New CA Legislation Effective 1/1/2012

The California Legislature had a busy session on the employment law front. Of particular importance in regard to background screening is the following: 

SB 909: Investigative consumer reporting agencies: disclosures.

Effective January 1, 2012, there is an important amendment to California Investigative Consumer Reporting Agencies Act (ICRAA), California Senate Bill 909 (SB 909), requires that employers include the background screening company's website address on the disclosure form. This additional provision is designed to make information available to an applicant about the background check company's privacy practices, including whether a consumer's personal information will be 'offshored' or sent outside the United States. Hire Image does not offshore any of its business process.  Our authorization forms already include our website, www.hireimage.com. If you modify the disclosure form at all, please make sure you are in compliance with SB 909.

AB 22:  Prohibition on Use Of Credit Reports For Employment Purposes

Also effective January 1, 2012, California's AB 22 prohibits the use of credit reports for employment purposes except in very limited circumstances.  The law does not apply to certain federally and state regulated financial institutions.  All other employers and prospective employers are prohibited from obtaining or relying on consumer or credit reports in making employment decisions about employees or applicants for employment. The only exception is where the position at issue is one of the following:

 - a position in the California Department of Justice;
 - a managerial position, defined as one that qualifies for the executive exemption from overtime;
 - a sworn peace officer or other law enforcement position;
 - a position for which the information contained in the report is required by law to be disclosed or obtained;
 - a position that involves regular access to specified personal information (bank or credit card account information, social security number, and date of birth) for any purpose other than the routine solicitation and processing of credit card applications in a retail establishment;
 - a position in which the person is or would be a named signatory on the employer’s bank or credit card account, or authorized to transfer money or enter into financial contracts on the employer’s behalf;
 - a position that involves access to confidential or proprietary information that qualifies as “trade secrets” under Civil Code Section 3426.1(d); or
 - a position that involves regular access to cash totaling $10,000 or more of the employer, a customer, or client during the workday. 

AB 22 also requires that an employer provide written notice to the applicant or employee when it seeks a consumer credit report under one of the exceptions above, specifying the permissible basis for requesting the report and also providing a box to check off to request a copy of the report.  In that circumstance, a copy of the report must be provided free of charge at the same time as the employer receives a copy of the credit report.  As is currently the law, if the employer makes an adverse employment decision based on information in the credit report, it must notify the applicant or employee of that fact and provide the contact information of the credit reporting agency. 

 

The text of AB 22 can be found at this link: http://leginfo.ca.gov/pub/11-12/bill/asm/ab_0001-0050/ab_22_bill_20110920_enrolled.pdf

 

 

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