New California Law Restricts Use of Credit Reports in Hiring

Gov Jerry Brown has signed a bill (AB 22) that prohibits employers from pulling credit reports on prospective employees, with exceptions. The exceptions include positions in management and in law enforcement, positions that require handling over $10,000 cash, and positions in which the employee will sign checks or transfer money for the employer. According to the California Labor Federation 60% of employers routinely order credit reports on job applicants. The proponents of the bill argued that a person’s credit score says nothing about his or her character or ability to do a job effectively and responsibly. Secondly, credit reports contain...

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