New Laws on Credit Reports for Employment Purposes

On January 1, 2012, two new State laws became effective that limit the use of consumer credit reports for employment purposes.

  1. California Labor Code section 1024.5 now provides that employers cannot use a consumer credit report for employment purposes unless the position falls into one of the expressly enumerated categories outlined in the legislation.
  2. The Consumer Credit Reporting Agencies Act (California Civil Code section 1785.20.5) requires that the written disclosure that an employer was already required to provide to an applicant or employee prior to obtaining a consumer credit report must also now include the specific basis for the report and must allow the individual to receive a copy of the credit report.

Refer to the flyer in Related Information from the Office of General Counsel outlining the details of these two new laws. Currently, the University does not require consumer credit reports as part of the standard background check process for the majority of positions on the campus. However, there may be some positions where the critical or sensitive nature of the position may justify requiring a job-related credit report.

For consultation on these issues, contact Director Elaine Peters at epeters@chr.ucla.edu.

Campus Human Resources, Employment Services
Phone: (310) 794-0890 | Fax: (310) 794-0895