Menus Subscribe Search

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


July 25 • 11:07 AM

The West’s Groundwater Is Being Sucked Dry

Scientists were stunned to discover just how much groundwater has been lost from beneath the Colorado River over the past 10 years.


July 25 • 10:00 AM

Shelf Help: New Book Reviews in 100 Words or Less

What you need to know about Bad Feminist, XL Love, and The Birth of Korean Cool.



July 25 • 8:00 AM

The Consequences of Curing Childhood Cancer

The majority of American children with cancer will be cured, but it may leave them unable to have children of their own. Should preserving fertility in cancer survivors be a research priority?


July 25 • 6:00 AM

Men Find Caring, Understanding Responses Sexy. Women, Not So Much

For women looking to attract a man, there are advantages to being a caring conversationalist. But new research finds it doesn’t work the other way around.


July 25 • 4:00 AM

Arizona’s Double-Talk on Execution and Torture

The state is certain that Joseph Wood’s death was totally constitutional. But they’re looking into it.


July 24 • 4:00 PM

Overweight Americans Have the Lowest Risk of Premature Death

Why do we use the term “normal weight” when talking about BMI? What’s presented as normal certainly isn’t the norm, and it may not even be what’s most healthy.


July 24 • 2:00 PM

California’s Lax Policing of the Fracking Industry Has Put the Drought-Stricken State in a Terrible Situation

The state’s drought has forced farmers to rely on groundwater, even as aquifers have been intentionally polluted due to exemptions for the oil industry.


July 24 • 12:00 PM

What’s in a Name? The Problem With Washington’s Football Team

A senior advisor to the National Congress of American Indians once threw an embarrassing themed party that involved headdresses. He regrets that costume now, but knows his experience is one many others can relate to.


July 24 • 11:00 AM

How Wildlife Declines Are Leading to Slavery and Terrorism

As wildlife numbers dwindle, wildlife crimes are rising—and that’s fueling a raft of heinous crimes committed against humans.


July 24 • 10:58 AM

How the Supremes Pick Their Cases—and Why Obamacare Is Safe for Now

The opponents of Obamacare who went one for two in circuit court rulings earlier this week are unlikely to see their cases reach the Supreme Court.



July 24 • 9:48 AM

The People Who Are Scared of Dogs

While more people fear snakes or spiders, with dogs everywhere, cynophobia makes everyday public life a constant challenge.


July 24 • 8:00 AM

Newton’s Needle: On Scientific Self-Experimentation

It is all too easy to treat science as a platform that allows the observer to hover over the messiness of life, unobserved and untouched. But by remembering the role of the body in science, perhaps we humanize it as well.


July 24 • 6:00 AM

Commercializing the Counterculture: How the Summer Music Festival Went Mainstream

With painted Volkswagen buses, talk of “free love,” and other reminders of the Woodstock era replaced by advertising and corporate sponsorships, hippie culture may be dying, but a new subculture—a sort of purgatory between hipster and hippie—is on the rise.


July 24 • 5:00 AM

In Praise of Our Short Attention Spans

Maybe there’s a good reason why it seems like there’s been a decline in our our ability to concentrate for a prolonged period of time.


July 24 • 4:00 AM

How Stereotypes Take Shape

New research from Scotland finds they’re an unfortunate product of the way we process and share information.


July 23 • 4:00 PM

Who Doesn’t Like Atheists?

The Pew Research Center asked Americans of varying religious affiliations how they felt about each other.


July 23 • 2:00 PM

We Need to Start Tracking Patient Harm and Medical Mistakes Now

Top patient-safety experts call on Congress to step in and, among other steps, give the Centers for Disease Control and Prevention wider responsibility for measuring medical mistakes.


July 23 • 12:19 PM

How a CEO’s Fiery Battle Speeches Can Shape Ethical Behavior

CEO war speech might inspire ethical decisions internally and unethical ones among competing companies.


July 23 • 12:00 PM

Why Do We Love the ‘Kim Kardashian: Hollywood’ Game?

It’s easy enough to turn yourself into a virtual celebrity, complete with fame and mansions—but it will likely cost you.


July 23 • 11:49 AM

Modern Technology Still Doesn’t Protect Americans From Deadly Landslides

No landslide monitoring or warning systems are being used to protect vulnerable communities.


July 23 • 10:00 AM

Outing the Death-Drug Distributors

Calling all hackers: It’s time to go Assange on capital punishment.


July 23 • 8:00 AM

The Surprising Appeal of Products That Require Effort to Use

New research finds they enable consumers to re-establish a feeling that they’re in control of their lives.


Follow us


Subscribe Now

The West’s Groundwater Is Being Sucked Dry

Scientists were stunned to discover just how much groundwater has been lost from beneath the Colorado River over the past 10 years.

How Wildlife Declines Are Leading to Slavery and Terrorism

As wildlife numbers dwindle, wildlife crimes are rising—and that's fueling a raft of heinous crimes committed against humans.

How a CEO’s Fiery Battle Speeches Can Shape Ethical Behavior

CEO war speech might inspire ethical decisions internally and unethical ones among competing companies.

Modern Technology Still Doesn’t Protect Americans From Deadly Landslides

No landslide monitoring or warning systems are being used to protect vulnerable communities.

The Link Between Carbs, Gut Microbes, and Colon Cancer

Reduced carb intake among mice protected them from colon cancer.

The Big One

Today, the United States produces less than two percent of the clothing purchased by Americans. In 1990, it produced nearly 50 percent. July/August 2014

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