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Job Applicant and Employee Credit Checks in California: Proceed With Caution

October 11, 2011

By Stephen L. Berry & Gina Guarienti Cook

On October 9, 2011, Governor Brown signed Assembly Bill 22 into law. The new law takes effect on January 1, 2012, and significantly changes the legal landscape for employers who request and consider credit-related information as part of job applicant and employee background checks. The law prohibits employers from obtaining credit information about applicants for employment as part of the background check process and deciding whether or not to continue the employment of an existing employee, unless the applicant/employee occupies a position specified in the law. The law also requires employers who obtain credit information as part of a background check to identify the specific basis in the law that authorizes the credit check.