Use of Credit Information in Employment 2010 Legislation

Last Updated: January 13, 2011

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

The chart lists the state legislation introduced during the 2010 legislative session relating to the use of credit information in employment.

There were 33 bills in 18 states and the District of Columbia introduced in the 2010 legislative session. To date, four states have limited employers' use of credit information in employment: Hawaii, Illinois, Oregon and Washington. Washington enacted legislation in 2007, Hawaii enacted legislation in 2009, Illinois and Oregon enacted legislation in 2010.

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.

NCSL Related Web Pages:

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STATES
BILL SUMMARY
Alabama
none
Alaska
none
Arizona
none
Arkansas
none
California

A.B. 482
Vetoed by governor 9/23/10
This bill 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 trade secrets or other confidential information, and (2) the position of the person for whom the report is sought is a position in the state Department of Justice, a managerial position, 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.

 

S.B. 909
Signed by governor 9/29/10, Chapter 481
This bill requires a person who procures or causes to be prepared an investigative consumer report for employment purposes to provide a consumer with the Internet Web site address or telephone number of the investigative consumer reporting agency where the consumer may find additional information about the agency's privacy practices. This bill additionally requires an investigative consumer reporting agency to conspicuously post on its primary Internet Web site information describing its privacy practices with respect to its preparation and processing of investigative consumer reports, or, if it does not have an Internet Web site, to mail a written copy of the privacy statement to consumers upon request. The bill provides that an investigative consumer reporting agency is liable to a consumer who is harmed by any unauthorized access of the consumer's personally identifiable information, act, or omission that occurs outside the United States or its territories, as specified.

Colorado
none
Connecticut

H.B. 5061
Failed Joint Favorable deadline 3/29/10
Provides that no employer or an employer's agent, representative or designee may require an employee or prospective employee to consent to the creation of a credit report that contains information about the employee's or prospective employee's credit score, credit account balances, payment history, savings or checking account balances or savings or checking account numbers as a condition of employment unless (1) such report is substantially related to the employee's current or potential job, (2) such report is required by law, or (3) the employer reasonably believes that the employee has engaged in specific activity that constitutes a violation of the law.

Delaware
none
District of Columbia

B18-720
Prohibits the use of consumer credit checks against prospective and current employees for the purposes of making adverse employment decisions.

Florida
none
Georgia

H.B. 1277
Provides that it shall be unlawful for an employer to fail or refuse to hire, bar, discharge from employment, or otherwise discriminate against an individual because of the individual's credit history or credit report; provides for exceptions; provides a penalty.

 

S.B. 433
Prohibits employers from requesting credit reports on employees or prospective employees with certain exceptions.

Guam
none
Hawaii
none
Idaho
none
Illinois

H.B. 4658
Signed by governor 8/10/10, Public Act 96-1426
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.

 

H.B. 4855
Tabled by sponsor 2/23/10
Amends the Illinois Human Rights Act. Provides that it is the public policy of this state to prevent discrimination in employment based on credit history and that it is a civil rights violation for any employer, employment agency, or labor organization to inquire into or to use a prospective employee's or employee's credit history as a basis to refuse to hire or to act with respect to recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or terms, privileges, or conditions of employment. Sets forth certain exceptions.

Indiana

S.B. 158
Prohibits an employer from using a consumer report for employment purposes unless certain conditions apply. Allows a consumer to bring a civil action against an employer for a violation of this provision. Makes it a Class B infraction for a knowing or intentional violation of this provision.

Iowa
none
Kansas
none
Kentucky
none
Louisiana

H.B. 817
Provides that an employer, labor organization, or employment agency shall not fail or refuse to hire, bar, discharge from employment, or otherwise discriminate against an applicant or employee because of information contained in the applicant or employee's credit history or credit report unless the information directly relates to a bona fide occupation qualification reasonably necessary to the normal operation of that business or enterprise.

