Your employment history and your credit history are related in that they both have to do with money, but most people think of them as completely separate versions of a person’s life story, and perhaps completely separate sources of stress. Reentering the workforce is the first step to paying down the debts you incurred while you were out of a job; wouldn’t it be unfair if employers refused to hire you simply because of your history of financial hardship? The ways in which your credit history and other aspects of your life outside of work can affect your employment and job searches are more complicated than they might seem. Employers and prospective employers cannot investigate details of your life that you normally have the right to keep private except under specific circumstances. If you have questions about credit reporting, background checks, and your rights as a consumer and an employee, contact the Minneapolis Fair Credit Reporting Act lawyers at HKM Employment Attorneys LLP.
What Does Credit Reporting Have to Do With Employment?
The federal Fair Credit Reporting Act (FCRA) governs the release of reports that include information about a lot more than just your credit score. When you apply for a major financial commitment, such as a car loan or a lease on an apartment, the lender or leasing office will conduct a credit check to investigate your history of repaying borrowed money and, in some cases, your employment and income history. Your relationship with your employer is, undoubtedly, different from your relationship with a landlord; your employer is responsible for paying you, not the other way around.
Current and prospective employers have the right to conduct background checks into your financial history and other aspects of your previous activities. They do this to determine whether you are trustworthy to perform the duties associated with your job. Having a troubled credit history probably will not be as much of a liability if you are applying for a job in construction as it will if you are applying for a management job at a bank.
What are Prospective Employers Allowed to Find Out About You in a Background Check?
Prospective employers can conduct extensive background checks before hiring an employee; what they are looking for depends on the job for which the candidate is applying. These are some of the kinds of information they can request in a consumer report about the job applicant:
- Employment records, showing the names of your previous employers and how long you worked for them
- Driving records, including speeding tickets and driver’s license suspensions
- Criminal records, unless the records are from before you turned 18 or unless you have had them expunged
- Which schools and universities you attended, your dates of attendance, and when you graduated
- Professional licenses you hold, when they were issued, and whether they have ever been suspended
For federal jobs with security clearances, an even more extensive background check is part of the job application process.
Your Rights Under the Fair Credit Reporting Act
The law grants consumers the right not to have their credit history and the other consumer reports listed above shared with anyone unless there is a good reason (such as a pre-employment background check), and unless your employer follows the required procedures for notifying you about the background check. According to the FCRA, the legally required procedures are as follows:
Before requesting and obtaining a consumer report about the job applicant or employee, the employer must obtain the applicant or employee’s written consent to do so. This usually takes the form of the applicant signing and submitting a background check consent form with the job application. Minnesota law also requires employers to include written notices about credit reporting rights and obligations to be included in the job application.
After the employer receives the report and reviews it, the employer must notify the applicant or employee if the report contains enough negative information that the employer is considering taking “adverse action,” such as not extending a job offer to the applicant or terminating the employment of an employee already hired. In doing so, the employer must also attach a copy of the consumer report that made the employer consider taking adverse action. The employer must also attach a summary of the applicant or employee’s FCRA rights and give the employee a sufficient amount of time to remedy the situation.
If the employee takes adverse action based on the consumer report, they must notify the employee or applicant of this decision in writing.
Under certain circumstances, FCRA enables employers to obtain “investigative consumer reports,” which are more detailed than the usual consumer reports generated in pre-employment background checks. Investigative reports involve interviews with the applicant’s neighbors, former work supervisors, and other people who might have knowledge that would inform the employer about the applicant’s suitability for the job.
Minnesota’s Human Rights Act contains additional protections related to credit reporting. Lenders are not allowed to penalize applicants because of race, religion, gender, marital status, sexual orientation, or disability. If creditors have discriminated against you, and this has adversely affected your pre-employment background check, contact a lawyer.
Can Employers Refuse to Hire You Because of Retail Therapy or Road Rage?
For almost anyone, a thorough record of every financial and employment-related decision you have ever made would not present an entirely flattering picture, but how much should you worry about mistakes that you have learned from turning consumer reports about you into a liability. Should the fact that you lived beyond your means in your 20s cost you a job in your 40s? Do your speeding tickets from five years ago make you unsuitable for a job as a barista? Usually, they do not. You have legal remedies available to you if you think that the adverse action taken against you by an employer in response to a consumer report about you was unjustified. A Minneapolis employment lawyer can help you develop a strategy for dealing with unjustified adverse actions by employers in response to your consumer reports.
Contact a Minneapolis Employment Lawyer About Consumer Reporting Disputes
Employers should not go out of their way to punish job applicants for minor mistakes made long ago. Sometimes employers use adverse actions following background checks as a thinly veiled form of discrimination, and an employment lawyer can help you demonstrate this. Contact the Minneapolis Fair Credit Reporting Act lawyers at HKM Employment Attorneys LLP to set up a consultation.
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