LEAD Center Welcomes CRC and ETA Guidance Regarding Use of Credit Scores
On October 17th, the U.S. Department of Labor (DOL) Employment and Training Administration (ETA) and the Civil Rights Center (CRC) issued Training and Employment Guidance Letter Number 11-14, which will limit the use of credit information to exclude, screen or select applicants for employment by employers who use the public workforce system. The guidance to inform employers and job seekers explains that:
“Negative information on credit reports may reflect that applicants have experienced difficult circumstances beyond their control that have no relationship to their ability to perform the job, such as a medical emergency, disability, layoff, loss of a spouse or identity theft.”
The guidance further points out that “there is no body of evidence that validates the use of credit history in hiring decisions. Such use of credit history is only acceptable when it can be proven to be job-related for the position in question and consistent with business necessities.” Even under these circumstances, the employer must verify the accuracy of the credit report and seek to determine why the applicant may have negative information on it.
Being rejected for a job, based on credit history, may violate multiple civil rights laws and the Fair Credit Reporting Act. Complaints about employer actions based on credit history may be filed with the Civil Rights Center of the U.S. Department of Labor at CivilRightsCenter@DOL.gov.
For further guidance on this issue, please visit the DOL website.
The LEAD Center applauds this guidance as an important and significant step by the U.S. Department of Labor to challenge a growing and disturbing practice by employers, as jobseekers with and without disabilities battle the challenges of unemployment and managing debt and credit. Please distribute this guidance widely to help inform jobseekers of new protections against discrimination.