discrediting employment credit checks webinar · people are denied jobs because of credit checks...

Discrediting Employment Credit

Checks Webinar

www.policymattersohio.org

Ohio CASH stands for Creating Assets, Savings and Hope, and is a project of Policy Matters Ohio. With partners, we do research and outreach to protect consumers, increase income, and help people build savings and assets. Our goal is to improve the financial and economic conditions for low- and moderate-income families and communities. Only by helping families build, save and protect their income can we end the cycle of poverty.

Social service organizations, housing counseling groups, faith-based organizations, free tax preparation coalitions, financial institutions, and others are members of the Ohio CASH coalition.



Webinar Goals

• Inform and educate stakeholders serving low-and moderate income families about the practice of employment credit checks and its potential impact on their clients

• Demonstrate how the practice prevents qualified workers from gaining employment

• Share strategies for advocacy to end this practice

• Identify and organize a group of stakeholders willing to develop, implement, and support an advocacy strategy to end this practice in Ohio


PresentersMelissa Broome, Senior Policy Advocate

Job Opportunities Task Force

Amy Traub, Senior Policy Analyst,

Demos

Kalitha Williams, Policy Liaison for Asset

Building,

Policy Matters Ohio


Presenter

Amy Traub

Senior Policy Analyst

Demos

Demos is a public policy organization working for an America where we all have

an equal say in our democracy and an equal chance in our economy.

In some countries, credit reporting is a public function. In

the U.S. it’s afor-profit industry.

Employment credit checks are common

13%

47%

40%

All job candidates

Selected job candidates

Does your organization, or an agency hired by your organization, conduct credit background checks for any job candidates by reviewing the candidates’

Source: Society for Human Resources Management,

Prevalence of Employment Credit Checks

Among survey respondents who were unemployed, one in four recall that a prospective employer requested a credit check as part of a job application.

People are denied jobs because of credit checks

• One in ten participants in our survey who are unemployed have been told that they would not be hired for a job because of the information in their credit report.

• One in seven survey participants with credit scores under 620 have been told they would not be hired for a job because of information in their credit report.

The Pitch to Employers

“Protect your finances — run a credit check for jobs with to be SURE you’re trusting the right person… you gain valuable insights into not only that person’s financial stability, but also their sense of responsibility. Since stability and responsibility are two qualities high on any employer’s hiring list, an employee credit check offers the perfect way to get that indicator of possible future behavior.” -Accuscreen.com

“At this point we don’t have any research to show any statistical correlation between what’s in somebody’s credit report and their job performance or their likelihood to commit fraud.”

-TransUnion lobbyist Eric Rosenberg, 2010

The Reality

Employment credit checks are discriminatory

0 20 40 60 80 100 120

White

African American

Latino

Excellent

Good

Fair

Poor

Don't know/noanswer

Which best describes your credit

Impact of Credit Checks on Employees and Job Seekers

• Employment credit checks are discriminatory

• Credit checks penalize bad luck• Low-income households borrowing to make ends

meet

• Medical debt

• Unemployment

• Identity theft

• Credit reporting errors

• Credit checks are an invasion of privacy

States and cities are taking action

• Laws passed in Connecticut, California, Illinois, Maryland, Vermont, Hawaii, Oregon, and Washington State.

• Municipal law in Hartford, CT; considered in Chicago, New York and the District of Columbia.

• Federal bill pending in Congress: H.R. 321 the Equal Employment for All Act

Remember them?


Presenter

Melissa Broome

Senior Policy Advocate



JOTF is an independent nonprofit workforce intermediary that develops and

advocates policies and programs to increase the skills, job opportunities, and incomes of low-skill, low-income workers

and job seekers.

• Program Development

• Research

• Public Education

• Advocacy

Melissa Broome Senior Policy Advocate

Job Applicant Fairness Act

• First introduced during 2010 session – “This is a solution looking for a problem.” – Senate “sponsor problem” – Died in House Economic Matters Committee

• Subsequently introduced & passed in Session 2011 – Popular issue; multiple bills – Significant press – Senate Finance Chairman established work group – Compromise amendments introduced

Statewide Coalition of 58 Organizations - 2011

Advocates for Children and Youth Allegany County Human Resources Development Commission

American Civil Liberties Union Associated Black Charities

Baltimore-Washington Conference of the United Methodist Church Baltimore Workforce Investment Board (BWIB)

CASA de Maryland Center for Urban Families

Civic Frame Community Action Council of Howard County

DemosDomestic Violence Center of Howard County

Episcopal Diocese of Maryland Equality Maryland

Frederick County Commission for Women Healthcare for the Homeless

Homeless Persons Representation Project House of Ruth Maryland

Human Rights Commission of Howard County Humanim

Job Opportunities Task Force Lawyers’ Committee for Civil Rights

League of Women Voters Legislative Black Caucus of Maryland

Legislative Women’s Caucus of Maryland Lifestyles of Southern Maryland Maryland Alliance for the Poor

Maryland Asset Building & Community Development Network Maryland Black Family Alliance

Maryland Budget & Tax Policy Institute Maryland CASH Campaign

Maryland Catholic Conference Maryland Commission for Women

Maryland Consumer Rights Coalition Maryland Federation of Business & Professional Women

Maryland Interfaith Legislative Committee Maryland Legislative Agenda for Women

Maryland Network Against Domestic Violence Maryland PIRG

Maryland State and D.C. AFL-CIO Mental Health Association of Maryland

Montgomery County Community Action Board NAACP - Maryland State Conference of NAACP Branches

