Credit Checks Limited in California. Federal law next?

California has passed a new law prohibiting employers from using credit checks in most cases, according to Workforce.  

Starting January 1, employers will only be able to only use consumer credit reports for:

  • Managers
  • Positions in the state Justice Department
  • Law enforcement officers
  • Positions where credit reports are required by law
  • Positions where employee must access a retail establishment's credit card applications
  • Positions in which a person would be a named signatory on a bank or credit card account
  • Positions that require access to confidential information
  • Positions that involve regular access to cash amounts of $10,000 or more
The Equal Employment Opportunity Commission (EEOC) recently held a hearing regarding credit checks, so it is quite possible that similar legislation could be considered on the federal level.

Recruiters with clients in California will want to make sure their clients are aware of this new law.  Even if you don't do business in California, it's good to be familiar with this new law since the possibility of similar federal legislation is looming.

Debbie Fledderjohann is the President of Top Echelon Contracting, Inc.

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