 

S.B. 529
Provides that an employer, labor organization, or employment agency shall not fail or refuse to hire, bar, discharge from employment, or otherwise discriminate against an applicant or employee because of information contained in the applicant or employee's credit history or credit report unless the information directly relates to a bona fide occupation qualification reasonably necessary to the normal operation of that business or enterprise.

 

S.R. 120
Adopted 6/9/10
Urges and requests that the Louisiana Workforce Commission regulate the use of consumer credit reports as criteria for employment.

Maine
none
Maryland

H.B. 175
Prohibits an employer from using an applicant's or employee's credit report or credit history in determining whether to deny employment to the applicant, discharge the employee, or determine compensation or the terms, conditions, or privileges of employment; authorizes an employer to request or consider an applicant's credit report or credit history under specified circumstances; authorizes an applicant or employee to bring an action for injunctive relief, damages, or other relief for a violation of a specified provision of law.

 

S.B. 110
Prohibits an employer from requesting a credit report from an applicant for employment or an employee unless the request has a bona fide work-related purpose or the employer is required to request the credit report under federal or state law; requires the commissioner of Labor and Industry to adopt regulations specifying what is a bona fide work-related purpose; and authorizes specified civil actions under specified circumstances.

 

S.B. 312
Prohibits an employer from using an applicant's or employee's credit report or credit history in determining whether to deny employment to the applicant, discharge the employee, or determine compensation or the terms, conditions, or privileges of employment; authorizes an employer to request or consider an applicant's credit report or credit history under specified circumstances; authorizes an applicant or employee to bring an action for injunctive relief, damages, or other relief for a violation of a specified provision of law.

Massachusetts
none
Michigan
none
Minnesota

H.F. 3592
S.F. 3112
Prohibits employment discrimination based on credit history.

Mississippi
none
Missouri

H.B. 1475
This bill makes it an improper employment practice for an employer to refuse to hire, discharge any individual, or otherwise disadvantage an individual with respect to compensation, terms, or conditions of employment based on the individual's credit score or credit history, unless the credit information is directly, materially, and substantially related to the duties and performance of the employee or the overall operation of the employer's business.

Montana
No Regular 2010 Session
Nebraska
none
Nevada
No Regular 2010 Session
New Hampshire
none
New Jersey

A.B. 1519
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.

 

A.B. 2561
This bill prohibits an employer from requiring a credit check on an employee or prospective employee as a condition of employment, unless the employer is required to do so by law, or reasonably believes that an employee has engaged in a specific activity that constitutes a violation of law. The bill does not prevent an employer from a credit inquiry or employment action if a good credit history is a bona fide occupational requirement of a particular position or employment classification. The bill prohibits an employer from requiring a prospective employee to waive or limit any protection granted under the bill as a condition of applying for or receiving an offer of employment. The bill also prohibits retaliation or discrimination against an individual because the individual has done or was about to do any of the following: (1) file a complaint pursuant to provisions of the bill; (2) testify, assist, or participate in an investigation, proceeding, or action concerning a violation of the bill; or (3) otherwise oppose a violation of the bill. Any prospective employee, employee, or former employee aggrieved under the provisions of the bill may bring action in a court of competent jurisdiction for appropriate injunctive relief and damages, including reasonable attorneys’ fees and court costs. In addition, the bill provides for the imposition of civil penalties in an amount not to exceed $5,000 for the first violation, or $10,000 for each subsequent violation, collectible by the commissioner of Labor and Workforce Development.

 

A.B. 3199
This bill prohibits an employer from requiring a credit check on a current or prospective employee as a condition of employment, unless the employer is required to do so by federal or state law. The bill also prohibits an employer from requiring a prospective employee to waive or limit any protection granted under the bill as a condition of applying for or receiving an offer of employment. The bill prohibits retaliation or discrimination against an individual because the individual has done or was about to do any of the following: (1) file a complaint pursuant to provisions of the bill; (2) testify, assist, or participate in an investigation, proceeding, or action concerning a violation of the bill; or (3) otherwise oppose a violation of the bill. Any current, prospective, or former employee aggrieved under the provisions of the bill may bring action in a court of competent jurisdiction for appropriate injunctive relief and damages, including reasonable attorneys’ fees and court costs. In addition, the bill provides for the imposition of civil penalties in an amount not to exceed $5,000 for the first violation, or $10,000 for each subsequent violation, collectible by the commissioner of Labor and Workforce Development.

