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Are Employment Credit Checks A Form of Racial Discrimination?

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It's common for employers in Texas to do credit checks on job applicants, as credit scores can be a factor in job eligibility. However, the U.S. Equal Employment Opportunity Commission recently held a hearing and heard concerns about the use of employment credit checks as a selection criteria in employment.

The Wall Street Journal reports that people opposed to checking credit in the hiring of applicants cite studies showing that African-Americans and Latinos tend to have lower credit scores. Hence, they say that employment credit checks discriminate against African American and Latinos applicants. Opponents of the practice also question whether credit reports are an accurate way to measure an employee's qualifications, especially since credit reports sometimes contain errors and incomplete information.

"If credit scores are supposed to be an accurate translation of a consumer's credit report and creditworthiness, that means these groups will fare worse when credit history is considered in employment." Chi Chi Wu, counsel for the National Consumer Law Center, explained in the Sun-Sentinel.

Congress and 20 U.S. states have proposed bills to limit credit checks in employment. But many employers still contend that credit checks help them evaluate job candidates and protect them against fraud. Perhaps the use of credit checks in employment will soon become an issue that Houston employment lawyers examine. Anybody who has been impacted in employment because of a credit score might want to consider contacting an attorney.

Related Resources:

  • Will Your State Law Ban Employer Credit Checks? (FindLaw's Law and Daily Life Blog)
  • Look for a Houston Employment Lawyer (FindLaw)
  • May an Employer Run a Credit Check on an Applicant? (FindLaw)

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