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By and For Idiots

One of the myriad laws that went into effect here in Illinois on New Year’s Day “forbids employers from inquiring about an applicant or employee’s credit history or obtaining a copy of their credit report” in an ostensible effort to prevent employers “from discriminating based on a job seeker or employee’s credit history.” Some exceptions are made for certain environments – banks, financial institutions, etc. – but by and large you just can’t do it anymore.

As I see it, this – like countless other squishy squashy HR matters – is another which very simply can’t be subjected to an “either/or” proposition. Nothing in the business of HR is finite enough to take that tack. On one hand, an employee’s ability to pay their credit cards on time might not be entirely indicative of their ability to show up to work on time. On the other hand, it might just be. That’s a simple example, but the point is that a hiring decision – any employment decision, for that matter – is complex, dynamic, and based on a bunch of facts, context, perspective and even assumptions which must all be pulled together to create one (substantially) complete picture. The more we know about someone, the more complete that picture is. Good HR pros use credit checks to help paint the picture. Good HR pros understand “a job seeker’s ability to earn a decent living should not depend on how well they are weathering the greatest economic recession since the 1930s.” But they also understand how to differentiate those who fit this profile from those who are perpetually irresponsible in managing their commitments and obligations. But above all, good HR pros don’t use any one data point as a case-in-point determinant in employment decisions. If we did…or if we could…we’d all be out of a job.

Unfortunately, most employers just aren’t smart enough and generally don’t have the integrity to responsibly delve into their employees’ lives. And as a result, State Legislatures are forced to give us these Idiot Acts. Now we’re all limited – even the best of us – in our ability to make meaningful decisions because dumb-ass employers:

  1. Don’t listen to HR’s sound counsel and advice,
  2. Don’t use HR to actually analyze ALL of the data points in order to offer sound counsel and advice,
  3. Can’t trust HR to offer sound counsel and advice because those departments are under staffed and under qualified, or
  4. Don’t have a real HR department…period.

What’s the fix? I can tell you it’s not about spending hundreds of millions of taxpayer hard-earned jack to fund meaningless legislation. How about holding companies accountable for not having or not using qualified HR professionals to protect them from making stupid employment decisions?! How about educating employers on the value of staffing their ranks with smart people who are trained and well-prepared for exactly these kinds of things?! Imposing yet another rule on an Idiot just means they have yet another rule to disregard. Employers will always find a way to do stupid things as long as they don’t have someone they can trust, respect, and rely upon to keep them on the straight and narrow. And if I had to place my bets on who better to do that – HR or the State – I’d go with the former any day of the week.

Image Credit: Amazon

  • Chris Ferdinandi – Renegade HR


    This may be the first time I actually completely disagree with you.

    This law should be passed nation-wide. Unless your role involves fiduciary responsibility, credit checks have NOTHING – zero, nada, zip – to do with your ability to do a job.

    Of course, interviews rarely gauge a person’s ability either. And yea, I’m cool with tossing those out the window as well (at least as a tool to gauge ability).

    Most of the stuff we use to hire people is done because it’s trendy or it’s how we’ve always done things. And you know what? We get it wrong at least half the time. At least half!! That’s insane. The only other people who can have such horrible records and still keep their jobs are weather men and baseball players.

    I say hooray for this law. Ban the use of discriminatory and irrelevant selection tools. Yes. Do it!

    - Chris
    Chris Ferdinandi – Renegade HR´s last [type] ..Your social media policy sucks!

  • Charlie

    And this might be the first time I think you completely missed the point (but value your perspective none-the-less). It’s not about the law – it’s about the fact that we even need one. As you quite clearly state, we make bad decisions 50% of the time any way. No law is going to make that any better. And if used as one of many important data points, credit history might very well have something to do with gauging one’s success in any given role. “Zero, nada, zip” is an absolute statement. And if you think HR is about absolutes, you’re sadly mistaken my friend.
    Charlie´s last [type] ..By and For Idiots

  • Lance Haun

    I agree, at least philosophically. Most workplace legislation falls in the “protecting the idiots” house of cards. Consider another sector for example. Should the myriad the post-Enron/Worldcom legislation be necessary? If people in their financial departments were doing their jobs, absolutely not. The government is reactionary in that way.

