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Strike 3 for bill banning applicant credit checks?

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in Employment Background Check,Human Resources,Leaders & Managers,Management Training

The California State Senate and State Assembly have approved a bill that would restrict the use of credit reports by employers that conduct background checks on job applicants and employees.

But enactment isn’t a sure thing, based on the recent history of similar legislation. Assemblyman Tony Mendoza introduced the bill, which was based on legislation he sponsored in 2009. Gov. Arnold Schwarzenegger vetoed that bill, and similar legislation succumbed to the governor’s veto pen in 2008.

Observers in Sacramento predict a similar fate for A.B. 482, noting that the California Chamber of Commerce has called it a “job killer” bill.

If A.B. 482 becomes law, most employers would be prohibited from using consumer credit reports to make employment decisions unless the information is “substantially job-related.”

The bill provides a few exceptions. A.B. 482 would allow employers to use consumer credit report data on a worker who has access to company finances or assets, trade secrets or other confidential information. Employers could also decide whether to hire management personnel on the basis of their credit histories. Government agencies would be allowed to use credit reports to decide whether to hire certain public employees, such as state Department of Justice workers and sworn law enforcement officers.

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