WI Assemblyman Proposes Law Banning Job Discrimination Against Persons with Bad Credi

[BrokeBob]

It's been a bit of a catch-22 in our society. A person gets laid off from work, or has a prolonged illness, or a business failure or a divorce. Maxes out the credit cards. Then, that same person cannot get a job to straighten out the mess, because many companies won't hire hom/her with a bad credit score. At least some in the Wisconsin Assembly are on the case.

Fellow cheeseheads, contact your state legislators!



http://www.madison.com/tct/business/463343

Removing barriers: Bill would bar job denial over bad credit history
Kim Ukura — 8/28/2009 9:07 am

Wisconsin job seekers are used to seeing the statement that employers cannot discriminate on the basis of age, race, sex, creed, disability, marital status, ancestry, sexual orientation, arrest record or military service, among other things, but under a bill authored by state Rep. Kim Hixson, D-Whitewater, credit history would be added to the list.

Assembly Bill 367 would prohibit making hiring decisions based on an individual's credit history unless it is "substantially related" to the job or if a needed license or bonding depends on a good credit score.

[trueq]

but what exactly does "substantially related" mean?

I was recently responsible for choosing our village administrator, would that be "substantially related"?

I don't want this bill to inadvertantly inhibit accountability for government staff.

I guess the question arises, is it a problem if a village/city administrator, running a municipality, has bad credit from an unforseen circumstance?

Do voters care?

[BrokeBob]

Aren't loosely worded laws wonderful?

I have no objections if a person being considered for a job with embezzlement potential is rejected because of a bad credit score. OTOH, if the village is considering hiring an IT guy, and the best candidate's credit rating hit the skids after being laid off so the former company could save money by hiring an H1-B visa employee from India, is that fair?

I gather about 35% of companies now screen credit scores for EVERYONE. That's the CFO and the IT staff and everyone else. I was out of work for about 8 months before I got my current job, and I packed up my stuff to move to Wisconsin. (I did work part time to prevent gaps in the resume, but all that did was extend my benifits. The money I earned was almost esactly the same as what I lost from unemployment working part time.) When I opened up a bank account, I discovered that an illegal alien woman in Chcago was using my SS# to kite checks. If my company had a policy of never hiring employees with less than perfect credit scores, I may have had a bit of trouble.

[jq26]

Just what we need. Another protected class.

I actually think this is a really poor idea. Put yourself in the shoes of an employer. You want to employ a few people. You can't check credit?

[Methuss]

A bill in Congress (HR 3149) was introduced on July 9, 2009 which would ban the use of consumer credit reports in hiring on a National level by amending the FCRA to prohibit credit reports being used that way.

The HR bill has some teeth too, since it amends section 604, leaving a private right of action open to people who are discriminated in employment due to poor credit scores. There are some reasonable exceptions, such as if you work for a financial institution or for government, the new law would not apply to you, but it is a step in the right direction. Credit reports are supposed to be used for determining if a person should be lent money...not if you should be hired or not.

[trueq]

I have never checked anyone's credit. We have elaborate cash controls in place.

This law will not effect employers, like me, that do not check.

The "grey" area will be what does "substantially related" mean?

This is where employers can step in the "duty patch".

Government workers are one of the most protected classes because of the government unions. I could see a motivated government union suing over that phrase when the hiring arm of the unit of government is checking credit of any government worker as a condition of hire.

[jq26]

Originally Posted by trueq

I have never checked anyone's credit. We have elaborate cash controls in place.

That's nice for you in particular, but not everyone has that luxury.

And how is it that one can conclude credit reports are only for credit transactions? I'd certainly like to know what someone's credit history looks like if I was hiring someone to be in my home or handled cash. The absence of a criminal history isn't necessarily indicative of responsibility or potential motive.

Would everyone be so willing to pass these laws if their grandmother was in a nursing home where they could no longer check credit on the nursing aides and grandma's valuable heirlooms started going missing? Seems to me these same people would be lining up to sue for negligent hiring.

[trueq]

No doubt the term "substantially related" could be applied to those instances...

that is, until someone sues, who says its not "substantially related"...

Look at the bright side.

Full employment for lawyers.

[LadynRed]

The absence of a criminal history isn't necessarily indicative of responsibility or potential motive.

True enough. However, having a low credit score, or even bad credit, is not necessarily indicative of poor responsibility either. Those people that lose jobs, and their health insurance with it, then need healthcare and wind up with their finances in ruin should not be tagged as 'financially irresponsible' because I'd bet for the most part they probably aren't.

You could also have a perfectly responsible and respectable person with great credit turn into a thief for reasons that are not readily apparent, it happens. I don't believe that denying someone a job because you don't like what their credit looks like is the way to do things.

It's almost as bad as the car insurance industry who says I'm suddenly a bad driver because I filed for bankruptcy - when I've had a clean driving record for more than 30 years!!!

[fchappell]

It's about time that legislation like this is introduced. The bottom line is that credit reports were originally designed to assess a persons credit-worthiness to obtain a loan. Now the situation is out of control with credit reports. Many people especially within the last few years have fallen on hard financial times through no fault of their own. They shouldn't be discriminated against when it comes to the prospect of obtaining a job. In my opinion a persons bad credit should not be used to judge a persons character. There has been so much dishonesty and cost gouging with credit card companies that has caused people to be in a bad credit situation. Congress passed legislation to limit what credit card companies can do with fees, unfair charges, interest rates, etc. They did this because it was adversely affecting too many people into bad credit situations. Now it's time that congress passes legislation to correct the problem with the abuse of credit reports. In this case the credit bureaus and credit report companies are to blame for marketing their product to a sector that the product was never designed to be used with in the first place.

