sponsored by Tony Mendoza, D-Artesia, would prevent recruiters from using consumer credit reports to screen job candidates.
Exceptions are made if the applicant for hire or promotion would have access to money or confidential financial information, or would work in law enforcement or city or county government.
The bill has passed in the California State Assembly and is now working its way through the California State Senate.
With California's unemployment rate at nearly 11 percent and layoffs rampant throughout the economy, this safeguard is badly needed, Mendoza said.
"Everybody's credit scores aren't what they once were since the recession, and they aren't a reliable indicator of someone's trustworthiness or work ethic, anyway," Mendoza said. "I'm sure (Ponzi scheme mastermind) Bernard Madoff had excellent credit."
Plus, the use of credit ratings to screen candidates disproportionately affects minorities and women, who typically earn less than their white male counterparts, Mendoza said.
Clay Koerner, president of Human Resources Outsourcing in Bakersfield, thinks credit scores are relevant and valid for all job candidates, regardless of the position they're applying for.
"I don't care who they are, it speaks to integrity and character," Koerner said. "It's only one of many criteria that should be used, but I think we need to be able to see that."
Forty-three percent of U.S. employers conduct credit checks on job applicants, according to the Society for Human Resource Management, a national trade group based in Alexandria, Va.
Katerina Bond, president of the Kern County chapter of the Society for Human Resource Management, declined to comment on the bill.
Most recruiters don't use credit scores for all applicants, but they do like to see the scores of job candidates for sensitive positions, said Larry Williams, a vice president at Work Force Staffing, a Bakersfield temporary employment company.
"We need to be able to check someone out if they're going to be handling checks or something," Williams said.
But, he added, he wouldn't oppose a restriction applying to other, more routine job candidates.
"As long as that exception's in place, I guess it's reasonable," Williams said.
The bill is before the state Senate's Labor and Industrial Relations Committee.
