Are Pre-Employment Credit Checks Discriminatory?

Did you have to submit to a credit check when you applied for a job? Many employee advocates are pushing to have such practices banned as potential employment discrimination. As explained by one observer – “How can you pay your debt if you can’t get a job”? If your negative credit report is used against you, this will only further the cycle of unemployment. New York is the latest State to join the push, with legislation pending that would ban discrimination against applicants and employees based on their personal credit rating.

If you believe you have suffered any form of employment discrimination, you should immediately seek the advice of an experienced Georgia employee’s rights attorney to help you determine your next steps. A knowledgeable employee’s rights lawyer can advise you whether certain practices may be unlawful or discriminatory.

Many recent studies have found that credit checks keep valuable people from finding a job and have a discriminatory impact on people of color – particularly those whose credit histories have been damaged predatory lending that continues to target communities of color, as well as the enduring impact of racial discrimination in employment, lending, education and housing.

What is the law on pre-employment credit checks? The answer depends on a variety of factors. The EEOC provides “Inquiry into an applicant’s current or past assets, liabilities, or credit rating, including bankruptcy or garnishment, refusal or cancellation of bonding, car ownership, rental or ownership of a house, length of residence at an address, charge accounts, furniture ownership, or bank accounts generally should be avoided because they tend to impact more adversely on minorities and females. Exceptions exist if the employer can show that such information is essential to the particular job in question.”

Further, 10 states have limited laws banning credit checks including California, Connecticut, Hawaii, Illinois, Maryland, Oregon and Washington. In the meantime, if an employer requires you to submit to a credit check prior to employment, it must comply with the legal rules set forth in the federal Fair Credit Reporting Act (FCRA). FCRA requires that employers:

• obtain your consent;
• give the you a warning (along with a copy of the report received) if the employer plans to reject you on the basis of the report; and • give you an official adverse action notice if the employer does not hire him or her because of the contents of the report.

If you have questions concerning whether your particular employer (or potential employer) can run a credit check on you, contact an experienced Georgia anti-discrimination lawyer at Buckley Bala Wilson Mew LLP right away.