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CA Restricts use of Consumer / Credit Reports in hiring process

Written by HireCentrix Tuesday, 11 October 2011 23:00

On October the 10th, 2011 Governor Jerry Brown signed into law Assembly Bill 22 (AB 22) which restricts employers and prospective employers – with the exception of certain financial institutions – from using consumer credit reports and credit checks for making decisions about hiring.

California now joins Connecticut, Hawaii, Illinois, Maryland, Oregon, and Washington as the states which also currently restrict conducting credit report checks for employment purposes.

Introduced by Assembly Member Tony Mendoza (D-56th District), AB 22 amends Section 1785.20.5 of the Civil Code and adds Chapter 3.6 (commencing with Section 1024.5) to Part 2 of Division 2 of the Labor Code, relating to employment.

The law prohibits employers, with the exception of certain financial institutions, from obtaining a consumer credit report on the candidate or employee unless the position that the individual is seeking is:

Any position in the California Department of Justice;
A managerial position, as defined in the statue;
A Position of a sworn peace officer or other law enforcement position;
Any position for which the information contained in the report is required by law to be disclosed or obtained;
A position that involves regular access to certain personal information for any purpose other than the routine solicitation and processing of credit card applications in a retail establishment;
A position in which the individual is or would be a named signatory on the employer's bank or credit card account, or authorized to transfer money or enter into financial contracts on the employer's behalf;
Any position that involves access to confidential or proprietary information; or
Any position that involves regular access to $10,000 or more of cash.

The Law also requires that

Job applicants must be informed that there will be a credit check and they will be able to request a copy of the report from the reporting agency. If a job is denied based on the report, the applicant must be advised as to the reasons of the adverse decision.

HCX

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Author of this article: HireCentrix

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