Can a simple credit check provide a comprehensive understanding of a potential employee? Can such a check differentiate a bad employee from a good one? According to a good number of insights from ordinary employers, conducting a credit check is important in selecting the suitable candidate for a given job position.
In fact, a significant number of such employers argue that conducting such checks is crucial towards character verification and counter-checking whatever is on a candidate’s resume. While such allegations may be true to some point, they are in most cases biased and unethical. Also, the U.S. Equal Employment Opportunity Commission (EEOC) prevents employers from discriminating against candidates based on their financial information despite having the right to ask for such information.
The Significance of Credit Checks
Before demystifying whether a background credit check is significant or not, it is important to understand why employers may run such checks. Many employers run credit checks for character verification. In simple terms, they use such checks to confirm the details on your resume as dictated by the nature of the job position. For instance, numerous top jobs in banking, real estate, and security sectors need such checks not only for verification purposes but also to quantify a candidate’s economic well-being.
Likewise, some employers can use credit information when evaluating two candidates for the same position. A common argument, in this case, is that a credit evaluation may reveal a candidate’s financial stresses that may, in turn, affect work performance or present a distraction. For detailed information on how employers use credit checks and whether it is legal, please get in touch with an attorney from HKM Employment Attorneys LLP.
In both the above cases, it is clear that an employer may legally run a credit check before hiring. Nonetheless, it is worth to note that such credit checks are not enough during the screening process and do not reflect a candidate’s abilities.
Important to Note
A credit history may offer some baseline financial information about an employee but it is not enough to validate a job rejection. In fact, such information highlights the economic struggles of the ordinary American and is irrelevant in determining whether a candidate is hard-working or not. It is for this reason that quite a significant number of legislative acts are being implemented in an attempt to control a culture of employment discrimination on the basis of credit information, thus making it illegal for employers to run credit checks.
While not all states have passed acts on the use of credit information in evaluating a candidate, it is illegal for an employer to do so without the consent of the candidate. Likewise, acts such as The Oregon Legislative Assembly Act 659A.320, prohibit the use of credit history information in the employment screening process and further highlight the conditions under which an employer may run a credit check for a potential candidate. Such an act serves to discourage employers from using such checks to reject skilled and qualified candidates and levels the platform for all candidates.
To learn more or get help about employer credit checks, please get in touch with HKM Employment Attorneys LLP today or call us at 503-389-1130.