As of January 1, 2012, California will join six other states in restricting the use of credit reports by employers. This new law limits an employer’s ability to perform credit checks on candidates and employees. There are specific criteria that, if met, permit a credit report to be run for employment purposes. This criterion is listed below.
A credit report may be used for employment purposes if and only if the applicant’s position falls into one of these categories:
- A managerial position.
- A position in the State Department of Justice.
- A law enforcement position.
- A position for which the information contained in the report is required by law to be disclosed.
- A position that involves regular access to confidential information (e.g., credit card account, social security number or date of birth).
- A position which the person can enter into financial transactions on behalf of the company.
- A position that involves access to confidential information.
- A position that involves regular access to cash of $10,000 or more of the employer/customer/client.
Should a credit report be run on an applicant for employment purposes based on one of the above exemptions, the following steps must be taken to ensure compliance with this new law:
- The employer must provide the individual with written notice that a report will be requested.
- The employer must provide the specific reasons for obtaining the report.
- A check box on the written notice allowing the applicant to request a copy of the credit report at no charge.
For more information regarding this new law or the implementation of this law, please visit http://leginfo.ca.gov/pub/11-12/bill/asm/ab_0001-0050/ab_22_bill_20111009_chaptered.pdf or contact Mega Group Online at 818-392-5740.