Dive Brief:
- D.C. Mayor Muriel Bowser signed a bill barring employers from making credit check inquiries on potential hires, reports the National Law Review. The D.C. City Council passed the Fair Credit in Employment Amendment Act of 2016 on Dec. 20 before submitting it to the mayor for her signature.
- The bill essentially prohibits employers from directly or indirectly requiring, requesting, suggesting or causing any employee or job applicant to submit credit information. It also prevents employers from making credit checks a condition of employment.
- The bill moves from the mayor’s desk to Congress for a 30-day review. Lawmakers in both chambers may either allow the law to pass or issue a joint resolution to overturn the bill; the latter requires a signature from the President.
Dive Insight:
Running credit checks makes practical sense for jobs in accounting, finance or other positions that require employees to handle money. But most positions don’t merit inquiries into employees’ personal finances or the high cost of conducting investigations.
The movement to end credit history questions aims to end discrimination against minority job applicants, who may be at a disadvantage when employers eliminate candidates with bad credit. Whether such laws actually serve that purpose is by no means a settled debate.
Employers should set clear background check policies. They should also be familiar with local and state ordinances requiring credit check restrictions to avoid penalties for noncompliance as well as lawsuits from affected employees and job candidates.