National Employment Law Project Office of the Attorney General – Consumer Protection Division – Maryland

Out for Justice Presbytery of Baltimore – Peace and Justice Committee

Progressive Maryland Project PLASE

Public Justice Center Safe and Sound Campaign

SEIU United Way of Central Maryland

UNITE HERE Vehicles for Change Welfare Advocates

Women’s Housing Coalition Women’s Law Center of Maryland

Opponents

Apartment and Office Building Association of Metropolitan Washington Consumer Data Industry Association

First Advantage Maryland Automobile Dealer Association

Maryland Chamber of Commerce Maryland Multi-Housing Association

Maryland Retailers Association Maryland Restaurant Association

Maryland Society for Human Resource Management (SHRM) National Federation of Independent Business (NFIB)

Reed Elsevier on behalf of Lexis Nexis Restaurant Association of Maryland

Vangel Paper

Comcast (neutral after amendment) Maryland Bankers Association (neutral after amendment)

Messaging that Resonates with Legislators

• Importance of Deeply Engaged Partners – Attorney General’s Office of Consumer Protection – Maryland Legislative Agenda for Women – NAACP / Associated Black Charities – Labor Unions– Legal Aid

• Real Stories – Highly educated woman – messy divorce– Coach Factory Outlet Store - unpaid medical and hospital bills– Cleaning, security guard positions denied

• Media

Media Hits

• Business groups still want credit checks for potential hires– Maryland Daily Record, 2/10/11

• Executives oppose credit checks bill – Gazette, 2/11/11

• Credit where it’s not due – Baltimore Sun Editorial Board, 2/15/11

• Compromise is reached on credit check bill – Maryland Daily Record, 3/10/11

• Md. lawmakers want to limit credit checks on job seekers– Baltimore Sun, 3/20/11

• Assembly limits credit checks for job seekers– Baltimore Sun, 3/26/11

• Maryland Senate passes bill limiting employers’ use of credit reports – Baltimore Business Journal, 4/6/11

Media Hits

Marylanders support this legislation:

In a February 2010 Fox 45 WBFF Baltimore news poll, viewers were asked, “Should

potential employers be allowed to check your credit history?” Of the 150 respondents, 92%

answered “no”.

C-SPAN

MARCH 27, 2010

Credit Checks and EmploymentMelissa Broome and Colleen Denston talked about lawmakers in Maryland who have proposed legislation that would ban employers from doing a credit check as a reason to deny employment. Fifteen other states have also considered similar laws and legislation is pending in Congress that would ban employers from hiring and firing based on credit scores. They also responded to telephone calls and electronic communications.

How It Happened in 2011

• Advocates and opponents worked together for weeks via the work group established by the Chairman of the Senate Finance Committee to compromise on language that both sides could support.

• The following entities supported the work group’s amendments: – Coalition of 58 organizations – Consumer Data Industry Association – Maryland Chamber of Commerce– Maryland Retailers Association – Maryland Restaurant Association – NFIB (National Federation of Independent Business)

• Governor Martin O’Malley signed the bill into law on April 12, 2011.

What It Does

• The legislation prohibits employers from using an applicant’s or employee’s credit history in determining whether to hire, discharge, or determine the compensation or terms of employment.

• Who is exempt? – Employers required by law to inquire into credit history. – Financial institutions, credit unions, and those registered as investment

advisors with the Securities and Exchange Commission.– Employers with a bona fide need that is substantially job-related and

disclosed in writing to employee or applicant, including positions that: • Are managerial and involve setting the direction or control of the business;• Involve access to personal information as defined in the commercial law article,

except for personal information customarily provided in a retail transaction; • Involve a fiduciary responsibility to the employer; • Are provided an expense account or a corporate debit or credit card; or • Have access to trade secrets or other confidential business information.

Penalties

• Applicants and employees who believe an employer has violated the law may file a written complaint with the Commissioner of Labor.

• If the Commissioner is unable to resolve the matter informally, the Commissioner may assess a civil penalty of up to $500 for the initial violation and up to $2,500 for repeat violations.

• An employer who receives a civil penalty to pay a fine may request an administrative hearing.

Job Applicant Fairness Act ~ 2011Maryland becomes the fifth state to limit the use of credit checks by employers


Presenter

Kalitha Williams

Policy Liaison for Asset Building,

Policy Matters Ohio


Senate Bill 70 - Provisions

• Introduced by Senator Charleta Tavares

• Make employment credit checks a discriminatory practice

• Ohio Civil Rights Commission would have the authority to investigate complaints against employers and make a ruling

• Employers could be subject to civil penalties

• The bill has only had one hearing


Senate Bill 70 - Status


How relevant is this issue in Ohio

• Search through job listings in Ohio (craigslist and monster.com) came up with several positions requiring a credit check

• Columbus Dispatch did a series entitled “Credit Scars” of credit report errors and challenges with getting errors corrected. Articles highlighted a situation of a woman almost losing her job due to errors

• A national survey over nearly 600 employers conducted by an Ohio based background screening company found that nearly 40% of them do not inform applicants of damaging things found in background checks

How many Ohioans may be unable to secure employment because of this practice?


WE NEED YOUR HELP!To help organize a strategy for bill passage

Contact Kalitha Williams to get involved

Contact Us!

Melissa Broome

410. 234-8046, [email protected]

Amy Traub,

212.485.6008, [email protected]

Kalitha Williams 614.221.4505, [email protected]

discrediting employment credit checks webinar · people are denied jobs because of credit checks...

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