On July 11ththe House Financial Services Committee passed the Restricting Credit Checks for Employment Decisions Act (H.R. 3614). This Bill, would amend the Fair Credit Reporting Act and will ban the ability for employers to utilize credit information and perform credit checks for purposes of hiring. The Bill also will prohibit employers and hiring managers to ask related questions during the interview process.
Currently federal law does not prohibit employers from asking about a candidate’s financial information. The EEOC points out that the federal EEO laws do “prohibit employers from illegally discriminating when using financial information to make employment decisions.”
The Bill is part of a larger multi bill that would revamp the FCRA. The Bill does expect to face struggles in the Senate.
For The Bill or Against?
Those in favor of the Bill site that someone’s financial past should not be used against them in seeking employment. The use of credit checks and financial information also can disproportionately impact minorities.
Those in favor of the practice say that the information is helpful in determining a candidate’s judgement and decision making, and also vital for certain positions such as those with fiduciary or executive responsibility.
There is a growing trend to reduce the use of background checks and states along with cities such as Philadelphia, Chicago and New York City have passed laws limiting the use of credit reports in hiring and employment. Most of these laws that have passed limit the use for those positions that it is not relevant information for the position.
(California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont and Washington, and the District of Columbia)
It is important to ensure employers adhere to federal but also to state and local laws. It is also important with any hiring indicator used that you adhere to a well formed policy that supports the practice.
https://www.eeoc.gov/laws/practices/financial_information.cfm
