legal-lawOn December, 15 2010, California Governor Arnold Schwarzenegger vetoed Assembly Bill 482, the passing of which would have effectively prohibited employers in the State of California from using credit reports in making employment-related decisions.

Essentially, Assembly Bill 482 would have halted employers from being allowed to utilize credit reports, with only two exceptions:

  1. When the use is “substantially job-related”, meaning that the position being sought would give the applicant direct access to cash, assets, or trade secrets and other confidential information, and;
  2. The position being sought is a Department of Justice position, a sworn peace officer managerial position 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”.

To avoid legal exposure, Employers Choice Screening strongly urges its clients to only make use of credit reports for employment decisions when the position being sought involves handling cash, checks and sensitive identifying information, such as Social Security numbers, dates of birth, driver’s license numbers, etc.
Employers Choice Screening is a long standing member of the National Association of Professional Background Screeners (NAPBS), a trade organization created to promote best practice industry standards. NAPBS was instrumental in lobbying against Assembly Bill 482 on behalf of its California members and protecting this valuable right for employers.

Employers Choice Screening Legislative Alerts are provided as a free service to clients, friends and subscribers of Employers Choice Screening, a division of Diversified Risk Management, Inc. The intent is to provide information of value to attorneys, human resource, security, and risk management professionals. The information contained in this e-mail alert is intended to provide useful information on the topics covered, but should not be construed as legal advice or a legal opinion. Your comments are appreciated.

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