On October 9, 2011, Governor Jerry Brown signed a new law that will ban employers’ use of credit checks to screen employees and job applicants. The new law will take effect on January 1, 2012.
Employers are prohibited from using credit reports in making employment decisions unless the job position falls within certain exceptions, including managerial positions, law enforcement positions, jobs requiring regular access to confidential information or cash totaling $10,000 or more, and jobs in which the employee will enter into financial transactions on the company’s behalf.
The law excludes financial institutions and employers required to conduct credit checks by law.