By Eric B. Meyer
Second verse, same as the first.
Back in March, I reported here that a bill introduced in the U.S. House of Representatives, known as the Equal Employment for All Act, would amend the Fair Credit Reporting Act to prohibit the use of consumer credit checks against prospective and current employees for the purposes of making adverse employment decisions.
This week, it was the Senate’s turn to get in on the act — the Equal Employment for All Act, that is.
Senate version same as House bill
The December 2013 version introduced in the Senate is basically the same as the House version from earlier this year.
In this press release, bill sponsor Sen. Elizabeth Warren, D-MA, noted that “research has shown that an individual’s credit rating has little to no correlation with his or her ability to be successful in the workplace.” A “fact sheet” released by her office further notes that “credit reports are not always accurate, and poor credit disproportionately targets women, minorities, and those already struggling financially.”
In 2009, the EEOC announced a lawsuit against in which it alleged that an employer unlawfully “rejected job applicants based on their credit history and if they have had one or more of various types of criminal charges or convictions.”
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Unlikely that this version will become law
However, earlier this year, a Maryland federal court dismissed that suit, concluding that the EEOC had failed to demonstrate that credit checks have a disparate impact on minorities.
Indeed, employers credit check only for positions for financial responsibility is paramount or those involving access to confidential information. A SHRM survey from last year indicated that poor credit history is not a barrier to hiring.
My best guess is that this bill does not pass.
This was originally published on Eric B. Meyer’s blog, The Employer Handbook.