By Lane V. Erickson, Attorney
Credit checks related to hiring and other employment matters are generally referred to as employee credit checks or employment credit checks. Idaho does not currently have a “credit check law” that restrict or prohibit an employer from conducting a credit check on its prospective or current employees. As a result, employers have the right to conduct an employment credit check to make hiring or other employment related decisions. A potential or current employer is free to check a credit report as part of an employment background check.
The main reasons employers conduct credit checks on job candidates are to help prevent theft and embezzlement, and to reduce potential legal liability for negligent hiring. Credit checks are often used by employers. In fact, a 2012 survey by the Society of Human Resource Management showed that 47 percent of the employers surveyed conduct credit checks on job candidates. Of those employers, 34 percent conduct credit checks only on certain job candidates and 13 percent do so on all job candidates.
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