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How medical debt can lead to disability discrimination

Approximately half of U.S. employers run credit checks on job applicants. Many say this information helps them gauge people's character and even job qualifications. As we noted previously on our blog, California Governor Jerry Brown signed a law in 2011 prohibiting most California employers from using this information for hiring and other employment decisions. (Obviously, there are exceptions – such as jobs involving national security.) Other states have similar laws. However, according to a December article on, the large majority don't.

If you move to a state without these protections, credit checks and employment decisions based on them are allowed under the federal Fair Credit Reporting Act. However, Massachusetts Senator Elizabeth Warren is sponsoring a bill, the Equal Employment for All Act, which would prohibit mandatory disclosure of this information by job applicants in more cases. Senator Warren points out that many times people get a bad credit rating because of circumstances largely beyond their control, such as economic downturns, job layoffs and medical bills.

Medical expenses can wreak havoc on a person's credit. They account for the majority of collection accounts. These are not just uninsured people hit with an unexpected illness or accidents. Some medical accounts end up in collection because a patient was unclear about just how much he or she was responsible for and how the insurance company was paying.

So what does this have to do with disability discrimination? A study by the Commonwealth Fund found that those with ongoing medical issues are more likely to have medical debt, and therefore to have this debt show up on a credit report. While the Americans with Disabilities Act makes it is illegal for an employer to discriminate against a qualified person because of a disability or illness, they can, in most states, deny a job to someone based on a credit report that includes unpaid medical debt, which is a type of disability discrimination.

Just because something is illegal in California, it doesn't guarantee that employers will do the right thing. People who believe they were turned down for a job based on credit history where that history is irrelevant have every right to seek legal recourse. California employment attorneys can advise people on the proper course of action to help ensure that credit problems don't stand in the way of getting a job.

Source: Fox Business, "Could Your Medical Debt Keep You From Getting a Job?" No author given, Feb. 03, 2014

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