BILL NUMBER: AB 943	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 14, 2009

INTRODUCED BY   Assembly Member Mendoza

                        FEBRUARY 26, 2009

   An act to add  Sections 12940.4 and 12940.5 to the
Government   Chapter 3.6 (commencing with Section
1024.5) to Part 2 of Division 2 of the Labor  Code, relating to
employment.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 943, 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
confidential information, and (2) the position of the person for
which the person is sought is a managerial position, a position in a
city, county, or both city and county, 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.  
   Under existing law, it is an unlawful employment practice for an
employer, because of the race, religious creed, color, national
origin, ancestry, physical disability, mental disability, medical
condition, marital status, sex, age, or sexual orientation of a
person, to refuse to hire or employ the person or to refuse to select
the person for a training program leading to employment, or to bar
or to discharge the person from employment or from a training program
leading to employment, or to discriminate against the person in
compensation or in terms, conditions, or privileges of employment.
Existing law, the federal Fair Credit Reporting Act, permits an
employer to obtain a credit report regarding a person if the employer
discloses to the person that a credit report may be obtained by the
employer and the person has authorized the procurement of the credit
report.  
   This bill would prohibit an employer, unless based on a bona fide
occupational qualification, from refusing to hire or employ a person,
refusing to select a person for a training program leading to
employment, barring or discharging a person from employment or from a
training program leading to employment, discriminating against a
person in compensation or in terms, conditions, or privileges of
employment, or taking any other adverse employment action against a
person because the person does not authorize the employer to obtain a
credit report regarding the person. The bill would create a
rebuttable presumption of an unlawful employment practice when an
employer takes adverse employment action against a person within 60
days of the person denying authorization for the employer to obtain a
credit report regarding the person.  
   This bill would also, commencing on July 1, 2011, require
employers to submit to the Department of Fair Employment and Housing
every 6 months a list of each applicant for employment and each
employee who has applied for a promotion during the 6-month period,
the race and gender of each applicant and employee specified, whether
a credit report was obtained regarding each applicant and employee
specified, and a list of all applicants offered employment and
employees offered promotion during the 6-month period. The bill would
then require the Department of Fair Employment and Housing,
commencing on March 1, 2012, to annually report to the Legislature
for the prior calendar year regarding the use of credit reports by
employers and provide an analysis of whether the use of consumer
credit reports has a disparate impact on employment of persons with
respect to race and gender. 
   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.    Chapter 3.6 (commencing with Section
1024.5) is added to Part 2 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 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 a city, county, or both city and county.
   (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.  
  SECTION 1.    Section 12940.4 is added to the
Government Code, to read:
   12940.4.  (a) An employer shall, commencing with the first
submission date of July 1, 2011, once per every six months, submit to
the Department of Fair Employment and Housing the following:
   (1) A list of each applicant for employment and each employee who
applied for a promotion during the six-month period.
   (2) The race and gender of each person listed pursuant to
paragraph (1).
   (3) Whether a consumer credit report was obtained regarding each
person listed pursuant to paragraph (1).
   (4) A list of all applicants offered employment and employees
offered a promotion during the six-month period.
   (b) Commencing on March 1, 2012, and not later than March 1 of
each year thereafter, the Department of Fair Employment and Housing
shall annually report to the Legislature for the prior calendar year
regarding the use of consumer credit reports by employers and provide
an analysis of whether the use of consumer credit reports has a
disparate impact on employment of persons with respect to race and
gender. The report shall include, but not be limited to, the
following:
   (1) The number of applicants for employment and employees who
applied for a promotion, categorized by race and gender.
   (2) The number of applicants for employment offered employment and
employees who applied for a promotion offered a promotion,
categorized by race and gender.
   (3) The number of applicants for employment and employees who
applied for a promotion for whom a consumer credit report was
obtained by the employer, categorized by race and gender.
   (4) The number of applicants for employment offered employment and
employees offered a promotion whose consumer credit reports were
obtained by the employer, categorized by race and gender.
   (c) For purposes of this section and Section 12940.5, "consumer
credit report" has the same meaning as provided in subdivision (c) of
Section 1785.3 of the Civil Code.  
  SEC. 2.    Section 12940.5 is added to the
Government Code, to read:
   12940.5.  (a) Unless based upon a bona fide occupational
qualification, an employer shall not refuse to hire or employ a
person, refuse to select a person for a training program leading to
employment, bar or discharge a person from employment or from a
training program leading to employment, discriminate against a person
in compensation or in terms, conditions, or privileges of
employment, or take any other adverse employment action against a
person because the person does not authorize the employer to obtain a
consumer credit report regarding the person.
   (b) A rebuttable presumption of a violation of subdivision (a) is
created when an employer takes adverse employment action against a
person within 60 days of the person having denied authorization for
the employer to obtain a consumer credit report regarding the person.