County of Los Angeles Department of Consumer Affairs New Consumer Laws 2012

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Credit Reports: Limits on their use for employment purposes

AB 22– Chapter 724 - Civil Code §1785.20.5; Lab. Code §1024.5

Effective January 1, 2012

Summary: Prohibits an employer or prospective employer from using a consumer credit report for employment purposes (with certain exceptions when it is allowed).

Background: The federal Fair Credit Reporting Act and the California Consumer Credit Reporting Agencies Act authorizes the use of consumer credit reports for employment purposes under certain requirements. For many years, employers from various sectors have run credit checks on job applicants.

The New Law: Prohibits a current or prospective employer to use a consumer credit report for employment purposes unless applicant is applying for or is currently holding the following positions:

• Managerial position.
• Position with the California Department of Justice.
• Sworn peace officer or other law enforcement position.
• Position that involves regular access to the bank or credit card information, social security number, and date of birth of any one person.
• Position in which the person is named a signatory on the bank or credit card account of the employer.
• Position involving the authority to conduct certain financial transactions on behalf of the employer.
• Position that involves access to confidential or proprietary information.
• Position that involves regular access to cash totaling $10,000 or more.
• Position for which the information contained in the report is required by law to be disclosed or obtained.

For more information:
County of Los Angeles Department of Consumer Affairs
B-96 Kenneth Hahn Hall of Administration
500 W. Temple Street * Los Angeles, CA 90012-2706
Telephone (800) 593-8222 (within the County) * (213) 974-1452
Website: dca.lacounty.gov