Tuesday, February 7, 2012

Credit Check change...

AB 22 became effective on January 1, 2012. One of about 18 new laws, this is perhaps one that will affect many employers because it limits the use of credit checks.
We've all been there. We fill out our employment application, as we wait for our interviewer to be ready, only to be asked to sign our life away and allow the employer who may or may not offer us a job, to check our credit. This is no longer the case. AB 22 says that employers and prospective employers are prohibited from obtaining and using consumer credit reports about applicants. Of course the exceptions are certain financial institutions and if the job you're applying is a managerial position that qualifies for exempt status. Now more than ever there is a need to know the exempt/non-exempt status. Please refer to an employment attorney for some guidence in this situation.

The prohibition against obtaining and using credit reports also does not apply to:

-Law enforcement and positions for which the info is required by law
-Positions that involve regular access to bank or credit card information, SS numbers and date of birth.
-Positions in which the person would sign on the employers checking accounts, credit cards, transfer money or enter into financial contracts on behalf of the employer.
-Position involving access to proprietary information
-Positions that involve regular access to cash totaling $10,000 or more of the employer, customer or client during the work day.

So, if you are in the midst of hiring someone, please make sure that you do not violate the law and ask them to sign off on that pesky credit report form, unless the position you are trying to fill truly needs it.

If you have questions about human resources or need consulting in the area of human resources, please contact me, Rosandra Esquivel, at rosandra@thehrfirm.com

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