New limitations on credit checks for prospective employees

Perhaps one of the most telling indicators of a job applicant’s character is his or her spending habits. Do they spend wisely? Do they pay their bills and taxes on time? Or is his or her credit record a mess of late payments and blacklist entries? The answers to these questions can be an indicator of work ethic.

In June of 2019 Circular 4/2019 was released by the National Credit Regular in which guidelines for accessing the credit information of job seekers were set out. According to Regulation 19 (12), the following must be true before a potential employer, employment agency, recruitment consultant, or staffing company may run a credit check:

1. The position for which the individual is being interviewed relates directly to the handling of cash or finances in the business
2. The responsibilities set out in number one (1) above are clearly outlined in the job description

As such the credit history of candidates whose job description do not match number two (2) above may not be obtained, even when the candidate gives his or her consent.

Where both these criteria are satisfied, the credit check process requires the following:

1. Written consent from the prospective employee
2. A job description clearly outlining the prospective employee’s responsibilities relating to cash and finances

This documentation should be kept for a period of no less than three years.

Does this mean employers have to take candidates who do not satisfy the criteria for a credit check at face value? Not necessarily.

Determining character: Pre-employment polygraph testing

Pre-employment polygraph testing can be used as an effective alternative to a detailed credit check. It offers the prospective employer, consultant, or agency more freedom with regard to determining the character of a prospective employee than perhaps a credit check, given the flexibility of the test’s question-answer format.

Possible lines of questioning relating to a candidate’s character include:

• Reasons for leaving previous employment
• Determining truthfulness of achievements and qualifications
• History of substance abuse

Pre-employment polygraph testing can also be extended to determine truthfulness where a credit check might fall short to protect other members of staff, and the business:

• Criminal actions despite no arrest or conviction
• Eliminating the potential for corporate espionage
• Affiliations with criminal syndicates and other groups

Of course, one potential draw back is that pre-employment polygraph testing may be considered too extreme for less business-critical positions such as custodial staff. But even then, other methods of inquiry exist to ensure that the person you’re hiring has a spotless background and is of sound character.

For more information on credit checks, background screening methods, or pre-employment polygraph testing, call us on 0861 274 911 or email info@csinvestigate.co.za.