Employment credit checks.

• Author: Morton, Heather
• Position: TRENDS & TRANSITIONS

Picture yourself in this situation: Laid-off two years ago, you have used all your savings to pay bills and are starting to fall behind on some. Finally, a job interview looks promising until they question your credit rating. Should that matter?

Legislators in seven states--California, Connecticut, Hawaii, Illinois, Maryland, Oregon and Washington say no, unless an employee's or job candidate's credit information is integral to the potential job. Washington lawmakers were the first to limit the use of credit information in employment decisions in 2007. Hawaii passed similar legislation in 2009. Illinois and Oregon followed in 2010, and California, Connecticut and Maryland followed in 2011. Similar bills are pending in more than 15 states and the District of Columbia.

Supporters of these laws to limit the use of credit reports argue that consumer reports are not good predictors of job performance and employability, and do not provide employers with the information to determine a job candidate's ability to effectively perform a job. They point out that consumer reports can contain errors, and that reliance on credit information may disproportionately harm female and minority job applicants. They...