In a move that will make it more difficult for employers to make informed hiring decisions, Governor Jerry Brown today signed Assembly Bill 22 (Mendoza, D-Artesia) into law.
Assembly Bill 22 makes it illegal for most employers to run a credit check on current or prospective employees, unless the information in the report is “substantially job-related,” and for a managerial position.
Credit reports are an important tool for employers when evaluating the character of people whom they are considering hiring, or promoting, especially for jobs where employees will have access to cash, valuable equipment, trade secrets or their customers’ personal information. There are numerous existing restrictions on how employers conduct such reports, in order to protect applicants and employees.
“This law is a wholly unreasonable restriction on employers,” said Senate Republican Leader Bob Dutton (Rancho Cucamonga). “It is yet another example of how Democrats talk about the need to help job creators, but turn around and do everything they can to make staying in business more difficult in California.”
In an opinion piece written on the subject of overregulation for FoxandHoundsDaily.com, Loren Kaye, President of the California Foundation for Commerce and Education, said that AB 22 “would restrict the ability to use consumer credit reports for legitimate employment purposes, hamstringing employers at just the time we want to encourage hiring.”
“This bill is a lose-lose for Californians,” said Dutton. “It will not only impede the hiring process, it will make workplaces less safe and customers’ personal information less secure.”
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