Credit Reports are an important part of any background checking or preemployment screening program. Credit reports reveal more than just the personal credit status of your employment candidates. The credit report can also indicate certain behavior patterns. But in California, access to employment candidate credit reports is about to change.
According to the Los Angeles Times, a bill is headed to Governor Arnold Schwarzenegger that would narrow the types of jobs for which employers could order credit reports on their job candidates. The claim is that more laid off employees are finding it increasingly difficult to find work due to mediocre credit reports as fallout from this economic downturn. According to some, those whose credit reports have been diminished by the recession are not as competitive as those who have maintained a better credit rating.
This may be true. I would have little reason to doubt. Although I have seen clients who while hiring at even the higher levels of the their companies have paid less heed to blemishes on their candidates’ credit reports.
The new bill would still allow employers to run credit reports as part of their background checks on job candidates who will have access to large amount of cash, sensitive databases, financial records, and the like. Without this capability, employers could leave themselves vulnerable to employee theft and various chicanery that has also marked the recession with occasional news headlines on the more sensational examples.
Employers argue that the credit report as well as other background searches shows the candidate’s organizational and management skills. They certainly have a point. At the same time, to penalize job candidates for falling under on of the worst economic downturns in our nation’s history is also questionable logic.
It will be interesting to see how this bill plays out in California, and if other states will follow suit.
