EEOC Files Suit Against Employer Requiring Credit Checks

EEOC Files Suit Against Employer Requiring Credit Checks

We recently learned that the EEOC has filed suit against an employer which allegedly rejected job applicants based on their credit history, with a “significant disparate impact” upon African Americans.

According to the New York Times, “sending a sharp warning to employers nationwide, the Equal Employment Opportunity Commission sued the Kaplan Higher Education Corporation …, accusing it of discriminating against black job applicants through the way it uses credit histories in its hiring process.”   >>Click here to read the full article

An EEOC spokeswoman stated that “credit histories were not required to show responsibility, they were compiled to show someone was not paying the bills, which is not always the same thing.” As an example, she cited someone who had been paying bills for years, but became unable to do so because of a job loss or family medical emergency.
 
Needless to say, Kaplan disagrees, stating that ‘the checks are job related, and a necessity to ensure that staff handling financial matters, including financial aid, are properly screened.”
 
The EEOC is seeking (1) a permanent injunction against the use by Kaplan of credit histories in employment and hiring decisions; (2) lost wages and benefits for anyone who was denied employment because of a credit check; and (3) an order compelling Kaplan to make employment offers to those individuals.

I have recently been notified by several background check companies that they expect the government to prevent the use of credit checks in the hiring process.  This recent suit confirms what we had anticipated.  Although we cannot predict what the court’s decision might be, but we recommend that our clients only perform credit checks if they are certain that the information to be revealed is “essential to the job in question.”

How could Horizon Hospitality’s Pre-Employment Screening help your company?

Horizon Hospitality provides our clients with the most comprehensive and thorough Pre-Employment Screening Tools available to assure candidates issues and concerns are uncovered prior to a final hiring decision being made.  Horizon’s Pre-Employment Screening Services include:

  • Behavioral/DISC Testing – Our Behavioral/DISC assessments include the TTI Success InsightsTM reports, a family of three different comprehensive web-based DISC assessment options. 
  • Cognitive Skills Testing – A mental ability test that helps measure an individual’s ability to learn new skills quickly, adjust to new situations, understand complex or subtle relationships, and be flexible in thinking. This instrument helps assess an individual’s capacity to learn and understand the requirements of the job.
  • Background Checks  – Conducting background checks is also a way to confirm the validity of information in a resume or employment application. This way, companies can stay assured that the employee can perform the job well and is reliable.
  • Reference Checks – Checking references before making an offer can actually save time, money, effort, and a lot of embarrassment.
  • Drug Tests – Companies have a moral and legal obligation to ensure that their employees adhere to Federal work-safety guidelines, and pre-employment drug screenings can be an effective tool.

 To obtain more details about Pre-Employment Screening Services for your company, contact:

Scott Samuels
President
Horizon Hospitality
Tel: (913) 897-3100
Email:  [email protected]

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