Frequently Asked Questions: Employee Background Checks

Credit Checks

Is an employer allowed to perform a credit check on an employee or prospective employee?

An employer may perform a credit check on an employee or prospective employee if the employer intends to use the information for employment purposes. Such purposes include considering new hires, granting promotions, reassigning employment duties or determining whether to retain someone as an employee.

When should the employer perform the credit check?

For prospective employees, the credit check should be completed only after a conditional offer of employment has been made in writing. The main reason being that non-financial information about the candidate may be discovered through the credit check process; if the information concerns protected grounds of discrimination and a decision is made not to hire the employee, the employer could become exposed to liability.