Legislative and Compliance Issues



California Governor Signs AB 22

The Governor of California has signed AB 22 into law, limiting the use of consumer credit reports for applicant screening and other employment purposes. This law goes into effect January 1, 2012.

Like most bills restricting the use of credit reports in employment decisions, AB 22 includes categorical exemptions, allowing employers to obtain credit reports in certain situations. Before requesting a credit report in any of these situations, however, the employer must provide the applicant or employee a notice that:

  1. says that the employer will use the report;
  2. identifies the source of the report;
  3. identifies the specific basis listed above that allows the credit report; and
  4. allows the applicant or employee to request a free copy of the report from the employer by checking a box.

If the employee checks the box, the employer must request a copy for the applicant or employee at the same time as the employer requests the report. The employer may not charge the applicant or employee for the copy.

The law does not apply to any position with a financial institution subject to the Gramm-Leach-Bliley Act.

For more details, including exemptions and what backgroundchecks.com recommends clients do to abide by these laws, please click here.