Should Prospective Employers use Financial Information

[M. Bachmeier]

Should prospective employers have access to financial information about prospective employees? Is access to that information useful enough at a level where an individual's rights to privacy should be disregarded? Should employers be allowed to ask for a credit check?

It is my assertion that any credit information about an individual is viewed as a 'fact' WRT the greater body of statistical information in a population leading to misuse and abuse by prospective employers, often without the understanding of how the tools should be employed.

Further, people disadvantaged by circumstances beyond their control can become victims of both ignorant and willful misuse of such data.

I do encourage as many views/opinions from as many disciplines as possible and a yes or no opinion (should employers [or any non-financial institution] have access to credit information, with or without consent [which is problematic in a prospective employment situation])?

 

[D H]

Should prospective employers have access to financial information about prospective employees?

Should? I think you mean "should not". You are asking for a change in the status quo. Employers can obtain (limited) financial information about prospective employees, but only if the employee gives the employer permission. The hitch is that a prospective employee who refuses permission will most likely be deemed as an ex-prospective employee.

The truth of the matter is that there is a high correlation between credit problems and problem employees in certain kinds of jobs. Managers are privy to all kinds of financial information, technical employees are privy to all kinds of intellectual property, and accountants have access to company funds. Managers, technical experts, and accountants have made companies go bankrupt by selling information to competitors or by stealing from the employer. One purpose of a pre-employment credit check is to nip these problem employees in the bud. Another reason is that the credit check is a way to verify the veracity of a candidate's employment history.

 

[M. Bachmeier]

Should? I think you mean "should not". You are asking for a change in the status quo. Employers can obtain (limited) financial information about prospective employees, but only if the employee gives the employer permission. The hitch is that a prospective employee who refuses permission will most likely be deemed as an ex-prospective employee.

The truth of the matter is that there is a high correlation between credit problems and problem employees in certain kinds of jobs. Managers are privy to all kinds of financial information, technical employees are privy to all kinds of intellectual property, and accountants have access to company funds. Managers, technical experts, and accountants have made companies go bankrupt by selling information to competitors or by stealing from the employer. One purpose of a pre-employment credit check is to nip these problem employees in the bud. Another reason is that the credit check is a way to verify the veracity of a candidate's employment history.

At first I would have said you missed the point, but you obviously have not. You should also be aware that many prospective employers access that information without permission.

So, because there is a correlation between financial strife and dishonesty we should damn them all? The poor are obviously all thieves (my comments... not a direct comment on yours)?

Employment history can be obtained through cooperation with government organizations.

A criminal record check can reasonably determine criminality.

There is no direct reason why a prospective employer need have access to a prospective employee's personal financial information. All relevant information could be obtained by other means.

Also, WRT to your comment about an ex-prospective employee, If that person has the right to refuse personal information then they should have the right to do so without discrimination.

Correlation does not equal causality. Being poor does not equal criminality. Such high risk groups could easily include elderly, people with physical limitations, people with health problems and more.

 

[D H]

Say what??

I don't know about other countries, but in the US, an employer cannot check an employee's (or potential employee's) credit report without approval. It's illegal. Similarly, an employer cannot obtain employment history "through cooperation with government organizations." That too is illegal.

Employers are not discriminating against the poor. They are discriminating against bad risks. A new hire fresh out of college with a large student loan debt because her parents were poor: That's expected. That person is not a risk. A new hire fresh out of college who has already had a Mercedes repossessed but has no college debt (e.g., Mommy and Daddy gave the kid a huge allowance to cover tuition and a new car): That's not expected, and that person is a huge risk.

 

[M. Bachmeier]

Say what??

I don't know about other countries, but in the US, an employer cannot check an employee's (or potential employee's) credit report without approval. It's illegal. Similarly, an employer cannot obtain employment history "through cooperation with government organizations." That too is illegal.

