EBI Alert - California Upholds the Use of Employment Credit Reports

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California Governor Continues To Support The Use Of Credit Reports By Employers

employment credit reports

Governor Schwarzenegger continues to support the use of employment credit reports by California Employers by stating, “I am returning Assembly Bill 482 without my signature.  This bill would prohibit an employer from using a consumer credit report for employment purposes with certain exceptions. 

This bill is similar to legislation I have vetoed for the last two years on the basis that California’s employers and business have inherent needs to obtain information about applicants for employment and existing law already provides protections for employees from improper use of credit reports.  As with the last two bills, this measure would also significantly increase the exposure for potential litigation over the use of credit checks.  For these reasons, I am unable to sign this bill.”

Prohibitions to Employers

This bill would have prohibited an employer, with the exception of certain financial institutions, from obtaining a consumer credit report for employment purposes unless the information meets the following guidelines:

  1. Substantially job-related meaning that the position of the person for whom the report is sought has access to money, other assets, or trade secrets or other confidential information, and;
  2. The position of the person for whom the report is sought is a position in the state Department of Justice, a managerial position, that of a sworn peace officer or other law enforcement position, or a position for which the information contained in the report is required to be disclosed by law or to be obtained by the employer.

EBI Continues To Be Involved In Legislative Issues On Your Behalf

Employment Background Investigations, Inc. (EBI) and the National Association of Professional Background Screeners (NAPBS) will continue its efforts to help defeat any legislation that makes the process of background screening more restrictive for Employers.  Hundreds of NAPBS members outlined their concerns of AB482 and urged the Governor not to sign the bill.  Governor Schwarzenegger agreed with our position and returned the legislation without his signature giving employers in California the opportunity to use this valuable information in their hiring decision process.