California Restricts The Use Of Employment Credit Reports To Certain Positions

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California Credit Reports RestrictedCalifornia has become the seventh state to restrict the use of credit report information for employment purposes as Governor Jerry Brown signed Assembly Bill 22 on October 10, 2011. The new guidelines go into effect January 1, 2012, and employers in California may only use a consumer credit reports for employment purposes if the report is sought for one of the following: 

  • A managerial position;
  • A position in the state Department of Justice;
  • A sworn peace officer or other law enforcement;
  • A position for which the information contained in the report is required by law to be disclosed or obtained;
  • A position that involves regular access to confidential information ( credit card account information, Social security number, or Date of birth);
  • A position which the person can enter into financial transactions on behalf of the company;
  • A position that involves access to confidential or proprietary information; or
  • A position that involves regular access to employer, customer, or client cash totaling $10,000 or greater during the workday. 

EBI understands that when these new guidelines go into effect January 1, 2011, employers in California who obtain a consumer report for one of the limited exceptions outlined in the statute must provide the person for whom the credit report is sought with: 

  • Written disclosure that a report will be requested;
  • A check box allowing the applicant to request a copy of the credit report at no charge; and;
  • The specific reasons for obtaining the report as provided in the statute. 

Employers subject to these new requirements should contact their legal counsel for guidance immediately and revise their policies accordingly.

Employment Credit Reports From EBI
At EBI, we understand the critical role credit reports play in assessing a candidate or even a current employee.  EBI offers access to FCRA compliant employment credit reports in a secure and confidential manner.  EBI can provide a complete picture of your candidate, confirming the candidate’s true identity, address history, and credit worthiness with our “one stop” background screening solutions.  If you would like to know more about what other states restrict the use of credit reports please read the following article titled “Credit Reports For Employment Purposes – State Law Compliance”.

EBI is committed to providing employers with valuable education and resources on changing legislation and cutting-edge and compliant solutions to meet federal, state, local and international mandatory requirements. If you found this information useful, select the button listed below and access more industry news, resources and tips from EBI, an NAPBS Accredited screening firm and global leader in the background screening industry!