Employers are permitted by law to run credit checks on employees or prospective employees, and nearly half do, according to a 2012 study by SHRM. But there are limits to how these checks can be ordered and used, and the FTC and the EEOC want employers and employees to be aware of them by jointly issuing two guides explaining how the Fair Credit Reporting Act and antidiscrimination law restrict the practice. The guides point out legal safeguards such as the requirement for written permission from the employee or applicant before a credit check is run, the employee or applicant’s right to review and resolve any negative finding in the credit report before the employer acts on that information, and prohibitions in the law against using credit checks in a discriminatory manner. According to fair credit attorney Jim Francis, employer compliance with the law is a problem. Francis says he sees “widespread violation” of the pre-adverse action notification. “The employer just moves on to the next candidate. That is not what the law provides,” Francis said. “At a minimum, the law requires five days to dispute and resolve” the negative information on the report.
Hiring Tips Blog

Credit Checks Pose Hurdle for Job Seekers
May 1, 2014 | Credit Checks, Employment Screening
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