Legal Update: Use of Credit Reports in California
The State of California has been busy setting limitations on the use of employment-related credit reports. AB 22 will become effective on January 1, 2012 and significantly prohibits the use of credit reports in employment related decisions. Employers in the private sector may only request a credit report for the positions noted below, and only when the candidate has been informed that a report will be requested and that candidate has given their permission in writing. The employer must also provide a copy of the report, free of charge, to the individual on which it was requested. If employment is denied, then FCRA adverse action guidelines must be followed.• Positions for which the information contained in the report is legally required to be disclosed or obtained;
• Managerial positions;
• Positions that require regular access to confidential information (i.e., credit card account information, Social Security Numbers, etc…);
• Positions in which the individual can enter into financial transactions on behalf of the company;
• Positions which involve access to confidential or proprietary information;
• Positions which involve regular access to cash totaling ten thousand dollars or more of the employer, a customer, or client, during the course of a workday.