The New York State Legislature is considering restricting employers’ ability to check job applicants’ credit. Critics of pre-employment credit checks have noted that the economic downturn has forced many people to miss payments, and that the practice may unreasonably rule out large numbers of applicants.
Democrat Michael Benjamin, who sponsors the bill, told USA Today, “Employers do the checks routinely without showing there’s any connection to the job.”
For example, the federal Transportation Security Agency will not hire anyone with $5,000 or more in overdue debt. The practice effectively bars 22% of the agency’s applicants.
The EEOC has long held that credit checks should only be used for jobs with fiduciary responsibilities. The EEOC also notes that credit checks often disproportionately screen out minorities and females.
Note: Employers that run credit checks on applicants could find themselves the target of a disparate impact lawsuit.
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