Isn’t it kind of insane for someone to deny you a better job because of your credit history?
Sen. Elizabeth Warren (D-Mass.) and Rep. Steve Cohen (D-Tenn.) are calling for a ban on the ability of employers to check the credit history of their employees, saying that the practice is a form of discrimination unfairly targets people who have suffered as a result of the 2008 financial crisis.
In an op-ed published on Tuesday, the two noted that an employee’s credit report had nothing to do with their ability to do their job. They also noted that the 2008 financial crisis had cost many people their homes and given them debt that they are still resolving. Both Warren and Cohen have also reintroduced the Equal Employment for All Act, which would ban employers from checking the credit reports of potential employees with a few exceptions.
“For hardworking people struggling to make ends meet, the only way to get back on their feet is to find a good job and earn a paycheck. But even when they are able to sell their homes—often at a loss—or after they are forced to close their business’ doors or find temporary work, that bad credit history continues to haunt them,” Warren and Cohen wrote. “And despite the often-desperate effort to find a job, many employers are unfairly shutting the door on applicants with less-than-stellar credit. We should call this what it is: discrimination.”
If given permission by a prospective employee, an employer can pull their credit history and look for outstanding debts that the person has not attempted to resolve. In a 2012 survey conducted by the Society for Human Resource Management, 53 percent of employers said that they did not conduct background checks on any of their job candidates, though 87 percent said that they did check the credit history of potential employees in financial positions. Forty-five percent of respondents in the survey said that they conducted credit checks to prevent theft and embezzlement.
But Warren and Cohen say that credit reports can contain inaccuracies that unfairly impact the employees.
Totally ignoring that looking at applicants’ financial records is a major invasion of their privacy in the first place, or that it ought to be reciprocal to be fair, because by far the most financial damage done to corporations is due to incompetance, fraud or theft in the ranks of management, from the upper echelons, not the bottom. But they don’t have to show what their financial situation truly is. The main trouble with it is that there are lots of things employers can discern (or imagine they do) from those records which are outside the scope and purview of the stated rationales for the search, but which are nonetheless made available to them by the act of looking for the data they claim they need. What they then do with that information is supposed to be very specific and limited, but if something is surmised as being indicated by the files which is outside the legal scope, but management still feels is a risk not worth their taking, they can easily find another reason which IS legal, to disallow an applicant’s candidacy for the job. Anyone who thinks this does not take place is kidding themselves. The only question is how much it is.
Plus, the phenomenon known as “mission creep” is just as applicable here as in military or law enforcement. But differs in that profit can be the sole force driving it. Imagine a business which applies algorithms to employee financial data looking for patterns which might indicate drug use, or gambling problems, and forwards the results to employers for a fee. Job Shoppers who certified their candidates in this regard would have a big advantage vs. those who don’t, for instance. All they would require of you is the same info you already allow to be viewed by your employer. This organization would simply analyze the data, and report patterns or departures which indicate behaviors the employer is interested in promoting, suppressing or ignoring, as probabilities based on the numbers.They simply run the numbers through whatever formulas are required, and it spits out a 10 Best Bets amongst the sampled crop of applicants for a job, based on best total percentage on all criteria, or best percentage on a specifically desirous (or un-) criteria which carries more or less weight with that particular organization and so counts more or less towards the overall rating.
I can see this slipping in easily and unnoticed, if it hasn’t already. It would just be the employer “outsourcing” that hiring task to a data screening outfit, and the data being used by that company to discover things which were not requested, but would be available for a price to employers, while employers dodge any blame for searches which exceed the legal scope, but for a fee reap the benefits of performing one anyway.
The best parallel I can think of would be insurance actuary tables derived from analysis of driving records, age of individuals, income group, type of vehicle being covered, etc, all generating a number which is your risk factor to whoever is to provide your insurance. This would be the same thing, but based on tested algorithms applied to employee financial data to discern your “Hireable Indicators Total” or “Basic Underighter Measurement”, or whatever.