California will soon officially become the seventh state to restrict California employers from requesting applicant or employee credit report information for employment purposes effective January 1, 2012. Additionally, Assembly Bill 22 specifies that California employers are also subject to very important new disclosure requirements.
First, EBI understands that the new law stipulates that employers in California may only request credit reports as part of a pre-employment screening program if the applicant is being considered 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.
Second, the law states that California employers must now disclose all of the following information to the applicant or employee applicant or employee before the credit report information is requested:
- Written disclosure that a credit report will be requested;
- A check box allowing the applicant to request a copy of the credit report at no charge; and,
- The specific reason(s) for obtaining the report as provided in the statute (see list of position types above).
To assist you in preparing to comply with this new legislation, EBI has created a SAMPLE AB22 California Credit Report Disclosure & Authorization Form for Employers who are affected by the new law.
Please note that it is the potential employer’s responsibility to complete the section of the new disclosure form to indicate which permissible purpose applies to their request for the credit information before the credit report is requested.
To assist you in preparing to comply with this new legislation, EBI has created a California AB22 - SAMPLE Credit Report Disclosure & Authorization Form for Employers who are affected by the new law. Please contact our Customer Care team @ firstname.lastname@example.org if you would like a copy of the sample form.
Employers subject to these new provisions should contact their legal counsel for guidance immediately and revise their policies accordingly. All information contained herein is provided by Employment Background Investigations solely for the convenience of its clients. EBI is not providing legal advice or counsel and nothing provided on this document should be deemed as legal guidance or advice. Readers should consult with their own legal counsel to determine their legal responsibilities or if they have questions on any information provided by EBI.
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