What's credit got to do with it, anyway?

As we discussed in an earlier post, more than a dozen states are working toward banning credit and employment checks on job applicants. It's a move that has gained widespread support. In fact, in a public meeting held by the EEOC last fall, a group of experts examined whether it's even appropriate to consider credit history as a screening tool. The general consensus? With unemployment reaching record levels throughout the country, credit checks are unfairly excluding otherwise qualified applicants from legitimate job opportunities.They can negatively impact certain protected groups, such as women and people with disabilities; they are a poor, or unreliable, predictor of job performance; and they are often inaccurate or riddled with errors.

Here's the latest on the state front:

Maryland has joined Hawaii, Washington, Illinois and Oregon in curbing the use of employment credit reports. The Maryland Job Applicant Fairness Act prohibits employers from exploring a person's credit history as a condition of employment. Of course, there are exceptions for financial institutions and for a "bona fide purpose that is substantially job-related," such as for positions involving money-handling or other confidential job duties. And in those cases, employers must disclose in writing to the employee or applicant their intent to pull a credit report.

For Maryland employers, the law goes into effect October 1, 2011. Violations of the law are subject to fines up to $500 for an initial offense and up to $2,500 for repeat violations.

For the rest of the nation's employers not affected by state-specific screening guidelines, you may want to revisit your hiring practices - and determine just how essential (or necessary) credit checks are to securing qualified applicants.

What's credit got to do with it, anyway?

People say - and do - the craziest things in job interviews

HR professionals and hiring managers know that interviews can be stressful for even the most competent and composed applicants. After all, they’ve been on the other side of the desk before. Yet, there are certain scenarios that defy reasonable explanation and leave them scratching their heads in disbelief.

To prove our point, we’ve compiled a “Top 10” list of job interviews that went sour … and why:

1) “I had a candidate open his briefcase, pull out a package of cheese crackers and a juice box, and munch away on his midday snack while I was asking him questions. He said he’d had no time to eat because he was interviewing all day!”

2) “How about the guy who forgot dark socks to wear with his suit so he colored in his ankles with a black, felt-tip marker?”

3) “I’ve had numerous interviews where the person’s cell phone goes off and rather than apologize and quickly turn off the phone, the person checks the number. So rude.”

4) “When I asked this particular candidate (a 20-something with about five years of work experience) why she was looking to change jobs, she answered, ‘Well, I’ve been sitting around twiddling my thumbs for the last few months.’”

5) “My most unique experience was the candidate who told me he was abducted by an alien who told him to apply for the job – and to report what he learned back to his alien leaders.”

6) “I wished I had never offered this particular woman a cup of coffee because when she set the cup down on my desk, she immediately knocked it over and spilled the piping hot liquid all over my papers and files.”

7) “I’ve seen some interesting clothing choices through the years, but the best ever was the man who showed up in a powder-blue leisure suit, straw hat and flip-flops. And no, he wasn’t applying for a creative position or auditioning for a part in a play!”

8) “Granted, this particular candidate told me he wasn’t feeling well before the interview, but, about 15 minutes into it, he got this strange look on his face, jumped up out of his chair, and promptly threw up all over my office floor.”

9) “After the initial interview with an applicant, I explained the final step in the hiring process would be drug testing. She then responded, ‘Oh, what type of drugs do you want me to test?’”

10) “Before the interview even started, I had a candidate ask me to see where he’d be seated when he got the job. He said he needed to check out the space to make sure he’d have enough privacy!”

Uphold your role in the interview process

On the flip side, you don’t want to be the reason the job interview was a flop. When you’re responsible for interviewing applicants, take the time to define the job and its requirements, schedule interviews only after you’ve reviewed the resume and/or application (and can give the candidate your full attention), and steer clear of illegal interview questions concerning an applicant’s age, race, sex, disability, religion, national origin, pregnancy and any other protected classification.

And if a candidate tells you he’s fighting a bad case of the stomach flu, you may want to reschedule the interview!

People say - and do - the craziest things in job interviews

The show must go on: Judge 'em for their talents, not their financial trip-ups

Sure, there was a time when she thought she could be a rock star. But the only thing that rose to the heights of her imagination was her credit card debt. Hey guitars and amps are expensive … and she really thought that next gig would be her ticket to stardom.

Her life looks a lot different now. All those unpaid bills – and her rock-star dreams – are both things of the past. Yet her previous credit history haunts her like that horrible performance in Poughkeepsie. Should her previous financial flops keep her from getting a job now?

Some employers say yes. And some legislators are out to change that.

Approximately 13 percent of employers surveyed by the Society of Human Resources Management (SHRM) said they run credit checks on all job applicants - with another 47 percent considering credit history.

Employers say they run checks to learn more about an applicant’s honesty and sense of responsibility. Lawmakers say the practice is unnecessary and keeps people in debt because their past financial problems prevent them from obtaining work.

Currently, lawmakers in at least 16 states have proposed outlawing credit checks. And late last month, the EEOC held a public meeting to address the use of credit history as a screening tool. With unemployment reaching such high levels throughout the country, there's growing concern that credit checks are unfairly excluding certain applicants from legitimate job opportunities. (Keeping our aspiring performer from earlier singing the blues when she should be pulling in a steady paycheck.)

Representatives from a variety of stakeholder groups shared their views at the public meeting. Chi Chi Wu of the National Consumer Law Center (NCLC), for instance, explained that credit histories create a “fundamental Catch-22” for job applicants during this time of high unemployment and high foreclosures. She adds: “You can’t re-establish your credit if you can’t get a job, and you can’t get a job if you’ve got bad credit.”

Other concerns expressed in the meeting are that credit checks:

• can negatively impact certain protected groups, including women and people with disabilities;
• are a poor, or unreliable, predictor of job performance; and
• are often inaccurate or riddled with errors.

It will be interesting to see how this issue plays out in the coming months. Personally, I feel that there a lot more reliable indicators of an applicant’s skills and trustworthiness than their credit history. I also know too many solid, hard-working professionals who fell victim to the real estate bust and economic downturn … and whose financial challenges play no part in their “hireability.” These people are not washed-up rock stars who need to turn in their mics and guitars.

In the meantime, remember that the Fair Credit Reporting Act (FCRA) requires employers to obtain an applicant’s written consent before requesting a credit report. And if you decide not to hire or promote someone based on details in the report, you must provide a copy of the report and let the applicant know of his or her right to challenge the report.

The show must go on: Judge 'em for their talents, not their financial trip-ups