Tuesday, February 21, 2012

Senate Passes Employment Opportunity Act today

DENVER – Today, the Senate passed Senate Bill 3, the Employment Opportunity Act sponsored by Senator Morgan Carroll (D-Aurora). The Employment Opportunity Act prohibits abusive credit check practices that unfairly limit a Coloradan’s ability to find employment. Many employers currently use credit reports in hiring decisions, which can prevent many hard-working Coloradans who have low credit scores from finding employment.

This type of hiring practice can detrimentally affect many citizens who have poor credit scores due to circumstances outside of their control. This includes citizens who experience identity theft, illness or medical emergencies, unexpected job loss, families going through divorce, and even debt free individuals who choose to pay cash for purchases.

Approximately 25.5 percent of Americans currently have poor credit compared with a historical average of 15 percent, and it is estimated that up to 60 percent of employers currently run credit checks on prospective employees. Credit reports can contain inaccurate information, provide misleading indicators about a person’s financial responsibility, and fail to account for unavoidable circumstances such as illness, identity theft, or job loss. The Employment Opportunity Act will prevent workers from being denied employment based on incomplete and potentially faulty information.

Senator Carroll offered the following argument on the importance on the Employment Opportunity Act:

"Let's stop using a practice that does not even tell us whether we're getting a good employee. The best credit rehabilitation is a job. The best way to fix your credit is a job so you can start making payments…This is not a party line issue. People lose their jobs no matter what their political affiliation…who is their voice up here?"

Senate Bill 3 prohibits employers from using credit report information unless it is directly related to the position for which a candidate is applying, such as a money or asset management role. If the employer decides not to hire an individual based on information from their credit report, they must disclose this to the applicant. The employer also may allow a prospective employee to explain any negative information on the report. Employers found in violation of this law would be subject to civil penalty. Seven other states have enacted similar laws to prevent credit report discrimination.

The Employment Opportunity Act is part of the Senate Majority’s “Colorado Works Jobs Package,” a series of bills focused on increasing employment in the state.

The bill now heads to the House of Representatives for consideration.

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