The Assembly Labor Committee advanced a bill Monday that would stop some employers from requiring credit checks on current or prospective employees.
The bill, which its Democratic sponsors say is intended to fight employee discrimination based on credit report information, would not apply in all cases.
Employers required to perform credit checks by law or those who have suspicion that an employee has "engaged in a specific activity that is financial in nature and constitutes a violation of law" would be exempt.
Also, employers may conduct checks if an applicant's credit history is a legitimate occupational qualification - such as for a job dealing with finances.
But the idea that a credit check is just part of the hiring process? Assemblyman Ruben Ramos (D-Hoboken) says that should no longer be the case.
"In most cases I see no legitimate reason for making a credit check a condition of employment," Ramos, a bill sponsor, said in a statement after the vote. "Let's be fair here and require credit checks only when an employee will be working in a job that's financial in nature. In other cases, it just simply isn't necessary and is quite simply unfair."
But several members of the business community testified in opposition of the measure, claiming the bill would add another unnecessary level of business regulation and potentially put employers at risk.
In submitted testimony to the committee, New Jersey Business & Industry Association vice president Stefanie Riehl wrote that credit checks can be a tool to help employers assess a worker's performance and rarely are the reason an applicant doesn't get hired.
"Given economic conditions, many employees perform a wide variety of duties that are not always specifically mentioned in their job descriptions and include access to cash, other assets or confidential information," Riehl wrote. "Companies that conduct credit checks are not fishing for reasons to disqualify candidates but are doing their due diligence to make sure that they are not putting their business interests or other employees at risk."
Also testifying was Michael Egenton, senior vice president of government relations for the New Jersey Chamber of Commerce. Egenton said that the bill would "add to the cost of doing business" in the state and could prove especially detrimental to the business community as it is compounded with the upcoming minimum wage hike and the continued rollout of the Affordable Care Act.
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