California to Restrict Employers' Use of Credit Reports Beginning 2012
Joining six other states, California will impose significant restrictions on an employer’s ability to obtain a credit report for employment purposes. The law becomes effective January 1, 2012.
California Assembly Bill 22, signed by Governor Jerry Brown, generally permits employers who are seeking to fill only specific, identified “exempt” positions to obtain and use credit reports to screen applicants and/or current employees. The use of the credit reports in other occupations generally is prohibited. Further, employers will be required to provide the employee or applicant with a disclosure statement setting forth the specific basis permitting the employer to obtain a credit report.
