Testimony from Vermont Workers' Center
From Vermont Workers' Rights Hotline Co-coordinator, Kim Lawson
February 22, 2012
I have been a volunteer on the Workers Center's Workers' Rights Hotline on and off for a number of years. People call the hotline because they feel they have been unjustly treated at work. They are referred to us by a number of state agencies including the Attorney General's office, the Department of Employment and Training, and more.
In recent years we have received calls from a number of people who feel they have been discriminated against or harmed by the employer's use of credit checks on potential or current employees. Two calls remain vivid.
In one case, a woman called who had worked for years at a Burlington-area convenience store as a clerk and cashier. This woman had good credit and by all accounts was a good worker. Her son was serving in the military in Iraq. One day she got a call that her son had been badly injured and was being shipped to a military hospital in Texas. She was told that it was unclear whether or not the man would live. She took some time off and went to be with her son. She returned to work and attempted to spend time both on her job and by her son's bedside but it became too much. She asked her Employer for a leave of absence so she could concentrate on being with her son. The employer said they didn't do leaves of absence but because she was such a good employee she could quit her job and be assured that if she returned and there was an opening, the store would rehire her. She left and spent many months with her son. Since she didn't have an income, she first went through all her savings and then relied on credit cards to pay for lodging, food, etc. Eventually her son got better and she was unable to return home. Unfortunately, she had ruined her credit rating in the process as she was often late on bill payments or unable to pay the credit cards at all. She returned to her former employer and asked for her job back. She filled out the application. She was then told that despite the fact that the Employer knew her to be an excellent and honest employee, she could NOT have her job back because her credit score was too low. Apparently this company has a policy that allows it to refuse employment to anyone with a credit rating below a certain score. I tried to talk to her into testifying when this bill was first introduced but she refused. She felt humiliated and could not agree to tell her story under any conditions. I told her I would tell her story for her.
In another case, a worker called who had been employed as a truck driver. He had worked for the same company for a number of years and had a good record. He had never received any discipline or complaints. He was a reliable employee. One day, his manager told him the company was letting him go. It seems this company also had a policy regarding checking employees credit and this policy extended to random checks at any time during the employee's work life. Again, the man had some bad credit and so was fired despite his good work record. He couldn't understand why something that should have not been any of his Employer's business in the first place was being used to terminate his employment. I also attempted to get him to testify but his number is no longer in service.
These are just two examples of the calls we get. I have also gotten calls from employees who have been told they were getting a job and even given a start date. Then before they could start work, they were told the offer of employment was rescinded because of a credit check. I have heard stories who were marched out their place of employment because of bad credit and told they could reapply for their jobs once they "cleaned up" their credit report. These workers asked how they could improve their credit where their source of income had been taken away.
Other states have passed bills which protect workers from this kind of discrimination. (see attached article) -- Vermont should do the right thing and pass this bill. It is even more important now as the bad economy has no doubt put enormous pressure on many people's ability to pay their bills on time and maintain their credit ratings.
Finally, there is absolutely no correlation between a person's credit rating and their performance at work. Employees are NOT more likely to steal if they have an unpaid hospital bill or an overdue credit card. As Eric Rosenburg of the TransUnion credit bureau told legislators in Oregon, “At this point we don’t have any research to show any statistical correlation between what’s in somebody’s credit report and their job performance or their likelihood to commit fraud,” he said in separate testimony to Oregon legislators in January 2010.
(See http://www.nytimes.com/2010/04/10/business/10credit.html for full story).
Those who are arguing at the state and federal level to support legislation curtailing or eliminating employers' ability to perform credit checks point out the practice unfairly tars the huge pool of people whose credit was damaged by layoffs, medical bills or other factors beyond their control. They also say it disproportionately screens out minorities. (see new york times article cited above).
In the absence of any evidence that credit checks benefit employers and in the face of actual evidence that such checks hurt Vermonters there is no reason not to pass this bill.