Menus Subscribe Search

Follow us


California May Be Next to Limit Employer Credit Checks

• August 31, 2011 • 3:41 PM

A bill on the floor of the California Senate, if passed and signed, will limit employers’ ability to conduct credit checks of non-managerial employees.

John Greenya wrote for Miller-McCune.com in June about the vicious cycle that employer credit checks can create for job seekers. If you’re unemployed and you’re behind on some credit card bills or you have a bad mortgage, suddenly your credit report* might be another barrier to finding a new job and getting back on your feet.

Businesses that use credit checks as an employee screening tool may argue that it helps them pre-emptively weed out bad apples.

Organizational psychologist Michael Aamodt told the U.S. Equal Opportunity Commission last year that a meta-analysis of the tiny amount of research done on the question found a statistically significant, but low, correlation between poor credit history and “counterproductive work behaviors.”

When the Society for Human Resource Management polled its members in 2010, it learned that 13 percent require the credit reports of all applicants, and almost half (47 percent) of its member companies require them of some job applicants.

Four states, Hawaii, Washington, Oregon and Illinois, either ban or sharply limit the practice, and a number of states have seen failed legislative attempts to enact similar laws. In the nation’s most populous state, a legislator is currently trying for a third time to ban the practice (with some exemptions for people like police or managers).

California Assemblyman Tony Mendoza’s latest effort follows up on the same legislation that passed the state Legislature in both 2009 and 2010, but was vetoed both times by then-Governor Schwarzenegger. (“California’s employers and businesses have inherent needs to obtain information about applicants for employment and existing law already provides protections for employees from improper use of credit reports,” Schwarzenegger wrote in one veto message.)

It is unclear whether the new governor, Jerry Brown, supports the legislation, which is currently on the floor of the state Senate.

“A credit report is not a good indicator of a person’s trustworthiness or work ethic,” Mendoza says. “Many Californians are still experiencing financial hardships from the economic downturn including layoffs, increasing unemployment rates, and the continuing foreclosure crisis. All of these things make it harder for people to pay their bills.”

*An earlier version of this story incorrectly referred to credit scores, not credit reports. Credit scores are not available to employers.

Sign up for the free Miller-McCune.com e-newsletter.

“Like” Miller-McCune on Facebook.

Follow Miller-McCune on Twitter.

Add Miller-McCune.com news to your site.

Subscribe to Miller-McCune

Dan Watson
Dan Watson is a fellow at Miller-McCune. An editor originally from York, Pa., he has a bachelor’s in English from Emory University, and previously served as the editorial intern for Grist.

More From Dan Watson

A weekly roundup of the best of Pacific Standard and PSmag.com, delivered straight to your inbox.

Recent Posts

September 22 • 4:00 PM

The Overly Harsh and Out-of-Date Law That’s So Difficult on Debtors

A 1968 federal law allows collectors to take 25 percent of debtors’ wages, or every penny in their bank accounts.


September 22 • 2:00 PM

NFL Players Are More Law Abiding Than Average Men

According to records kept by USA Today, 2.53 percent of players are arrested in any given year.


September 22 • 12:00 PM

Freaking Out About Outliers: When the Polls Are Way Off

The idea of such a small number of people being used to predict how millions will vote sometimes irks observers, but it’s actually a very reliable process—most of the time.


September 22 • 10:00 AM

The Imagined Sex Worker

The stigma against black sex workers can reinforce stigmas against all black women and all sex workers.


September 22 • 9:54 AM

All-Girls Schools Don’t Make Girls More Competitive

Parents, not educational setting, may be the key.


September 22 • 8:00 AM

The NFL, the Military, and the Problem With Masculine Institutions

Both the NFL and the U.S. military cultivate and reward a form of hyper-violent masculinity. The consequences of doing so have never been more obvious.


September 22 • 6:00 AM

Zombies in the Quad: The Trouble With Elite Education

William Deresiewicz’s new book, Excellent Sheep, is in part, he says, a letter to his younger, more privileged self.


September 22 • 4:02 AM

You’re Going to Die! So Buy Now!

New research finds inserting reminders of our mortality into advertisements is a surprisingly effective strategy to sell products.



September 19 • 4:00 PM

In Your Own Words: What It’s Like to Get Sued Over Past Debts

Some describe their surprise when they were sued after falling behind on medical and credit card bills.



September 19 • 1:26 PM

For Charitable Products, Sex Doesn’t Sell

Sexy women may turn heads, but for pro-social and charitable products, they won’t change minds.


September 19 • 12:00 PM

Carbon Taxes Really Do Work

A new study shows that taxing carbon dioxide emissions could actually work to reduce greenhouse gases without any negative effects on employment and revenues.


September 19 • 10:00 AM

Why the Poor Remain Poor

A follow-up to “How Being Poor Makes You Poor.”


September 19 • 9:03 AM

Why Science Won’t Defeat Ebola

While science will certainly help, winning the battle against Ebola is a social challenge.


September 19 • 8:00 AM

Burrito Treason in the Lone Star State

Did Meatless Mondays bring down Texas Agriculture Commissioner Todd Staples?


September 19 • 7:31 AM

Savor Good Times, Get Through the Bad Ones—With Categories

Ticking off a category of things to do can feel like progress or a fun time coming to an end.


September 19 • 6:00 AM

The Most Untouchable Man in Sports

How the head of the governing body for the world’s most popular sport freely wields his wildly incompetent power.


September 19 • 4:00 AM

The Danger of Dining With an Overweight Companion

There’s a good chance you’ll eat more unhealthy food.



September 18 • 4:00 PM

Racial Disparity in Imprisonment Inspires White People to Be Even More Tough on Crime

White Americans are more comfortable with punitive and harsh policing and sentencing when they imagine that the people being policed and put in prison are black.



September 18 • 2:00 PM

The Wages of Millions Are Being Seized to Pay Past Debts

A new study provides the first-ever tally of how many employees lose up to a quarter of their paychecks over debts like unpaid credit card or medical bills and student loans.


September 18 • 12:00 PM

When Counterfeit and Contaminated Drugs Are Deadly

The cost and the crackdown, worldwide.


September 18 • 10:00 AM

How Do You Make a Living, Molly Crabapple?

Noah Davis talks to Molly Crapabble about Michelangelo, the Medicis, and the tension between making art and making money.


Follow us


All-Girls Schools Don’t Make Girls More Competitive

Parents, not educational setting, may be the key.

For Charitable Products, Sex Doesn’t Sell

Sexy women may turn heads, but for pro-social and charitable products, they won't change minds.

Carbon Taxes Really Do Work

A new study shows that taxing carbon dioxide emissions could actually work to reduce greenhouse gases without any negative effects on employment and revenues.

Savor Good Times, Get Through the Bad Ones—With Categories

Ticking off a category of things to do can feel like progress or a fun time coming to an end.

How to Build a Better Election

Elimination-style voting is harder to fiddle with than majority rule.

The Big One

One in three tourists to Jamaica reports getting harassed; half of them are hassled to buy drugs. September/October 2014 new-big-one-4

Copyright © 2014 by Pacific Standard and The Miller-McCune Center for Research, Media, and Public Policy. All Rights Reserved.