Is running a credit check part of your hiring procedures? Are you doing these credit checks legally? Lots of big named companies are getting sued for violations of the Fair Credit Reporting Act (FCRA), including a new lawsuit at craft giant Michaels.
What’s the problem? Well, the law stipulates that you have to give candidates specific notice that you are going to run a credit check on them, and give them proper notice before taking any adverse action (usually, not hiring) them. The notice has to be clear and obvious–it can’t be buried on page 3 of some terms and conditions that you have to click through before filling out the online application.
The reality is that employment law is extremely complex, which is why you need anemployment lawyer on your speed dial. But the strange thing is, these companies aren’t little Mom and Pop operations where the owners hire their neighbor to do the legal work for setting up their business, buying their house, and reviewing their hiring forms. These are major corporations, with employees in the tens of thousands of employees. (In fact, Dollar General who is also being sued, has over 100,000 employees.)
To keep reading, click here: If You Run Credit Checks on Your Job Candidates, Now Would Be A Good Time To Panic
On 12/17/2013, Sen. Elizabeth Warren (D-MA) and six of her colleagues in the U.S. Senate introduced legislation that would prevent employers from using credit checks in the hiring process. Research shows that a person’s credit score has nothing to do with his or her likelihood of succeeding in the workplace. The bill is being backed by over 40 community, financial reform, labor and civil rights organizations. Read a brief article about it here: http://www.motherjones.com/mojo/2013/12/elizabeth-warren-employers-credit-check.
I hope this bill passes. It’s time to put a stop to this practice, which is contributing to high unemployment and hurting the economy.
What does credit checks have to do with unemployment? Judt because someone turns someone down for a job becuase of bad credit, doesnt mean they are taking that job off the market for everyone. Someone will still be hire for that job. It may effect the employment rate of the long term unemployed, but overall employment rate, it has no effect on.
“You want people working for you who want to work for you. If you have to bury things in the fine print to get people to work for you, you need to change how you operate.”
Thank you! That is a brilliant statement that more organizations need to heed – and not just about credit checks; but everything.