You’ve heard about how the EEOC’s pressing the issue of obesity as a disability. Now the agency’s poking around another area of interest to employers: the use of credit checks to screen job applicants.
The EEOC recently held a public hearing on the growing use of credit histories as selection criteria in employment.
Chi Chi Wu of the National Consumer Law Center expressed concerns that the use of credit histories “create[s] a fundamental ‘Catch-22’ for job applicants, especially during this period of high unemployment and high foreclosures, both of which have a negative impact on credit.”
Sarah Crawford of the Lawyers’ Committee for Civil Rights Under Law and Dr. Avis Jones-DeWeever from the National Council of Negro Women said the use of credit histories in the employment context can have a disparate impact on a range of protected groups, including people of color, women, and people with disabilities.
‘Poor predictor of performance’
Crawford also cited studies that show credit history is a poor predictor of job performance. And she pointed out that many credit reports are riddled with errors or incomplete information.
Representatives from the business community — Michael Eastman of the U.S. Chamber of Commerce, Christine V. Walters of the Society of Human Resources Management (SHRM) and Pamela Quigley Devata of the law firm Seyfarth Shaw, LLP — testified that the use of credit histories is permissible by law, limited in scope, and is useful for predicting an applicant’s likelihood of success in certain circumstances.
The meeting is the first in a series planned by the EEOC to “examine barriers to employment and their potential adverse impact on protected groups.”
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