CWS 3.0: January 8, 2014

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Legislation Would Prohibit Access to Job Hunters’ Credit History

New U.S. legislation to prohibit employers from requesting job candidates’ credit history as part of the application process was introduced last month introduced by Sen. Elizabeth Warren, D-Mass.

“A bad credit rating is far more often the result of unexpected medical costs, unemployment, economic downturns or other bad breaks than it is a reflection on an individual’s character or abilities,” Warren said in a press release.

Warren also cited a study that shows errors in credit reports are common and that other research has shown an individual’s credit rating has nothing to do with his or her success in the workplace.

The bill, according to Warren’s office:

  • Amends the Fair Credit Reporting Act to stop employers from requiring or suggesting that applicants disclose their credit history and from procuring a consumer or investigative report.
  • Prohibits employers from disqualifying employees based on a poor credit rating or information on a consumer’s creditworthiness, standing or capacity.
  • Includes exemptions from positions that require national security clearance.

Warren’s bill is based on a previous bill introduced by Congressman Steve Cohen in 2011.

For more on background checks, including information on credit checks, and contingent workers see the Staffing Industry Review article “Room for Error” by Eric H. Rumbaugh, a partner with law firm Michael Best & Friedrich LLC. 

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