In a move that impacts employers in the Golden State conducting credit report checks on job applicants, California Governor Jerry Brown has signed into law Assembly Bill 22 (AB 22) which prohibits employers or prospective employers – with the exception of certain financial institutions – from obtaining consumer credit reports for employment purposes. When the new law takes effect January 1, 2012, California will join Connecticut, Hawaii, Illinois, Maryland, Oregon, and Washington as U.S. states currently restricting the use of credit checks by employers for employment decisions.
Introduced by Assembly Member Tony Mendoza (D-56th District), AB 22 amends Section 1785.20.5 of the Civil Code and adds Chapter 3.6 (commencing with Section 1024.5) to Part 2 of Division 2 of the Labor Code, relating to employment. The bill prohibits employers from obtaining a consumer credit reports unless the job position of the person for whom the report is sought is one of the following:
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- A position in the state Department of Justice,
- A managerial position,
- A sworn peace officer or other law enforcement position,
- A position for which the information contained in the report is required by law to be disclosed or obtained,
- A position that involves regular access to specified personal information for any purpose other than the routine solicitation and processing of credit card applications in a retail establishment,
- A position in which the person is or would be a named signatory on the employer’s bank or credit card account, or authorized to transfer money or enter into financial contracts on the employer’s behalf,
- A position that involves access to confidential or proprietary information, or
- A position that involves regular access to $10,000 or more of cash.
In addition, AB 22 also requires the written notice informing the person for whom a consumer credit report is sought for employment purposes to also inform the person of the specific reason for obtaining the report.
