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Letter to Leaders & Swenson Insights

Credit Checks on Job Candidates.

The usual pre-employment testing criteria applies: the candidate must give their written approval, and the check should be conducted after a job offer is extended.

Although attorneys and the courts will ultimately decide the legality of such a check, employers should carefully evaluate whether or not to conduct such a check. My rule of thumb as a best practice is to always make sure all pre-job testing as a valid business reason. (A secretary does not need to lift 100-lb. boxes, for example).

Here are some guidelines to consider before implementing a credit check:

  1. Is there a business need? If an employee will be handling cash, or managing financial transactions, the answer would be yes. But if the open position is working in a warehouse, or as a telephone operator, my suggestion would be ‘no’.

  2. If you elect to conduct credit checks, you must be consistent: you can’t just single out one candidate for a credit check; all candidates applying for the selected positions must be checked.

  3. Follow the guidelines establish by the Fair Credit Reporting Act (FCRA).

  4. Notify the candidate when an adverse action is taken (such as not hiring) on the basis of such reports.

  5. You must also identify the company that provided the report, so that the accuracy and completeness of the report may be verified or contested by the candidate.

(Courtesy Tampa Bay Online, via McClatchy Newspapers.)

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