What Is A Credit Report?
California is one of the few states that provides greater protection for job applicants and employees against the use of credit reports for employment purposes than the federal law does. California limits the reasons for allowing employers to use credit reports in making decisions to hire an applicant. There are circumstances where employers can use credit reports. Under these conditions, California law requires that notice must be given to applicants if the employer plans to check credit reports. Employers are also required to notify the applicant if the credit reports are the reason for an adverse employment decision.
Credit reports contain a person’s complete credit history for the past seven years including payments that were 30 or more days late and accounts that have been closed due to a bad payment history. They also include data on the person’s total debt load. Bankruptcies are reported for 10 years.
Most employers are not allowed to pull credit reports. The general rule in California is that an employer cannot acquire or use an applicant’s credit report in making hiring decisions. The same rule applies to pulling credit reports for existing employees. However, applicants for certain positions and employees who are being considered for promotions to these positions, can be required to authorize the employer’s access to their credit reports. These positions include but are not limited to the following positions:
> Managerial
>State Department of Justice
>Law enforcement positions including peace officers
>Access to specified personal information including social security numbers
>Involving the routine handling of cash
>Access to the employer’s bank account.
>That include the authority to transfer money
>That allow the employee access to trade secrets and proprietary information
>That provide access to at least $10,000 in a workday
The applicant or the employee must be given written notice If the employer wants to obtain a copy of the credit report, and the notice must state which of the allowed exceptions to the ban on considering credit information justifies the request. The notice must also provide a box that the person can check if they want a copy of the credit report used by the employer. The employer is required to identify the credit reporting agency used to prepare the report.
The California law enables an applicant or an employee not to reveal a bankruptcy unless the position is included in one of the above categories. Bankruptcy may be viewed negatively by employers, so not disclosing it is a person’s right up to a point.
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