[willingtocope]

Originally Posted by fchappell

...credit reports were originally designed to assess a persons credit-worthiness to obtain a loan....

Not quite the way I'd phrase it. Credit reports are intended to tell a creditor what are their chances of making money by lending money to this individual. Its about their risk. Higher risk usually means higher interest, and a higher likelyhood of being able to charge interest and penalties. CCs for example, don't really want their money back...they want you to carry a balance...so they can charge interest.

[fchappell]

I agree with you willingtocope... I was just trying to merely state that credit reports really only had one intended purpose in the beginning and that is what they were created for. Now their scope has become much broader and has adversely affected many good individuals who fell into bad luck through no fault of their own and or fell victim to the many predatory lending institutions out there.

[Methuss]

Originally Posted by LadynRed

True enough. However, having a low credit score, or even bad credit, is not necessarily indicative of poor responsibility either.

Nor is a poor credit score indicative of a dishonest person. As LadynRed points out bad luck can be all it is. A foreclosure doesn't mean a person is any more or less likely to steal. As a matter of record, many of the worst crooks who stole millions these past two years had impeccable credit histories personally, but they were dishonest on a massive scale nevertheless.

The fact that low credit scores are being used to pre-judge a person's honesty (or to simply boost profit in the case of insurance companies*; another practice that should be banned) is all the more reason to abolish this practice. If a person is dishonest, that will show up in other background checks such as employment history and criminal records.

*Claiming it is to determine if a persona pays their premium is bull-crap. Premiums are always prepaid. If you don't pay the premium by the due date, the policy lapses and becomes void. So no, it's not about who pays the insurance bill, it is about upcharging the premium.

[phillyguy205]

I sincerely hope the Equal Employment for All Act passes. Sure, credit checks might be useful in some cases, but often it's ridiculous to expect good credit to be correlated with good job performance. Further, credit checks often put potential employees in a catch-22. If they don't have a job, they are more likely to have poor credit and thus more likely to remain unemployed. People of color on average have lower credit, making this a discriminatory practice. Not to mention that credit reports more often than not contain inaccuracies.

If you would like to help us stop the often unfair and discriminatory practice of pre-employment credit checks, please join us.

http://www.facebook.com/group.php?gid=98502858415

http://www.creditcatch22.org/

[trueq]

I'm really warming to this State proposal despite the ambiguous language.

I can agree with the wide sentiment for a majority of occupations that credit check should not be a determining hiring factor.

My one question.

In the scenerio I propose. Hiring a City Manager in a position of public trust.

Should a credit check be NO factor at all?

I have a hard time, in such a scenerio, figuring out how, that its in the public's interest, that a credit check NOT be done on the applicant.

[fchappell]

Originally Posted by jq26

Just what we need. Another protected class.

I actually think this is a really poor idea. Put yourself in the shoes of an employer. You want to employ a few people. You can't check credit?

Obviously, you have never experienced a situation where you faced a mountain of bills you can't pay because of unemployment or unexpected illness, etc. Put yourself in the shoes of someone who has been unfortunate in these circumstances... Credit reports were never available for employers to check just 20 years ago. Why is it necessary now? Just because it is available?

I hope that HR 3149 passes to get rid of all forms of discrmination in the hiring process once and for all !!

[jq26]

Originally Posted by fchappell

Put yourself in the shoes of someone who has been unfortunate in these circumstances... Credit reports were never available for employers to check just 20 years ago. Why is it necessary now? Just because it is available?

You couldn't be more wrong. I wouldn't jump to conclusions there chappell. I just don't agree with your nanny state solution- it perpetuates the victimhood mentality that seems to be pervasive today. When you walk into an interview, is the suit that you wear truly indicative of what type of job you can do? Is the reference from your last employer going to be spot on when it comes to character? How about the font and layout of your resume? What about the shine on your shoes or the way you speak? All these factors can and are used to discriminate between applicants. They are all pieces of a puzzle that fit together to attempt to choose one applicant over another. A credit report is no different. It gives an employer clues but is not dispositive of any particular issue. Should we then forbid an employer from using the appearance of an applicants shoes and suit in their hiring decision? Surely on average, those who have experienced recent unemployment or long bouts of unanticipated illness are less likely to be able to spend the money on new clothes for an interview.

Additionally, the line between credit and employment is blurred. When I check the credit of tenants, I am looking for clues that they are trustworthy enough to send me rent checks every month. If I were to hire someone domestically, I am looking for clues that they are trustworthy enough to show up everyday and take care of their responsibilities. Not much of a difference really. In the end, it is about trust.

[Bigwoodystyl]

Originally Posted by phillyguy205

...

People of color on average have lower credit, making this a discriminatory practice.

...

I wish I were colored so I could say asinine things like this and nobody would bat an eye.

[jq26]

Originally Posted by Bigwoodystyl

I wish I were colored so I could say asinine things like this and nobody would bat an eye.

This is the underlying premise of disparate impact Title VII claims. Post hoc ergo propter hoc.

[Bigwoodystyl]

Hmm... well, I didn't know that. I'm not an HR guy and I'm not a lawyer. FWIW, I don't think it makes it any less asinine. Relating disparate impact to this topic at hand and going back to your discussion of trust, I'd argue that credit reports are a business necessity; further, without a doubt they are facially neutral.

Now that I've read about Disparate Impact and Title VII and subsequent case law (Griggs), I was going to go outside and take a walk, as disgusted as ever.

But, then I read more case law (Ricci) and it made me feel a little better. Not good, just better...