Another employment law approved by Governor Jerry Brown in 2011 and going into effect on January 1, 2012, is Assembly Bill 22 (AB 22), which will restrict the use of consumer credit reports in employment decisions. Former California Governor Arnold Schwarzenegger vetoed similar legislation in 2008, 2009 and 2010.
Except for certain financial institutions, the law will ban employers from obtaining or using a consumer credit report for employment purposes unless the position of the person for whom the report is sought is:
- A managerial position, which the law defines as a position qualifying for the state executive employee overtime exemption
- A position in the California Department of Justice
- A sworn peace officer or other law enforcement position
- A position for which information contained in a credit report is required by law to be disclosed or obtained
- A position that involves regular access to certain confidential personal information such as bank or credit card account information, Social Security numbers and dates of birth (this exception does not apply to employees who access this information for the routine solicitation and processing of credit care applications in a retail establishment)
- A position in which the person is or would be either a named signatory on the employer’s bank or credit card account, authorized to transfer money on behalf of the employer or enter into financial contracts on the employer’s behalf
- A position that involves access to the employer’s confidential or proprietary information, defined as a trade secret under California Civil Code Section 3426.1(d)
- A position that involves regular access to cash totaling $10,000 or more belonging to the employer, a customer or a client, during the workday.
AB 22 was another bill Brown signed into law on October 9, 2011. With its passage, California now joins Connecticut, Illinois, Hawaii, Maryland, Oregon and Washington as states that restrict the use of credit reports for employment purposes. We will continue going over more of the new employment laws for 2012 next week, but in the meantime, our Los Angeles employment lawyers want to know how you feel. Do you think this bill is a good idea? Or will it be, as its critics always seem to refer to any new employment law, a “job killer” for California?
Law Offices of Kesluk, Silverstein & Jacob – Los Angeles employment attorneys