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California Governor Jerry Brown signed into law this week Assembly Bill No. 22 (AB 22), which bans the use of pre-employment credit checks for many employers yet maintains exemptions for certain positions. Before this legislation, employers could request credit reports for employment reasons if they provided prior written notice of the request to the person for whom the information was being requested. Starting January 1, 2012, employers in California may only use consumer credit reports for the following positions:

1. A managerial position;
2. A position in the state Department of Justice;
3. A sworn peace officer or other law enforcement;
4. A position for which the information contained in the report is required by law to be disclosed or obtained;
5. A position that involves regular access to specified personal information for any purpose other than the routine solicitation and processing of credit card applications in a retail establishment;
6. A position in which the person is or would be a named signatory on the employer’s bank or credit card account, or authorized to transfer money or enter into financial contracts on the employer’s behalf;
7. A position that involves access to confidential or proprietary information; or
8. A position that involves regular access to $10,000 or more of cash.

If an employer requests a consumer report for one of these outlined exceptions, it must provide the person for whom the report was requested written notice. In addition, the employer needs to provide the specific reasons for obtaining the report as provided in the statute, along with a check box allowing the job applicant to request their own copy of the credit report at no charge.

California joins six other states, including Washington, Oregon, Illinois, Maryland, Connecticut and Hawaii, in restricting the use of credit reports by employers. Your Corporate Screening account representative can guide you through these new regulations as they are enacted and can recommend a solution that is right for your screening program.

Questions? Contact your Account Representative or Corporate Screening Support at 800-229-8606 and select option 3.