Use of Credit Information in Employment 2009 Legislation

Last Updated: November 24, 2009

NCSL Staff Contact: Heather Morton, (303) 364-7700, Denver

The chart lists the state legislation introduced during the 2009 legislative session relating to the use of credit information in employment. This document was used as a handout for the 2009 Fall Forum session, "Your Credit Score and You."

NOTE:  If you have questions regarding whether an individual employer can use credit information in employment decisions, please contact your state department of labor. NCSL is unable to provide assistance or advice in individual cases.

CA | CT | HI | IL | MI | MO | NJ | NY | OH | PA | TX | UT | WA | WI
STATES
TITLE
Alabama
none
Alaska
none
Arizona
none
Arkansas
none
California
Vetoed by governor 10/11/09
Prohibits an employer, with the exception of certain financial institutions, from obtaining a consumer credit report for employment purposes unless the information is (1) substantially job-related, meaning that the position of the person for whom the report is sought has access to money, other assets, or confidential information, and (2) the position of the person for which the person is sought is a position in the state Department of Justice, a managerial position, a position in a city, county, or both city and county, that of a sworn peace officer or other law enforcement position, or a position for which the information contained in the report is required to be disclosed by law or to be obtained by the employer.
Colorado
none
Connecticut
Passed House 5/12/09
Bans an employer, its agent, representative, or designee, from requiring, as a condition of employment, an employee or prospective employee to consent to the creation of a credit report that includes information about his or her (1) credit score; (2) credit payment history; (3) credit, savings, or checking account balances; or (4) savings or checking account numbers. The bill creates exceptions to this ban such as when a credit report is substantially related to the person's job or potential job. It permits complaints regarding potential violations of this ban to be filed with the labor commissioner. The commissioner must hold a hearing whenever a party to the complaint requests it, and violators face a $ 300 civil penalty for each offense. Aggrieved parties can appeal to the Superior Court.
Delaware
none
District of Columbia
none
Florida
none
Georgia
none
Guam
none
Hawaii
Veto overridden 7/16/09, Act 1
Establishes employer's use of individual's credit history in hiring and termination decisions as an unlawful discriminatory practice; provided that the individual's credit information directly relates to a bona fide occupational qualification and that employers expressly permitted to inquire into credit history for employment purposes pursuant to any federal or state law, managerial and supervisory employees, and certain financial institutions are exempt.
Idaho
none
Illinois
Creates the Employee Credit Privacy Act. Prohibits employers from inquiring about or using an employee's or prospective employee's credit history as a basis for employment, recruitment, discharge, or compensation with some exceptions. Prohibits an employer from retaliating or discriminating against a person who files a complaint under the Act, participates in an investigation, proceeding, or action concerning a violation of the Act, or opposes a violation of the Act. Contains provisions concerning waiver and remedies.
Indiana
none
Iowa
none
Kansas
none
Kentucky
none
Louisiana
none
Maine
none
Maryland
none
Massachusetts
none
Michigan
Prohibits employers from making certain recruiting or hiring decisions based upon an individual's credit history; prohibits employers from making certain inquiries; prohibits certain waivers; prohibits retaliation; and provides remedies.
Minnesota
none
Mississippi
none
Missouri
This bill makes it an improper employment practice for an employer to refuse to hire or to discharge, reduce compensation, or modify any condition of a person's employment based on the individual's credit score or credit history, unless the credit information is directly related to the duties and performance of the employee or the overall operation of the employer's business.
Montana
none
Nebraska
none
Nevada
none
New Hampshire
none
New Jersey
This bill makes it a violation of the “Law Against Discrimination,” P.L.1945, c.169 (C.10:5-1 et seq.), for an employer to discriminate against an individual in hiring or employment because of an individual’s credit history or financial status. The bill also prohibits an employer or employment agency from expressing to an applicant for work any limitation, specification or discrimination against the applicant because of the applicant’s credit history or financial status. Finally, the bill prohibits an employer or employment agency, unless required by law to do so, from making inquiries about the credit history or financial status of an applicant for employment.
New Mexico
none
New York
Prohibits the use of job applicant's personal credit history as hiring criteria, unless a reasonable nexus exists.
North Carolina
none
North Dakota
none
Ohio
Amends §§4112.02, 4112.05, 4112.08, and 4112.14 of the Revised Code to specify that discrimination by an employer against any person because of the person's credit history is an unlawful discriminatory practice under the Ohio Civil Rights Law.
 
