Is It Discriminatory To Use Credit Checks In Employment Decisions?

The House Financial Services Institution and Consumer Credit Subcommittee recently heard testimony regarding the use of credit checks and whether their use is discriminatory. At issue – whether H.R. 3149 placing more restrictions on the use of credit checks is necessary to restrain discrimination in light of current laws.

Proponents argue that restricting the use of credit checks is needed to eliminate “unfair hiring practices” and would open up more jobs for those Americans who are qualified for jobs, but have bad credit. The Equal Employment for All Act would prohibit the use of consumer credit checks against prospective and current employees for the purpose of making adverse employment decisions, including hiring, promotions, transfers, and terminations.

Many cite the use of credit checks as disproportionately affecting minorities and that making employment decisions based a credit scores creates a discriminatory bias on the basis of race and national origin. Race discrimination often occurs through subtle practices that tend to screen out minority applicants and employees. Proponents of H.R. 3149 assert that using credit checks does just that, ultimately harming those of color.

Rep. Luis V. Gutierrez concludes, “[c]redit reports are simply inappropriate for use in most hiring decisions.”

As Georgia employment lawyers dedicated to eliminating work place discrimination, we will be following this bill closely. For more information, or if you believe you or a loved one was the victim or race or national origin discrimination, contact Buckley Bala Wilson Mew LLP.