BILL ANALYSIS
AB 482
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 482 (Mendoza)
As Amended July 15, 2010
Majority vote
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|ASSEMBLY: | |(June 3, 2009) |SENATE: |21-14|(August 26, 2010) |
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(vote not relevant)
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|COMMITTEE VOTE: |7-3 |(August 30, 2010) |RECOMMENDATION: |concur |
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Original Committee Reference: ED.
SUMMARY : Prohibits the use of consumer credit reports for
employment purposes, except as specified.
The Senate amendments delete the contents of the bill, and instead:
1 Prohibit the use of a consumer credit report employment purposes
unless:
a) 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; and,
b) The position of the person for whom the report is sought is
a managerial position, a position in the Department of Justice,
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.
2)Provide that these provisions do not apply to a person or business
subject to the federal Gramm-Leach-Bliley Act (governing financial
institutions) and implementing regulations, if the person or
business is subject to compliance oversight by a state or federal
regulatory agency with respect to those laws.
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3)Add related legislative findings and declarations.
FISCAL EFFECT : According to the Senate Appropriations Committee,
though not specified, enforcement would likely be the responsibility
of the Division of Labor Standards Enforcement. These enforcement
costs are estimated at up to $120,000 annually in special funds.
AS PASSED BY THE ASSEMBLY , this bill required the State Board of
Education (SBE) to revise the reading/language arts framework to
address the needs of English learners, as specified.
COMMENTS : The federal Fair Credit Reporting Act (FCRA) was enacted
to promote accuracy, fairness, and privacy of personal information
assembled by consumer credit reporting agencies. The FCRA regulates
how employers may use consumer reports, which are defined as reports
containing information pertaining to a person's credit worthiness,
credit standing, credit capacity, character, general reputation,
personal characteristics, or mode of living. The FCRA does not
exempt employers from complying with state laws governing background
checks.
The FCRA only applies where an employer uses a third-party to
perform a background check. In that event, the FCRA requires that
the employer notify the applicant and obtain consent for the
background check. If an adverse decision is made based upon the
background check, the employer must provide the applicant with
notice of the adverse decision and the name, address, and telephone
number of the consumer reporting agency making the report. The
employer is also required to give the applicant a copy of the report
and information on how to dispute the contents of the report.
California's Consumer Credit Reporting Agencies Act (CCRAA), the
state's counterpart to the FCRA, generally regulates consumer credit
reporting agencies. (Civil Code Section 1785.1 et seq.) Among
other things, the CCRAA requires every consumer credit reporting
agency to allow a consumer, upon request and with proper
identification, to visually inspect all files pertaining to him or
her that the agency maintains at the time of the request. The CCRAA
permits consumers to dispute inaccurate information and requires a
consumer credit reporting agency to reinvestigate disputed
information without charge.
Additionally, California law, the Investigative Consumer Reporting
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Agencies Act, generally regulates investigative consumer reporting
agencies. (Civil Code Section 1786 et seq.) Such agencies are
defined as any person, corporation, or other entity that collects,
reports, or transmits information concerning consumers for the
purpose of providing investigative consumer reports to third
parties, as specified. Investigative consumer reports may be given
only to third parties the agency believes is using the information
for: 1) employment purposes; 2) determining a consumer's
eligibility for insurance; 3) hiring a residential unit; or, 4)
other specified reasons.
Proponents of this bill argue that working families in California
are facing the worst economic crisis since the Great Depression.
Unemployment is at a 25-year high, 500 families lose their homes to
foreclosure each day, and those who have jobs are facing furloughs
and wage cuts. According to proponents, in this economic climate
particularly, a person's credit history says nothing about his or
her character or ability to do a job effectively and responsibly.
Yet, proponents argue, employers routinely rely on credit reports to
deny employment to those who would have otherwise been given a job.
Proponents are also concerned that conducting credit checks is
flawed by the high rate of errors in credit reports as well as the
over reliance on out-dated information about an individual.
In opposition to the bill, a coalition of business interests
contends that "while an individual's credit history by itself is not
predictive of potential theft, access to credit information can
reveal patterns that may present an unreasonable risk to businesses
resulting from an irresponsibility with regard to, or inability to,
handle personal financial commitments." The opposition further
asserts that this bill "prohibits employers from performing their
due diligence in screening applicants, thus subjecting employers to
a greater risk of inadvertently violating the law or being subject
to frivolous employment litigation. This risk is compounded by the
fact that, in most situations, employers are liable for the actions
of employees in the performance of their job duties, so an employee
may take actions that bring an unacceptable level of liability on
their employer."
This bill is similar to AB 943 (Mendoza) from last year, which was
vetoed by the Governor.
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091
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FN: 0006860