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WASHINGTON, D.C., – Oct. 20, 2010 – The Society for Human Resource Management told the U.S. Equal Employment Opportunity Commission (EEOC) today that it has significant concerns with efforts to eliminate the ability of employers to consider relevant credit information in employment.
“SHRM believes there is a compelling public interest in ensuring that employers can assess the skills, abilities and work habits of potential hires,” Christine Walters, a human resource professional and lawyer, told the EEOC.
Walters — who was a practicing HR professional for private employers in Maryland for 10 years before forming her own company, FiveL of Westminster, Md. — appeared before the October meeting of the commission on behalf of the 250,000-member SHRM.
She noted that some states require employers to conduct specific background checks for positions such as teachers, police officers and licensed health-care professionals.
“SHRM believes the ability to obtain reliable and accurate job performance information about prospective employees has a direct impact on critical business concerns such as quality, workplace safety and customer satisfaction,” Walters said, adding, “The consequences of making a poor hiring choice can be great, possibly leading to financial losses or an unsafe work environment.”
At the same time, the Society believes that the Fair Credit Reporting Act of 1970 and the Civil Rights Act of 1964 provide employees with significant federal protections from the misuse of credit background reviews.
“We do not presume that just because an individual has slow or bad credit then she or he is automatically not qualified for any job,” Walters said. “Credit checks are intended … as just one reasonable measure toward a purpose.In this case, choosing the most qualified candidate for a particular position.”
The use of background checks has come under scrutiny because the recession and high unemployment have impacted individuals’ credit histories. SHRM has been monitoring an intensifying national and state debate about restricting the use of background checks in employment.
Recent reports have given the public a misleading description of the use of credit reports. SHRM’s comprehensive survey data shows that organizations are using credit checks in a focused and narrow way. SHRM’s data reveals:
On Sept. 23, SHRM testified before the U.S. House Financial Services Subcommittee on Financial Institutions and Consumer Credit about the Equal Employment for All Act, which would prohibit the use of credit checks for most employment purposes. In its testimony, SHRM said the use of credit background checks in employment decisions has not increased during the economic downturn, and these checks remain one tool among many that are useful to employers evaluating potential new employees.
For information on SHRM’s research about the use of background checks in the employment process, visit:
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