Tuesday, May 17, 2011

Credit Checks for Job Applicants - A Very Bad (Yet Legal) Common Practice

Here is an excellent article from TLNT.com that discusses the recent trend towards performing credit checks on potential employment applicants.  As the article discusses, this practice is leagl in all but 4 states.  However, the EEOC is looking into this practice rather intently.  And, with good reason.

There are many Americans who, through no fault of their own, have been out of work for some time.  They already bear the "unemployed" stigma.  Undoubtedly, many of them have suffered a loss of good credit standing (especially when you take into account the voracious appetites of creditors over the past 3 years).  Bad credit does not always reflect a moral, intellectual or psychological defect.  Somethimes, it happens to good, honest, hardworking people.  Can you imagine how much harder it will be for unemployed people to find a job if a good credit rating is an additional requirement for employment?

Utilizing credit ratings to make decisions on who to hire is a bad idea, particularly in this economic climate.  Hopefully, state or federal governments will step in to stamp out this practice.

RELATED NOTE:  A third Circuit Court has held that it is proper for an employer to reject an applicant who has filed a bankruptcy in the past.  The EEOC is looking carefully at this practice.

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