It’s that time of the year when employers need to check the list to see if any of the new laws affect them. This year, there are more opportunities for employers to be naughty than nice if they aren’t careful.

Prohibition on credit checks

There are new restrictions on employers using consumer credit reports, not only for prospective employees but current employees as well. Assembly Bill 22 prohibits employers — except for certain financial institutions — from obtaining or relying on a consumer credit report unless it relates to one of the following: (1) a position within the California Department of Justice; (2) a managerial position (which is defined as one that qualifies for the executive exemption for overtime); (3) a sworn peace officer or other law enforcement position; (4) a position for which credit information is required by law to be disclosed or obtained; (5) a position that involves regular access to specified personal information (other than the routine processing of credit card applications in a retail establishment), such as bank or credit card account information, social security numbers and dates of birth; (6) a position in which the employee or applicant would be a named signatory on the employer’s bank or credit card account, authorized to transfer money on behalf of the employer, or enter into financial contracts on behalf of the employer; (7) a position that involves access to confidential or proprietary information (defined as a “trade secret” under Civil Code §3426.1(d)); or (8) a position that, during the workday, involves regular access to cash totaling $10,000 or more, which belongs to the employer, a customer, or a client.

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