    I think in practice, it becomes more problematic to say the government should butt out absolutely. The amount of damage an abusive employer can lay on an employee is much more than the average employee can lay on an employer, even abusively. In that way, the law becomes a power equalizer not just for the prevention aspect but also for the basis to take legal action against an “idiot” if prevention doesn’t cut it.

    As you say, HR is devoid of absolutes and I think government’s role in the workplace is no exception. And even if you philosophically disagree with their role, they aren’t going away. The tactic organizations like the US Chamber of Commerce and SHRM have taken when testifying on our behalf is to take a hardline stance against any legislation. Instead of working on getting concessions in legislation that is likely to pass, they get shut out completely and you get legislation like IL where you have very limited flexibility.

    I think being realistic and asking for representation that works for flexibility and levity among the activist government we have is the best short term solution right now. Long term, businesses need to grow some courage and become a real advocate in the community and leadership if they want to effect any change.

    Lance Haun´s last [type] ..HR Stars Series- What I Learned and Who I Missed

  • Chris Ferdinandi – Renegade HR

    You’re right – I completely missed the point! Thanks for the clarification (and glad you enjoyed my rant nonetheless)!
    Chris Ferdinandi – Renegade HR´s last [type] ..Your social media policy sucks!

  • Rachel Salley

    While I would have to agree that most laws are created for the minority of HR practitioners and employers that are idiots, I think that we do need legislation that protects the employees. Companies normally have massive resources at their disposal to discriminate or simply mistreat employees, and get away with it. It’s the employees who suffer and the employees who typically have no recourse over these organizations. While I don’t believe in government take over any more than the next person, I do believe that employees need to be protected and need to have resources available to them to do just that.

    I hate as much as you do that we even need to have such laws but I do agreed with Chris that we need to do away with any hiring processes that are discriminatory on their face, i.e. credit checks. My credit does not make me a better or worse candidate/employee. How far will it go when we start allowing employers to delve so far into our personal lives to make a hiring decision. Thank goodness they passed a law that says employers can not use genetic information to make hiring decisions. Again, only the minority would use that information facetiously, but it is exactly that minority that these laws are protecting candidates/employees from.

  • Dave

    One of the reasons these laws are passed are to prevent “disparate impact” against certain protected classes. Minority applicants, for example, tend to have lower credit ratings. Credit checks can weed them out disproportionately, even though they may otherwise be qualified. And how many college graduates are behind on their school loans? (yes, I know college grads aren’t a protected class, but you see my point).

    But legislation is not the answer here. We’ve gotten (almost) to the point where applicant A and applicant B can’t be evaluated without running afoul of some law or regulation. Instead of making things better, it seems to me we are opening up another Pandora’s box of litigation, and throwing common sense out the window. We can’t legislate a “perfect society,” although many people seem to think we can.

  • Charlie

    Thanks for the great dialog – all really relevant, thoughtful, and respected points. The point of my posts sometimes gets lost on readers…don’t take it personally. To clarify: I will concede (reiterate really) that the government has a role in protecting our employees. They have that role, though, only because a couple (or a lot) of bad apples spoil the bunch. Your parallel to Enron, Lance, is spot on. While I maintain that credit checks can in fact lend insight to an applicant’s candidacy, I never said that insight is particularly important (or relevant) in the grand scheme of things. I just said a good HR team should be able to help their organizations figure that out better than any new law from the state legislature ever will. This shouldn’t have to be about discrimination; it should be about sound business practices. And when we have the state legislature (especially Illinois’) teaching us about sound business practices, we’re all in trouble.
    Charlie´s last [type] ..By and For Idiots

  • HR Introvert

    I like Dave’s point on this. Just as hiring based on testing results has forced better science and understanding of effective candidate evaluations, I would think that there would be evidence as to what credit history implications are on hiring. Rather than ban them, let employers use them at their own peril. I agree with you on this Charlie, we shouldn’t be legislating every potential pitfall, but employers need to continue to assure their processes don’t have disparate impact.
    HR Introvert´s last [type] ..Time For Due Diligence on Personal Objectivity

  • Charlie

    @HRIntrovert -well said. thanks.
    Charlie´s last [type] ..Board that Baby Up