AB 578

Current law prohibits discrimination in employment on the basis of age, race,

creed, color, disability, marital status, sex, national origin, ancestry, sexual

orientation, arrest or conviction record, military service, use or nonuse of a lawful

product off the employer's premises during nonworking hours, or declining to attend

a meeting or to participate in any communication about religious or political matters.

Current law specifies that it is an act of employment discrimination to refuse to hire

or employ an individual because of any of those bases.

This bill prohibits employment discrimination based on credit history. The bill

specifies, however, that it is not employment discrimination because of credit history

for an employer to request or use the credit history of an employee or an applicant

for employment if any of the following applies:

1. The employer has offered employment to the applicant and the credit history

of the applicant will be used for a purpose other than to refuse to hire the applicant

on the basis of credit history.

2. The employer has a bona fide purpose for requesting or using information

in the credit history of the employee or applicant that is substantially related to the

job-related responsibilities of the position in which the employee is employed or the

applicant is seeking employment and the employer discloses that purpose to the

employee or applicant in writing. The bill specifies that the positions for which an

employer has such a bona fide purpose include all of the following: 1) a position that

is managerial and that involves setting the direction or control of the business of the

employer or of a department, division, unit, or agency of the employer; 2) a position

in which the individual holding the position has access to personal information of the

employer or of any employee or customer of the employer, other than personal

information that is customarily provided in a retail transaction; 3) a position in

which the individual holding the position has a fiduciary responsibility to the

employer, including the authority to issue payments, collect debts, transfer money,

or enter into contracts; 4) a position in which the employer provides the individual

holding the position with an expense account, a credit card, or a debit card; or 5) a

position in which the individual holding the position has access to a trade secret or

any other confidential business information.

The bill also specifies that it is not employment discrimination because of credit

history for an employer to refuse to employ an individual or to bar or terminate an

individual from employment if the employer is any of the following:

1. Required under any state or federal law to inquire into the credit history of

an employee or applicant for the purpose of employment.

2. A bank, savings bank, savings and loan association, or credit union

(depository institution) that accepts deposits that are insured by the Federal Deposit

Insurance Corporation, the National Credit Union Administration, or any other

federal agency or an affiliate or subsidiary of a depository institution that accepts