Employers are not discriminating against the poor. They are discriminating against bad risks. A new hire fresh out of college with a large student loan debt because her parents were poor: That's expected. That person is not a risk. A new hire fresh out of college who has already had a Mercedes repossessed but has no college debt (e.g., Mommy and Daddy gave the kid a huge allowance to cover tuition and a new car): That's not expected, and that person is a huge risk.

It's illegal in Canada as well, but some do access information without consent because it's easy to do.

What I mean by cooperation with government is: In order to restrict financial data government and business would need to work together to provide an alternate way to confirm employment and other needed information. The old fashioned way was to call previous employers.

There's more than one kind of poor. A lot of people are having to deal with financial problems they've never had to deal with before. Some make mistakes trying to push credit in a circle out of desperation. You don't need a downturn in the economy to see that happen.

By the way what credit report would provide the kind of information that would lead to your example.

 

[D H]

It's illegal in Canada as well, but some do access information without consent because it's easy to do.

If that's the case (and you need to prove it is the case), there's no need new laws. What's needed is enforcement of the laws that already exist.

This is a scientific site. You have been making some rather extravagant claims here: That employers are colluding with the government to find employment history, and that employers use credit checks to discriminate against the poor. You need to prove these claims.

 

[M. Bachmeier]

If that's the case (and you need to prove it is the case), there's no need new laws. What's needed is enforcement of the laws that already exist.

This is a scientific site. You have been making some rather extravagant claims here: That employers are colluding with the government to find employment history, and that employers use credit checks to discriminate against the poor. You need to prove these claims.

I will say this only once. Do not misquote me. I have implied no collusion. I did not say that employers were (on the whole) discriminating against the poor, but could have chose my wording more carefully. If you have a credit report for someone who is poor or newly poor, you will have a higher incidence of default. While I concede that such information may be an indication of unreliability, it is not a proof of cause and effect.

Even though society must use statistical information when dealing with individuals, such quantification of probabilities is not meant to be used to make predictions about individuals.

As for people accessing credit information without the legal right to do so, I should not have advanced that argument without proof. And, while I may/may not have been able to prove that assertion in the past, I'm not able to give any concrete proof at this time.

Yes this is a scientific site, but I'm not asserting that correlational data be used as representing cause/effect. Social science can rarely show cause and effect, so opinion is unavoidable.

We have both engaged in inflammatory language, but my use was meant to be rhetorical, not to be directly associated with your opinion. If I have offended you by my injudicious use I apologize.

I will attempt to summarize the bases of my argument with an example.

Medical bills: A credit report will not contain any specific information about any medical care received, but will show payment history, amount owing and any late payments or default.

On the surface that might seem reasonable, but a prospective employer would be aware that a prospective employee's (himself or a member of his family) has incurred substantial medical debt. An employer who provides benefits might see this as a potential financial risk because insurance premiums are based on usage. Even if the prospective employer is not attempting to actively discriminate, the information may still influence the decision making process.

I could probably come up with multiple examples involving different scenarios, and it does not require that the prospective employee be poor.

I also can't see any way to provide useful credit information to an employer without the potential for inappropriate discrimination.

 

[wuliheron]

Legalities are increasingly mere formalities. The president of the US himself recently had to threaten congress that he would veto a bill to repeal habeas corpus! He has even threatened to start putting corporate CEOs in jail for repeatedly defrauding the medicaid system and employers for hiring illegal immigrants, being sure to give them ample warning rather then just throwing them in cells and throwing away the key as you might any other common criminal. Wall Street bankers routinely defraud investors out of hundreds of millions, receive a slap on the wrist, are forced to sign promises never to do it again, and then get caught doing it again repeatedly.

Its all so much ritualized formality designed to favor those with enough money and certainly the larger employers can afford them. Demanding prospective employees provide their financial information is among the least objectionable and more legal activities they tend to participate in. You might as well be a Lilliputian demanding to know whether we should start by cracking the small end of the egg or the large one. In the larger context its just so much semantic splitting of hairs.

