Say you never paid off your first car, have outstanding medical bills or took out way too many credit cards in college, as of now in most states that can cost you a job offer. Good credit is needed for many things such as obtaining a loan or renting an apartment but I bet no one ever told your employers would be checking. So if you have bad credit and you’re denied a job, is that discrimination? According to some the answer is yes.

By definition discrimination is “the unjust or prejudicial treatment of different categories of people or things.” The argument is employers are over stepping and not using credit checks appropriately, which discriminates against those who can’t afford to pay off their debt. Supporters of the ‘ban the box’ movement are saying “Keep the past in the past.” If a dated arrest record can’t count against you, why should bad credit?

Similar to ‘ban the box’, banning credit checks from employment screening has been a slow fight but continues to gain popularity. Over 10 states have bans in place now that include exceptions for financial based positions. Many states including Florida have proposed bills that have yet to pass but they continue to try. In Florida’s most recent attempt a chairwoman of the Senate Committee defended the ban stating, “There’s no sense having further roadblocks to their getting a job.” while also exclaiming, “If you’re stocking shelves at Wal-Mart, pumping gas in a gas station or working on a factory line, you don’t really need your credit history to be one of the things your employer considers when hiring you.” The newest state to propose a bill is New Jersey; the bill requires that all credit checks be banned unless one is required by law. This case would be law enforcement and financial service jobs. The bill is already backed and due to have a final vote soon.

What does the mean for Employers?

Many people can see the direction this is going, if ruled as discrimination, similar guidelines to criminal records may be put in place by the EEOC.  As an employer, be sure you are using credit checks properly and watch for updates.

What to do going forward?

  • Stay Educated: Check your state laws and protect your business from a lawsuit.
  • Don’t Over-Step: If no law is present, use credit checks for identity purposes, such as different alias’s or an address history.
  • Personal Assessments: If there is a red flag in the credit check, use a personal assessment of the candidate to make hiring decision.

Active Screening offers a variety of solutions including Identity and Credit checks. These services are designed to confirm your candidate’s identity and their right to work status in the US, as well as confirm residential history and previous names used. This will allow for a more thorough screening without hindering or discriminating against any candidate. To find out more about all our solutions please visit https://www.activescreening.com/our-solutions/.

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