Trend: More States Looking to Ban Pre-employment Credit Checks
Posted by Reem Hassani on Wed, Jul 21, 2010 @ 10:29 AM
If you’ve been following our Blog, then you know that Oregon just recently joined the bandwagon of states that have made it illegal for employers to use Credit Checks in the hiring process. Both Washington and Hawaii already have similar legislation in place, and now 16 other states have begun to turn their attention in that direction.
Representatives in states ranging from South Carolina to Illinois to Wisconsin are beginning the legal processes of introducing bills that could potentially ban employers from running credit checks on applicants when the job-in-question doesn’t require a credit history to be performed. For instance, employers wouldn’t be able to obtain a credit history of a mechanic as it’s not necessary to determine if he can perform his job—as opposed to accountants or bank tellers (who would be an exception to the law.)
In a recent USA Today article, States may ban credit checks on job applicants , Andy Manis detailed a true story that inspired such legislation. Terry Becker is just one example of a person that was negatively affected by pre-employment credit checks that undeservedly prevented him from getting several different Jobs. According to the article,
“Becker said it all started with medical bills that piled up when his now 10-year-old son began having seizures as a toddler. In the first year alone, Becker ran up $25,000 in medical debt.
Over 4½ months, he was turned down for at least eight positions for which he had authorized the employer to conduct a credit check, Becker said. He said one potential employer told him, ‘If your credit is bad, then you'll steal from me.’”
Once figures like Tennessee State Rep. Steve Cohen, Maryland Delegate Kirill Reznik, and Wisconsin State Rep. Kim Hixson heard of Becker’s story, they began drafting legislation that would help unemployed Americans like Becker get back in on the job market. According to a survey published by the Society for Human Resources Management, an estimated 60 percent of employers already run credit checks on at least some job applicants—but many states want that to change.
States with pending legislation now include: South Carolina, Maryland, Vermont, Connecticut, Michigan, Illinois, Ohio, Georgia, Missouri, Indiana, New Jersey, Oklahoma, New York, Wisconsin, and Pennsylvania.
Premier will keep you posted about what these states plan to do specifically, and whether or not the legislation is passed. But in the meantime, tell us what you think. Should employers be allowed to run credit checks at their discretion? Or should pre-employment credit checks be regulated and limited?