 

[M. Bachmeier]

Legalities are increasingly mere formalities. The president of the US himself recently had to threaten congress that he would veto a bill to repeal habeas corpus! He has even threatened to start putting corporate CEOs in jail for repeatedly defrauding the medicaid system and employers for hiring illegal immigrants, being sure to give them ample warning rather then just throwing them in cells and throwing away the key as you might any other common criminal. Wall Street bankers routinely defraud investors out of hundreds of millions, receive a slap on the wrist, are forced to sign promises never to do it again, and then get caught doing it again repeatedly.

Its all so much ritualized formality designed to favor those with enough money and certainly the larger employers can afford them. Demanding prospective employees provide their financial information is among the least objectionable and more legal activities they tend to participate in. You might as well be a Lilliputian demanding to know whether we should start by cracking the small end of the egg or the large one. In the larger context its just so much semantic splitting of hairs.

Unfortunately you may be right about being a Lilliputian on this subject, however, I was attempting to address the (personally perceived) wrong and the weak use of statistical probability resulting in some people being marginalized without due cause.

But, be honest, what's the point of having the right to refuse access to financial information when it would assure discrimination.

That's like saying you have a right to wear a brown suite, but if you do people will throw tomatoes at you and nobody will try and stop them.

I won't try to belabor this subject, but to say that this along with other small encroachments upon privacy are (to me) a slippery slope that may lead to a society where the institutions will only be able to function in a realm of almost no personal privacy. It would take a stronger man than I to willing give up most aspects of personal privacy.

 

[ThomasT]

Should prospective employers have access to financial information about prospective employees?

Yes, I think they should. It's somewhat revealing of a person's character. Would I base hiring a person on their financial history? Not necessarily. But for big corporations that's the first step in the 'weeding out' process.

Is access to that information useful enough at a level where an individual's rights to privacy should be disregarded?

Imho, a person's financial history should be open to public access -- insofar as it has to do with their public financial dealings, and, as I mentioned, this can be and, imo, is an indicator of the sort of trustworthiness that employers are interested in learning about.

Should employers be allowed to ask for a credit check?

Sure. Why not?

It is my assertion that any credit information about an individual is viewed as a 'fact' WRT the greater body of statistical information in a population leading to misuse and abuse by prospective employers, often without the understanding of how the tools should be employed.

I agree. But I think that a large scale employer seeking the best people for a job has to begin somewhere in the 'weeding out' process. Credit history is a good place to begin.

Further, people disadvantaged by circumstances beyond their control can become victims of both ignorant and willful misuse of such data.

I agree. But I don't think that the data is necessarily either ignorantly or willfully misused.

The bottom line, imho, is that people who have bad credit histories are bad risks.

 

[Jimmy Snyder]

When microcomputers first came out, I got into programming as a career. At that time, a company might need ten programmers. They were lucky if they got five applicants, one only had experience with big iron mainframes and two were lying about their backgrounds and had never seen a computer before. The IT dept told the HR dept to hire all five and trained the ones that needed it.

Things have changed considerably. Now a company needs one programmer and gets a hundred applicants. They don't even have the time to read all of the resumes. HR skims them and IT only hears about the ones that pass the HR gauntlet. You have experience with all eight of the technologies they need, but so do two others. One has a better credit rating than you and so you haven't got a chance. They do it because they can. If there were a shortage of applicants, you wouldn't see the credit checks.

 

[wuliheron]

If there were a shortage of applicants, you wouldn't see the credit checks.

There will never be a shortage of applicants with the US importing talent and outsourcing jobs to foreign countries where wages are cheaper. The US has essentially become the modern day Roman Empire where we import the best and brightest and export jobs that require higher wages locally. We even have some 13 million slaves in the form of illegal immigrants driving down wages for the working poor, while their employers keep contributing millions to local elections to ensure they are allowed to keep hiring them illegally and continue to avoid paying taxes much less reasonable wages.