 

A.B. 3238
S.B. 1922
Combined with S.B. 1791 11/8/10
This bill prohibits an employer from requiring a credit check on a current or prospective employee as a condition of employment, unless the employer is required to do so by law, or reasonably believes that an employee has engaged in a specific activity that is financial in nature and constitutes a violation of law. The bill does not prevent an employer from a credit inquiry or employment action if credit history is a bona fide occupational requirement of a particular position or employment classification. The bill prohibits an employer from requiring a prospective employee to waive or limit any protection granted under the bill as a condition of applying for or receiving an offer of employment. The bill also prohibits retaliation or discrimination against an individual because the individual has done or was about to do any of the following: (1) file a complaint pursuant to provisions of the bill; (2) testify, assist, or participate in an investigation, proceeding, or action concerning a violation of the bill; or (3) otherwise oppose a violation of the bill. Any current, prospective, or former employee aggrieved under the provisions of the bill may bring action in a court of competent jurisdiction for appropriate injunctive relief and damages, including reasonable attorneys’ fees and court costs. In addition, the bill provides for the imposition of civil penalties in an amount not to exceed $5,000 for the first violation, or $10,000 for each subsequent violation, collectible by the Commissioner of Labor and Workforce Development.

 

S.B. 1791
Passed Senate 12/20/10
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, unless a good credit history or a good financial status is an established bona fide occupational requirement of a particular position or employment classification.

New Mexico
none
New York

A.B. 10433
Limits an employer's access to consumer credit reports in connection with employment applications.

North Carolina
none
North Dakota
none
Ohio

H.B. 586
Amends §4113.99 and enacts §4113.73 of the Revised Code to prohibit employers from using a consumer report or investigative consumer report for employment purposes.

Oklahoma

S.B. 1643
Relates to consumer credit reports; provides legislative findings and intent; defines terms; prohibits discriminatory practice by using certain information from a consumer report for certain purposes; exempts use of certain information under certain condition; requires employer compliance with Fair Credit Reporting Act; states adverse action notification procedure.

Oregon

S.B. 1045, Special Session
Signed by governor 3/29/10, Chapter 102
Limits use of credit history for employment purposes to certain circumstances. Creates unlawful employment practice for violation.

Pennsylvania

H.B. 2366
Provides that it shall be an unlawful discriminatory practice for any employer or any employer's agent, representative or designee to require an employee or prospective employee to consent to the creation of a credit report that contains information about the employee's or prospective employee's credit score, credit account balances, payment history, savings or checking account balances or savings or checking account numbers as a condition of employment unless one of the following applies: (1) Such report is substantially related to the employee's current or potential job. (2) Such report is required by law. (3) The employer reasonably believes that the employee has engaged in a specific activity that constitutes a violation of the law.

Puerto Rico
none
Rhode Island
none
South Carolina

S.B. 996
Amends §1-13-80, relating to unlawful employment practices, to provide that it is an unlawful employment practice for an employer to using an individual's credit report or credit history as the basis to fail or refuse to hire, bar, discharge from employment or otherwise discriminate against an individual with respect to the individual's compensation or terms, conditions, or privileges of employment, and provides that it is not an unlawful employment practice for an employer to consider an individual's credit history under certain circumstances.

South Dakota
none
Tennessee
none
Texas
No Regular 2010 Session
Utah
none
Vermont

H.B. 522
Generally prohibits employers from making employment decisions based on an applicant’s credit report.

Virginia
none
Washington
none
West Virginia
none
Wisconsin

A.B. 367
Failed to pass pursuant to Senate Joint Resolution 1 4/28/10
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.

 

S.B. 275
Failed to pass pursuant to Senate Joint Resolution 1 4/28/10
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

 

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