California Bill to Limit Credit Reports Vetoed

Jason Morris

We reported last month that California Assembly Bill 2918 was dangerously close to becoming a critical issue for those who employ people in California. The bill sought to severely restrict employers’ ability to use Credit Reports when making hiring decisions.

The bill made it all the way to Governor Arnold Schwarzenegger’s desk and in a stunning turn of events, he vetoed it saying, “This bill would significantly increase businesses’ exposure to civil actions over the use of credit checks. Further, the bill would increase administrative costs to those employers who must legitimately use credit reports as a screening tool by requiring that the employer first abide by its onerous requirements. California employers and businesses have inherent needs to obtain information about applicants for employment. The bill would become a new employer obstacle to the use of available information needed to make hiring decisions.”

According to the National Association of Professional Background Screeners (NAPBS) “This bill would prohibit the user of a consumer credit report, with the exception of certain financial institutions, from obtaining a consumer credit report for employment purposes unless the information is (1) substantially job related, meaning that the information in the consumer credit report relates to the position for which the person who is the subject of the report is being evaluated because the position is a highly compensated or managerial one , or (2) required by law to be disclosed to or obtained by the user of the report.

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Jason Morris

President & Chief Operating Officer at EmployeeScreenIQ
A veteran screening and risk management professional, Jason Morris founded EmployeeScreenIQ in 1999 and acts as the company’s chief operating officer and president. Morris is a frequent speaker delivering captivating, interactive discussions on background checks, global screening, recruitment and staffing. He educates audiences in best practice initiatives as they relate to organizational employment screening programs. Morris has been quoted in numerous business and industry publications including The Wall Street Journal, MSNBC.com, USA Today, New York Times, among others. He is also a licensed private investigator in the states of Ohio, Illinois, New Jersey, Texas, Arizona and Nevada.
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