Avoid using applicants’ credit and criminal histories: pt. 2

Last week we talked about the use of criminal and credit histories in the hiring process. While federal law does not explicitly bar the use of this information for the purpose of hiring, relying on these records may leave employers vulnerable to discrimination claims. For example, policies that involve asking applicants about criminal histories may have a disparate impact on applicants of color.

Similar problems arise when applicants are asked about their credit scores or other financial history. Not only are these reports prone to inaccuracy, but they tend to have a disparate impact on minorities and women. In addition, many events that can affect credit ratings – such as cosigning a loan, identity theft, a death in the family or divorce – have no impact on an applicant’s ability to do a job.

If you are a business owner and have questions about hiring and employment, the laws and regulations may be overwhelming. State and federal laws govern how you can make hiring decisions, the wages and benefits you must provide and when you can fire someone. It may feel like every move you make may run afoul of these complex rules.

The good news is you don’t need to go at it alone. Consider speaking with an experienced business and commercial law attorney with experience in employment law matters. He or she can help you review your policies to make sure they comply with relevant laws and advise you about the best course of action for you and your business.

Source: NorthJersey.com, “Using criminal records, credit ratings is risky business in hiring,” Linda Moss, Jan. 22, 2013

To learn more about legal issues facing New Jersey businesses, please visit our website.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.