Amends §§4112.02, 4112.05, 4112.08, and 4112.14 of the Revised Code to specify that discrimination by an employer against any person because of the person's credit history is an unlawful discriminatory practice under the Ohio Civil Rights Law.
Oklahoma
none
Oregon
none
Pennsylvania
Provides that it shall be an unlawful discriminatory practice for any employer because of the credit history of any individual or independent contractor, to refuse to hire or employ or contract with, or to bar or to discharge from employment such individual or independent contractor, or to otherwise discriminate against such individual or independent contractor with respect to compensation, hire, tenure, terms, conditions or privileges of employment or contract, if the individual or independent contractor is the best able and most competent to perform the services required.
 
Declares it to be an discriminatory practice for any employer or potential employer to procure a consumer report for employment purposes where any information contained in the report bears on the consumer's credit worthiness, credit standing or credit capacity, unless the information is either: (1) substantially job-related and the employer's or potential employer's reasons for the use of the information are disclosed to the consumer in writing, in which case, the burden of proof shall be on the employer or potential employer to demonstrate that the employee's or potential employee's credit worthiness, credit standing or credit capacity is substantially job-related; or (2) required by law.
Puerto Rico
none
Rhode Island
none
South Carolina
none
South Dakota
none
Tennessee
none
Texas
Relates to a limitation on the use by state agencies of credit information regarding certain job applicants.
Utah
Signed by governor 3/24/09, Chapter 174
Enacts the Employment Selection Procedures Act to address procedures used by employers to select employees. This bill: defines terms; imposes restrictions on the collection of information or testing; addresses use of information collected; imposes requirements related to the retention, disposition, access, and confidentiality of information; and provides for enforcement, including: providing for a complaint process; and authorizing rulemaking; and makes technical and conforming amendments.
Vermont
none
Virginia
none
Washington
Authorizes a consumer reporting agency to make a consumer report containing information on any prospective employee or volunteer who will or may have unsupervised access to children, individuals with developmental disabilities, or vulnerable adults.
West Virginia
none
Wisconsin
Prohibits employment discrimination based on credit history. The bill specifies that employment discrimination because of credit history includes an employer, labor organization, employment agency, licensing agency, or other person requesting an applicant, employee, member, licensee, or any other individual, on an application form or otherwise, to authorize that person to procure the individual’s credit history, except that it is not employment discrimination to request that authorization: 1) if the circumstances of an individual’s credit history are substantially related to the circumstances of a particular job or licensed activity; or 2) if employment, membership, or licensing depends on the bondability of the individual and the individual may not be bondable due to his or her credit rating. The bill also specifies that it is not employment discrimination because of credit history to refuse to employ, admit, or license, or to bar or terminate from employment, membership, or licensing, any individual if: 1) the circumstances of an individual’s credit history are substantially related to the circumstances of the particular job; or 2) if the individual is not bondable when bondability is required by state or federal law, administrative regulation, or established business practice of the employer.
 
Prohibits employment discrimination based on credit history. The bill specifies that employment discrimination because of credit history includes an employer, labor organization, employment agency, licensing agency, or other person requesting an applicant, employee, member, licensee, or any other individual, on an application form or otherwise, to authorize that person to procure the individual’s credit history, except that it is not employment discrimination to request that authorization: 1) if the circumstances of an individual’s credit history are substantially related to the circumstances of a particular job or licensed activity; or 2) if employment, membership, or licensing depends on the bondability of the individual and the individual may not be bondable due to his or her credit rating. The bill also specifies that it is not employment discrimination because of credit history to refuse to employ, admit, or license, or to bar or terminate from employment, membership, or licensing, any individual if: 1) the circumstances of an individual’s credit history are substantially related to the circumstances of the particular job; or 2) if the individual is not bondable when bondability is required by state or federal law, administrative regulation, or established business practice of the employer.
Wyoming
none