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Pre-Employment Credit Checks: OK Under Texas Employment Law?

Have you ever wondered what the law says about employers who conduct credit checks prior to hiring? Is it a legal practice?

On the surface, it looks harmless. But of you dig deeper, you’ll notice that it isn’t necessarily that harmless a practice. Particularly when you look at the impact that a credit check could have on overall hiring.

In some cases, pre-employment credit checks can even amount to discrimination.

Here's the idea -- while you might already know that making racial comments and taking negative work action (such as not hiring someone) on the account of one's race might not be legally appropriate, many feel that the same concept applies to performing credit checks before hiring.

The reason isn't that credit checks themselves are racist. It's that the effect of the credit checks could yield disparate results on minority vs. majority applicants.

In short, if one race is more negatively impacted and stands to lose a lot more through credit checks, it could severely limit the candidate pool and result in hiring of far more white candidates over black ones. And an impact like that can be seen by courts as a form of hidden racial discrimination.

That's why the Equal Employment and Opportunity Commission has stepped in, issuing an opinion on the use of credit checks when hiring. The EEOC says that such credit checks can only be done if necessary for the organization to operate safely or efficiently.

While there is no law in Texas talking about pre-employment credit checks, that doesn't necessarily mean that such investigations are outside the reach of law.

If you feel you've been discriminated against in hiring, call your local EEOC office or get in touch with a Houston employment lawyer.

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