New Jersey could soon become the 12th state in the U.S. to stop employers from using credit histories when determining whether or not to hire a job applicant.

Boss dismissing an employee
texelart, ThinkStock
loading...

Legislation sponsored by state Sen. Nia Gill (D-Montclair) was given the green light by the Senate Labor Committee on June 8, and now heads to the full Senate for consideration.

The measure would prohibit an employer from requiring a credit check on a current or prospective employee as a condition of employment, unless the employer is required to do so by law, or reasonably believes that an employee has engaged in a specific activity that is financial in nature and constitutes a violation of law.

Gill said the legislation is needed.

"It's a practice that has become widespread, where if you're unemployed and you can't pay your bills on time, then when you go to apply for a job they will use the fact against you that you in fact have not been timely in the payment of your bills."

She suggested the situation is sort of like a vicious cycle "that allows the discrimination against people because of their inability to pay their bills."

Gill said people who are struggling to find employment shouldn't be discriminated against in this manner, and deserve to be protected.

"They should have a right to compete and a right to be able to seek employment, and have it based upon valid criteria," Gill said

The measure would not apply to all types of employment situations, especially if there are significant financial considerations involved in a particular job.

"This is a balance between what the public can have, and what the business community also deserves" Gill said.

Michael Egenton, senior vice president of the New Jersey State Chamber of Commerce, said the use of credit history has historically been an additional tool for employers in assessing potential job applicants.

"Companies that conduct credit checks are doing their due diligence to ensure they're not putting their business interests at risk," Egenton said. "We believe the legislation as currently written will add to the cost of doing business in our state."

Egenton said the legislation could open the door to costly lawsuits toward employers, putting businesses at a competitive disadvantage.

Many employers don't even use credit checks, according to Egenton, so he feels legislation is not needed.

 

 

 

More From New Jersey 101.5 FM