Maryland joins Hawaii, Washington, Oregon and Illinois as states that recently passed laws regulating the use of credit history-related information by employers for employment purposes. The Maryland law restricts the use of credit reports and credit history information unless specified conditions are met.
Employment Practices Solutions, Inc. (EPS), a human resources consulting organization, offers the following tips for employers in an article titled:
To Check or Not to Check: The Pros and Cons of Using Credit Reports in the Hiring Process
If an employer currently uses, or is contemplating the use of, credit histories to evaluate applicants, they should consider the following:
- Is there a clear policy or practice regarding what positions will include a consideration of credit histories?
- Are they used consistently for all applicants to those positions?
- Is there a sound business reason to use the credit information for each of the positions that they are reviewing it for? That is, is it job-related? (i.e., will the position require the handling of money or assets, making fiduciary decisions, access to trade secrets or confidential information?)
- Are there any applicable laws in the states in which they have employees? If so, is the employer considered a “covered employer” and are their current policies and practices consistent with such laws?
- Are they getting the credit information from a reliable source?
- Does the credit information have a record of reliability?
- Have their HR professionals and/or hiring managers been trained in how to use and/or interpret credit reports?
- Are applicants being given the opportunity to review and respond to the information contained in the credit reports or are all applicants with a weak credit record screened out?
- Is the credit history used as a deciding factor between applicants with equal qualifications?
- At what point in the selection process is it being used?
Related Posts:
- How Credit Checks Affect The Decision To Hire – A poll by SHRM provides an up-to-date look at the impact of credit checks on the decision to hire. It looks at factors that have the most impact on hiring decisions, the reasons that organizations conduct credit checks, the types of job candidates most likely to be subject to credit checks and more.
- Don’t Ban Pre-Employment Credit Checks – Evil HR Lady (Suzanne Lucas) offers some common-sense advice for employers on how to properly use credit reports.
Photo credit: shawnzrossi
