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I have a potential employee that has applied to our cleaning services company in Georgia. She is concerned about a past bankruptcy that may be uncovered when we do a credit check on her. I understand that we are not authorized to make a hiring decision based on her bankruptcy. Please advise.

That is correct. According to the Bankruptcy Act, is unlawful to discriminate against an employee during or a potential employee based on the employee’s past bankruptcy. The bankruptcy should not influence the decision to hire the new employee and it should not affect a current employee’s status within the company. The Bankruptcy Act is a federal law, so it not only applies to your Georgia company, but also to companies in states across the U.S.

If the employee was going to be hired or fired for reasons other than the bankruptcy, then the bankruptcy should also not affect the employee’s status. For example, you can choose to hire or not hire an employee for reasons other than the bankruptcy. You may have to prove these other reasons, though, if the employee asks you to.

Also, it should be noted that Title VII protects employees and candidates from being rejected from the applicant pool or fired because of poor credit. The Equal Employment Opportunity Commission (EEOC) oversees the hiring and firing of employees based on their credit rights and clearly defends employees that have been fired or not hired due to their credit history.

According to the Fair Credit Reporting Act, employees should only have a credit check performed on them if their credit is important to the job duties of the company. As such, unless your employee handles money, accounts, or other finances, it may not be important to perform a credit check at all simple because of the nature of your cleaning business. However, if you were an accounting firm, you would definitely want to perform a full credit check and could use the information you find in the credit check to make your decisions.

As such, you can tell the potential employee to rest easy knowing that her past bankruptcy will not affect her potential position within your company.