August 7, 2009 - Posted by Connie Lam
New legislation in Congress would prohibit employers from accessing potential employees' consumer credit reports for the purpose of making hiring decisions.
Some employers use credit reports in hiring due to a belief that credit history is an indicator of future job performance, though research has shown this to be false. Nevertheless, the number of employers using applicants' personal financial information in hiring has risen to 43 percent in recent years.
Not only is credit history irrelevant to job performance, but use of consumer credit reports also discriminates against low-income people and minorities with low credit scores, which could prevent them from getting jobs that they need.
One-third of people earning less than $45,000 a year have poor credit. Also, according to a 2004 study, the average credit scores of African Americans and Latinos are lower than that of Whites.
"There is no social science to support the assumption that credit histories reliably predict success on the job…this law would help to stop the vicious cycle of those who seek new job opportunities to pay their creditors but cannot obtain work because they lost a job and have been unable to pay their creditors," said Audrey Wiggins, director of the Lawyers' Committee for Civil Rights Under Law's Employment Discrimination.
Categories: Workers' Rights
