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Job Rejection

Unemployed + Bad Credit? New Bills Ban Credit and Employment Status Discrimination

Being unemployed with bad credit is often a death sentence when searching for a new job.  Why?  Some employers have taken to adding the following to job postings:

“Must be currently employed”

In this economy, that doesn’t make any sense!  The argument is that people who are unemployed were let go because of obsolete skill sets and therefore were obviously less valuable to their company.  Let’s not forget the fact that it may have been due to financial constraints which overlooks talent and skill set.

But there’s hope, Huffington Post reports:

Under Title VII of the Civil Rights Act, employers cannot discriminate against applicants based on race, color, religion, sex, or national origin. Rep. Hank Johnson (D-Ga.) introduced legislation on Wednesday that would add unemployed people to that list of protected groups.

The Fair Employment Act of 2011 (H.R. 1113), drafted by Johnson and co-sponsored by Rep. Jesse Jackson, Jr. (D-Ill.), would amend the Civil Rights Act to make it illegal for employers to refuse to hire or to lower compensation for a person because of employment status. Johnson said he wrote the legislation because he was troubled by the ongoing phenomenon of job ads specifying that a candidate “must be currently employed.”

This is a good move in the right direction which should turn the tide against employers who have such absurd hiring policies which only serve to effectively keep good people from great jobs.   One might argue if this is such a great place to work with such discriminatory practices.

My only concern about this bill is that it lacks teeth and will be hard to enforce.  The burden would be on job applicants to prove that this policy is being used against them and in order to do that they would need to have some insider information about the company and their “internal hiring policies”.   Companies will continue to shamefully discriminate for various reasons unless they begin to see the error in their ways

On the other end of this trend is the penchant for employers to run the credit of job applicants with the rationale that good or bad credit may be an important indicator of an applicant’s character.  If you ask me, that’s about as good a reason as the Tea Party’s requirement that renters be denied the right to vote.  This comes at a time when the unemployed may indeed have bad credit through no fault of their own: the lack of a job to pay the bills.  And, without that job to pay the bills your credit gets jacked.   Who knew?  Well the EEOC seems to agree that the use of credit histories result in disparate discrimination:

From Lexology:

For about a year now, the United States Equal Employment Opportunity Commission (EEOC) has been trying to make the case that employment-related background checks involving the use of applicant credit histories somehow constitute race, and maybe sex, discrimination. According to the EEOC:

Inquiry into an applicant’s current or past assets, liabilities, or credit rating, including bankruptcy or garnishment, refusal or cancellation of bonding, car ownership, rental or ownership of a house, length of residence at an address, charge accounts, furniture ownership, or bank accounts generally should be avoided because they tend to impact more adversely on minorities and females. Exceptions exist if the employer can show that such information is essential to the particular job in question.


In one such case, Kaplan’s hiring practices came under scrutiny by the EEOC:

…the Equal Employment Opportunity Commission sued Kaplan Higher Education Corp. … accusing it of discriminating against black job applicants through the way it uses credit histories in the hiring process.

The lawsuit, an unusual intervention by the government, comes amid rising concerns that employers are denying jobs to applicants with damaged credit histories, even in cases where creditworthiness does not appear to be directly relevant to the job.

Justine Lisser, an EEOC spokeswoman, said credit histories are often inaccurate and may not be a good indicator of a person’s qualifications for a particular job.

In the EEOC’s lawsuit, which was filed in Cleveland, the agency said that since at least January 2008, Kaplan had rejected job applicants based on their credit histories, with a “significant disparate impact” on blacks.

However, the tide is changing with several states (Illinois, Oregon, Connecticut, Wisconsin, Hawaii, Missouri, New York, Washington, Washington, DC, Maryland and Texas) in the process of making it illegal to use an applicant’s credit history as a basis for the hiring decision.  Check your current state law or with your local officials as to whether or not a bill banning this type of discrimination is in the works or on the books already.  If not, get behind it!

Tell us! What do you think about discrimination based on credit or employment status?  Are these new developments helpful to job seekers?


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  • Marcy

    I totally agree, that ones work ethics should not have anything to do with credit history. Hey! there is a so call recession going on and many people have downsized or are without jobs and this is the result of what happens. Give a man or woman a break. People should be able to start over and prove their self. Why keep people down all their life because of credit or is this another form of sneaking prejudice into the equator.uumm

  • http://www.mycreditcardforbadcredit.com/ Greg

    I can't believe that employment would have anything to do credit rating. Just because I have bad credit it should not come in the way of me applying for a job no matter what the job is……This is criminal if you ask me…..Does my credit rating have anything to do with how I work or my work ethics…NO! My employment history is the only thing that matters!

  • ladebelle

    as someone who used to work in hr, these laws aren't really new to me.

    "discriminating" against someone who has bad credit isn't always a bad thing–especially if they have no explanation. not that someone's credit is the only thing that determines their character, how someone handles their financial obligations may contribute to the overall picture.

    people who mismanage their own funds can potentially lead to the mismanagement of company funds. if someone isn't in much debt, there is less of a risk that they will run off with some of the company monies–just generally speaking.

    i do think that discrimination is wrong on all accounts however i do understand companies wanting to CYA

    • Maria

      That might be correct, but how about those jobs where there is absolutely no handling of money. I have seen credit being used in these types of situations as well.

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