Senator Elizabeth Warren (D-Mass.) introduced legislation on Tuesday that would ban the widespread practice of employers using prospective employees’ credit ratings as a basis for hiring, a practice she said is “one more way in which the system is rigged.”
A 2012 poll by the Society for Human Resource Management found that nearly half of all employers used credit checks in the hiring process.
Warren said that the legislation, the Equal Employment for All Act, “is about basic fairness.”
“A bad credit rating is far more often the result of unexpected medical costs, unemployment, economic downturns, or other bad breaks than it is a reflection on an individual’s character or abilities. Families have not fully recovered from the 2008 financial crisis, and too many Americans are still searching for jobs. This is about basic fairness—let people compete on the merits, not on whether they already have enough money to pay all their bills,” Warren stated.
Over 40 organizations, including the National Employment Law Project, SEIU and Dēmos, have endorsed the Act.
Describing the problem of employment credit checks, Amy Traub of Dēmos writes that their use “illegitimately obstructs access to employment.” Reporting errors in credit reports are common, Traub adds, and the use of the reports presents “a particular concern for people with disabilities and victims of domestic abuse.” She writes:
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