Job seekers' higher hurdle

ANNAPOLIS, Md. - It's hard enough to find a job in this economy, and now some people are facing another hurdle: Potential employers are holding their credit histories against them.

Sixty percent of employers surveyed recently by the Society for Human Resources Management said they run credit checks on at least some job applicants. That compares with 42 percent in a somewhat similar survey in 2006. Employers say such checks give them valuable information about an applicant's honesty and sense of responsibility.

But lawmakers in at least 16 states, including Pennsylvania and New Jersey, have proposed outlawing most credit checks, saying the practice traps people in debt because their past financial problems prevent them from finding work.

Wisconsin State Rep. Kim Hixson drafted a bill in his state shortly after hearing from Terry Becker, an auto mechanic who struggled to find work.

Becker said his financial problems started with medical bills that piled up when his son, now 10, began having seizures as a toddler. In the first year alone, Becker ran up $25,000 in medical debt.

Over 41/2 months, he was turned down for at least eight positions for which he had authorized the employer to conduct a credit check, Becker said. He said one potential employer told him, "If your credit is bad, then you'll steal from me."

Hixson calls what happened to Becker discrimination based on credit history and said his bill would ban it.

"If somebody is trying to get a job as a truck driver or a trainer in a gym, what does your credit history have to do with your ability to do that job?" Hixson asked. He said he knew of no research that showed a person with a bad credit history was going to perform poorly.

Under federal law, prospective employers must get written permission from applicants to run a credit check on them. But consumer advocates say most job applicants do not feel they are in a position to say no to such requests.

Most of the bills being proposed this year resemble laws in Hawaii and Washington that prevent employers from using credit reports when hiring for most positions. The laws contain exceptions in cases where such information could be relevant to the job - for example, if the person is applying to work in a bank or an accounts-payable office.

On a national level, Rep. Stephen J. Cohen (D., Tenn.) introduced a similar bill last summer in Congress, where it is still bottled up in committee.

Mike Aitken, government affairs director of the Society for Human Resources Management, said someone who could not pay his or her bills on time might not be more likely to steal, but might not have the maturity or sense of responsibility to handle a job such as processing payroll checks.

Last year, California lawmakers voted to curb the use of such credit checks for job applicants, but Gov. Arnold Schwarzenegger vetoed the bill under pressure from Chamber of Commerce leaders who called it a "job-killer."

Maryland Delegate Kirill Reznik, who drafted the bill being considered in his state, said people struggling to get jobs needed help.

"We are in the Great Recession," Reznik said, "and this creates a vicious cycle. People lose their jobs, that naturally precipitates them getting behind on bills.

"Their credit scores go down, they are trying to find a job to pay off the bills, and employers won't hire them because of their credit score."

Legislation has been proposed in these states to bar credit checks for most job applicants:

Connecticut New York

Georgia Ohio

Illinois Oklahoma

Indiana Oregon

Maryland Pennsylvania

Michigan S. Carolina

Missouri Vermont

New Jersey Wisconsin

Banned

These states already prohibit the checks:

Hawaii Washington

SOURCE: Associated Press

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