California Labor &
Employment Law Blog
Jun 21, 2010

Legislation Limiting Employer Use of Credit Reports Pending in California

Topics: Employee Hiring, Discipline & Termination, New Laws & Legislation

AB 482, which would restrict the use of credit reports for employment purposes, is pending before the California Legislature this session. If enacted in its current form, AB 482 would prohibit employers, with the exception of certain financial institutions, from obtaining a consumer credit report for employment purposes unless the information is (1) substantially job-related, meaning that the position of the person for whom the report is sought has access to money, other assets, or confidential information; and (2) the position of the person for whom the report is sought is a position in the state Department of Justice, a managerial position, that of a sworn peace officer or other law enforcement position, or a position for which the information contained in the report is required to be disclosed by law or to be obtained by the employer. This legislation would significantly curtail the ability of employers to obtain or use credit reports in the hiring and background check process. A hearing on the proposed legislation is scheduled for June 29 in the Senate Judiciary Committee. We will continue to monitor this legislation and post developments here.

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