Yesterday, Illinois Governor Pat Quinn signed a bill that takes away the right of the state’s employers to review a job candidate’s credit report as part of the employment screening process. Or does it? The new law will officially take affect on January 1, 2011, but is sure to create confusion because while it bans the use of credit reports for most, it allows their use for certain industries and positions. Check out some of the exemptions: “those with management responsibility, signing authority over as little as $100 or access to personal, financial and confidential information. It exempts law enforcement and financial institutions and has no effect on other kinds of background checks.” So is it illegal to run credit reports or not?
This move is sure to raise concerns in the business community among those who were using these reports responsibly to protect themselves and their customers alike.
This morning, the Chicago Tribune wrote a scathing editorial about the impact this has on Illinois businesses.
Quinn signed a bill making it illegal for them to use credit histories to evaluate job seekers.
Do companies need this information? That doesn’t matter now. The governor and legislators have substituted their judgment for the judgment of the companies that actually put people to work in this state.
Why would an employer want to run a credit report on you? A simple background check can make a difference. Some experts say there is evidence that workplace theft and fraud correlates with the financial distress indicated by bad credit. Moreover, it’s a useful tool for verifying work histories and other resume information.
The bill that Quinn has signed into law acknowledges as much. It allows employers to do credit checks in cases of hiring and promotion for many posts, including those with management responsibility, signing authority over as little as $100 or access to personal, financial and confidential information. It exempts law enforcement and financial institutions and has no effect on other kinds of background checks.
In practice, the new law will introduce a batch of red tape. It won’t create a single new job. It will simply curb the discretion of an employer who might prefer to hire someone who has paid his bills over someone who hasn’t.
Quinn says it will put a stop to the practice of denying jobs and promotions “based on information that is not an indicator of a person’s character or ability to do a job well.” Evidently, our governor thinks those responsible for hiring and promotion base their decisions on irrelevant criteria, and everybody else needs to be protected from them.
A few states have passed similar measures, and other legislatures are considering them, mostly on the theory that someone who fell behind on their bills during the terrible recession shouldn’t be barred from a job for that reason. Guess what? Employers know we had a terrible recession. They know that good people sometimes fall behind because of the loss of a job or a health crisis. But they are now prohibited from making such judgment calls.
There’s no reason why those recruiting workers shouldn’t do so with the additional confidence that credit reports might provide. Illinois, with 10.4 percent unemployment, is sending one more signal that it doesn’t trust the people who put people to work.
I would agree if the law is intrepreted to say that the Credit report should not be conducted until AFTER an applicant becomes a chosen candidate as part of the hiring process. As with Fingerprinting, everyone knows the fingerprint screening can only take place once a candidate is “offered the the job and accepts” then can be fingerprinted. I would like to see the same sort of process for the credit checks. Instead of using the credit check to weed out candidates upon initial resume review, instead only check credit after an initial interview is conducted and or a job offer is made.
I DO have a problem with credit checks. People make too many assumptions and judgements across the board against people that have no bearing on whatever the issue is at hand.
The premise that if you are having financial difficulty you are at a higher temptation to be dishonest/thief is ludicrous. Just because you are poor or having financial difficulty does NOT make you a thief!
Nor does it mean they are necessarily less able to manage well.
People need to be chosen on the merits of their qualifications related to that position.
AND sometimes – people just need to have a chance. (I would have loved to have the chance given to so many of the persons who are really guilty of white-collar crime)
Peace and God Bless