California law restricts the dissemination of credit information to an employee’s creditors who contact you.1 Although you can respond to requests to verify employment dates and job duties, only respond to third parties with employment information if a written release explicitly identifies the information to be disclosed and authorizes you to disclose it. To prevent inappropriate disclosures, require that requests for information be made in writing. Decline to answer questions relating to an employee’s prospects for future or continued employment, citing organization policy as the reason.

Consumer credit reporting agencies that furnish reports for employment purposes cannot report information on the age, marital status, race or creed of any consumer.2

California law generally prohibits the use of credit reports for employment purposes. For more information, see Obtaining Applicant and Employee Credit Report. If you meet one of the exceptions for using a credit report, you must provide written notice to the consumer before requesting that report. You must send the consumer a free copy of the report if they request it.3

In addition, you cannot discriminate against an employee or job applicant in employment solely because the individual has filed for bankruptcy.4

As a general rule, financial records are considered private records. Keep them in a confidential file separate from the employee’s personnel file.

1. Civ. Code sec. 1785.20.5

2. Civ. Code sec. 1785.18(c)

3. Civ. Code secs. 1785.18, 1785.20.5

4. 11 U.S.C. 525

Keeping Employee Information Private

Keeping Credit Information Private

Keeping Employee Information Private