Using Credit Background Checks for Employment Purposes
Employers using a credit check as part of background checks for new employees should be made aware of potential developments in Washington over its use.
There has been much scrutiny by the EEOC over the use of credit reports being used in making hiring decisions by employers. Employers can expect to see closer attention paid to the question of “disparate impact” that cause certain groups to be excluded from employment because of the information contained in the report.
Most employers use the information in credit background checks as part of the overall pre employment screening process, and never rely solely on the credit history, although the EEOC does not seem convinced of that.
To ensure compliance, the following non-legal advice is offered regarding the use of credit reports for employment purposes:
· Review employment applications to be certain information requested is compliant
· Review background screening policies for your business for fairness
· Review positions requiring credit background checks and narrow if necessary
· Request a credit report only after a conditional offer of employment is made
· Discuss concerns with the applicant beforehand
· Ensure compliance with all state regulations, which may be more restrictive than those regulated by the FCRA
The Equal Opportunity for All Act, which severely restricts the use of credit reports in pre employment background checks, has been reintroduced in the new Congress as HB 321.
All information contained in this blog is informational/opinion only and should not be construed as legal advice. If you need legal advice, consult a qualified attorney.