Screening an employee’s credit may be illegal

It may be illegal for an employer to conduct a credit check of a job applicant or an employee, according to a recent letter from the Equal Employment Opportunity Commission. Even though credit checks don’t violate any federal employment laws, they could violate discrimination laws if they have a disproportionate impact on women, minorities or other protected groups, the EEOC says.

However, an employer can still conduct credit checks if it can show that doing so is necessary for it to operate safely or efficiently. For instance, screening the credit of a job applicant or employee might be appropriate if the person is to handle large amounts of cash.Some states are moving toward banning credit checks altogether by introducing laws that prohibit the practice.