It’s a hill that feels impossible to climb: You have made some financial mistakes in the past, and your credit suffered as a result. Since then, you’ve gone back to school, worked hard and set some financial goals. Even so, you are having a tough time finding a higher-paying job, even though you interview well. In each of the positions, the hiring process got far enough along to require a pre-employment background check. You don’t have a criminal record. You’ve made strides and cleaned up your finances. But are those old red flags on your credit report to blame for you not getting ahead in your career? And why is nobody telling you?
In California, an employer’s ability to require credit reports for hiring purposes is limited under the California Consumer Credit Reporting Agencies Act and the Investigative Consumer Reporting Agencies Act. The laws protect potential employees from unfair background checks. They can only affect a person’s ability to get a job in certain positions, like law enforcement.
California requires an employer provide written notice to the person whose is being checked out. The employee can request a copy of the report at no charge, and obtain the name and address of any agency that provided the background check. Credit agencies cannot include certain information in their credit reports under the state code, including bankruptcies that are more than a decade old, judgments that are more than seven years old, paid tax liens that are more than seven years old, according to the state code.
When an employer is obtaining an “investigative” consumer report for employment purposes other than promotion or reassignment, then the employer must notify the applicant or employee in writing within three days that an investigative consumer report is being requested. Notification must state that the investigative consumer report is being requested regarding the employee’s or applicant’s character, general reputation, personal characteristics and mode of living. The notice must also contain the name of the consumer reporting agency conducting the investigation, as well as a summary of the contents of California Civil Code §1786.22.
If you feel that your rights under the California Consumer Credit Reporting Agencies Act and the Investigative Consumer Reporting Agencies Act are being violated, it’s important to speak to an experienced California employment attorney as soon as possible.