Wisconsin, and 16 other states, are considering passing a bill that would prevent employers from asking for credit checks from potential employees.
According to the Society for Human Resources Management Web site, there has been a sharp increase in the number of credit checks employers run.
A survey that the SHRM recently conducted showed that 60 percent of employers run credit checks on at least some job applicants, compared with 42 percent in a 2006 survey. These credit checks are making it difficult for people with bad credit to get a job.
Wisconsin state representative Kim Hixson drafted the bill. He got the idea from a constituent, Terry Becker, that was having a problem getting hired.
“Terry Becker had some difficulty getting employed,” Hixon said.
According to Hixon, Becker had accumulated quite a bit of debt due to medical bills. When employers would see that his credit was less than perfect, they would refuse to hire him. Hixon found that Becker wasn’t the only one dealing with this type of problem.
“I would talk to people when I was speaking in groups,” said Hixon. “They all said ‘Yes, it is a problem.’”
The bill would not however prevent all employers from requesting credit checks.
“The law does have an exemption,” Hixon said. “If credit history is substantially related to the job.”
Hixon explained that the credit history of an investment banker might be an important indicator to if the person would make smart descisions for the company. But for the majority of jobs, credit history doesn’t really matter.
According to Hixon, the law would be very important to recent college graduates.
“A concern that I have with a lot of students is that they’ve run up some debt,” Hixon said.
He continued by adding that if employers find students credit card debts and loans to be a problem it may prevent students from getting hired after graduation.
Hixon said they hope to have a vote on this bill within the next four to five weeks.
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