BILL NUMBER: AB 482	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JULY 15, 2010
	AMENDED IN SENATE  APRIL 8, 2010
	AMENDED IN SENATE  SEPTEMBER 2, 2009
	AMENDED IN SENATE  AUGUST 17, 2009
	AMENDED IN ASSEMBLY  JUNE 1, 2009
	AMENDED IN ASSEMBLY  APRIL 22, 2009
	AMENDED IN ASSEMBLY  APRIL 2, 2009

INTRODUCED BY   Assembly Member Mendoza

                        FEBRUARY 24, 2009

   An act to add Chapter 3.6 (commencing with Section 1024.5) to Part
3 of Division 2 of the Labor Code, relating to employment.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 482, as amended, Mendoza. Employment: credit reports.
   The federal Fair Credit Reporting Act (FCRA) and the state
Consumer Credit Reporting Agencies Act define and regulate consumer
credit reports and authorize the use of consumer credit reports for
employment purposes, pursuant to specified requirements. The FCRA
provides that it does not preempt state law, except as specifically
provided or to the extent that state laws are inconsistent with its
provisions.
   Existing federal and state law specify the procedures that an
employer is required to follow before requesting a report and if
adverse action is taken based on the report. Under existing law, an
employer may request a credit report for employment purposes so long
as he or she provides written notice of the request to the person for
whom the report is sought. Existing law requires that the written
notice inform the person for whom the consumer credit report was
sought of the source of the report and contain space for the person
to request a copy of the report. Existing law further requires an
employer, whenever he or she bases an adverse employment decision on
information contained in a consumer credit report, to advise the
person for whom the report was sought that an adverse action was
taken based upon information contained in the report and provide the
person with the name and address of the consumer credit agency making
the report.
   This bill would prohibit an employer, with the exception of
certain financial institutions, from obtaining a consumer credit
report for employment purposes unless the information is (1)
substantially job-related, meaning that the position of the person
for whom the report is sought has access to money, other assets, 
or trade secrets  or  other  confidential information,
and (2) the position of the person for whom the report is sought is
a position in the state Department of Justice, a managerial position,
that of a sworn peace officer or other law enforcement position, or
a position for which the information contained in the report is
required to be disclosed by law or to be obtained by the employer.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    The Legislature hereby finds and
declares the following:  
   (a) California's unemployment rate of 12.4 percent is higher than
the national average, and is affecting approximately 2.3 million
residents.  
   (b) The Society for Human Resource Management has reported that as
many as 60 percent of employers rely on the use of consumer credit
reports in preemployment hiring considerations. According to a study
conducted by the United States Governmental Accountability Office, as
late as in 2005, nearly 80 percent of consumer credit reports
contained erroneous information.  
   (c) The employers' use of consumer credit reports, which often
contain erroneous information about a job applicant's credit history,
poses a barrier to employment for many individuals. Further, even
assuming the credit report contains accurate information regarding an
individual's credit history, there is little evidence that credit
information is indicative of whether the individual would
successfully perform his or her job duties. This is particularly true
in the current economic crisis, where many individuals have lost
their jobs and subsequently their homes, resulting in a credit report
containing potentially negative information.  
   (d) It is the intent of the Legislature in enacting this measure
to lower barriers to employment to those individuals who have been
impacted by the current economic crisis and are struggling to find
work. Further, the Legislature intends to afford flexibility to
employers to utilize consumer credit reports in instances where such
use is substantially related to the job duties of the position
applied for. 
   SECTION 1.   SEC. 2.   Chapter 3.6
(commencing with Section 1024.5) is added to Part 3 of Division 2 of
the Labor Code, to read:
      CHAPTER 3.6.  EMPLOYER USE OF CONSUMER CREDIT REPORTS


   1024.5.  (a) An employer shall not use a consumer credit report
for employment purposes unless the following criteria are satisfied:
   (1) The information contained in the report is substantially
job-related, meaning that the position of the person for whom the
report is sought has access to money, other assets, or  trade
secrets or other  confidential information.
   (2) The position of the person for whom the report is sought is
any of the following:
   (A) A managerial position.
   (B) A position in the state Department of Justice.
   (C) That of a sworn peace officer or other law enforcement
position.
   (D) A position for which the information contained in the report
is required to be disclosed by law or to be obtained by the employer.

   (b) This section does not apply to a person or business subject to
Sections 6801 to 6809, inclusive, of Title 15 of the United States
Code and state and federal statutes or regulations implementing those
sections if the person or business is subject to compliance
oversight by a state or federal regulatory agency with respect to
those laws. 
   (c) For the purposes of this section, "trade secret" has the same
meaning as defined in subdivision (d) of Section 3426.1 of the Civil
Code.