Employment Testing Blog

Employment Credit Report: Fair game during the hiring process?

  

  

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Last week's Wall Street Journal highlighted a practice that's becoming more common these days:  employment credit background checks for job applicants.  Most companies perform some type of criminal background search, but the use of employment credit checks has never been widespread.

As the article illustrates, these employment credit checks can uncover the financial problems that the unemployed are dealing with:   unpaid bills, late on mortgage payments, past due credit cards and more.  So these people are caught in an unemployment Catch-22:  They can't get a job because of their poor credit history, which was caused by them losing a job in the first place.

Is this fair to perform an employment credit check on these people?  Absolutely, because if you don't, then your company could be found liable for lack of due diligence if the your new star turns out to be a thief.   Such searches are necessary for employees that will have any type of financial management position where they have access to money or sensitive information.  

But what about employees who don't have access to such money or information?  More information is usually better when making a hiring decision.  It's better to know what your company will be getting.  And if you know about a poor credit history, you can give the applicant a chance to explain the circumstances that created that history.    Employment credit background searches are just like any other type of background search:  you don't want to do it, but you need to do it to protect yourself, your employees and your clients.