Use of Credit Information in Employment 2011 Legislation

Last Updated: December 19, 2011

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

The chart lists state legislation introduced or pending during the 2011 legislative session relating to the use of credit information in employment.

To date, 61 bills in 29 states and the District of Columbia were introduced or pending in the 2011 legislative session. The total number of states that limit employers' use of credit information in employment is now seven: California, Connecticut, Hawaii, Illinois, Maryland, Oregon and Washington. Washington enacted legislation in 2007, Hawaii enacted legislation in 2009, Illinois and Oregon enacted legislation in 2010. California, Connecticut and Maryland enacted legislation in 2011.

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 Webpages:

AL | AZ | AR | CA | CO | CT | DCFL | GAIN | KY | MD | MA | MI | MN | MO | MT | NE | NV | NJ | NM | NY | OH | ORPA | SC | TX | VT | WA | WI
STATE
BILL SUMMARY
Alabama

H.B. 657
This bill provides for when an employer may use the credit report or credit history of an employee or applicant for employment. This bill authorizes certain individuals to file a complaint with the commissioner of Labor; require that a complaint filed by an employee shall be investigated promptly by the commissioner; authorizes the commissioner to assess civil penalties and send an order to pay the penalty to the parties; provides for an employer to request a hearing and for the commission to schedule a hearing; establishes when an order to pay a civil penalty becomes final; authorizes the commissioner or a complainant to bring certain court actions; and exempt certain employers.

Alaska
none
Arizona

S.B. 1270
Signed by governor 4/19/11, Chapter 190
Provides that the Department of Transportation may obtain consumer report information regarding applicants for employment for the purpose of hiring personnel. Information obtained may only be used to determine the suitability of the applicant for positions involving fiduciary or financial responsibilities, the issuance of driver licenses or other personal identification documents or access to highly confidential information. Consumer report information may be obtained and used only in accordance with the Fair Credit Reporting Act (15 United States Code §§1681 through 1681x). An applicant shall not be disqualified from employment under this subsection unless the consumer report information relied on for the disqualification has a reasonable relationship to the functions of the position.

S.B. 1431
Provides that the Department of Transportation may obtain consumer report information regarding applicants for employment for the purpose of hiring personnel. Information obtained may only be used to determine the suitability of the applicant for positions involving fiduciary or financial responsibilities, the issuance of driver licenses or other personal identification documents or access to highly confidential information. Consumer report information may be obtained and used only in accordance with the Fair Credit Reporting Act (15 United States Code §§1681 through 1681x). An applicant shall not be disqualified from employment under this subsection unless the consumer report information relied on for the disqualification has a reasonable relationship to the functions of the position.

Arkansas

A.B. 1987
Prohibits the use of consumer credit information for employment purposes; and for other purposes.

California

A.B. 22
Signed by governor 10/9/11, Chapter 724
This bill prohibits an employer or prospective employer, with the exception of certain financial institutions, from obtaining a consumer credit report, as defined, for employment purposes unless the position of the person for whom the report is sought is (1) a position in the state Department of Justice, (2) a managerial position, as defined, (3) that of a sworn peace officer or other law enforcement position, (4) a position for which the information contained in the report is required by law to be disclosed or obtained, (5) a position that involves regular access to specified personal information for any purpose other than the routine solicitation and processing of credit card applications in a retail establishment, (6) a position in which the person is or would be a named signatory on the employer's bank or credit card account, or authorized to transfer money or enter into financial contracts on the employer's behalf, (7) a position that involves access to confidential or proprietary information, as specified, or (8) a position that involves regular access to $10,000 or more of cash, as specified. This bill also requires the written notice informing the person for whom a consumer credit report is sought for employment purposes to also inform the person of the specific reason for obtaining the report, as specified.

Colorado

H.B. 1127
Postponed indefinitely 2/17/11
The bill specifies the purposes for which consumer credit information (i.e., consumer credit reports and credit scores) can be used in certain situations. Restricts an employer's use of consumer credit information for employment purposes and requires an employer to disclose to an employee or applicant for employment when the employer uses the employee's or applicant's consumer credit information to take adverse action against the employee or applicant and the particular credit information upon which the employer relied.

Connecticut

H.B. 5284
Failed Joint Favorable deadline 4/15/11
Amends §46a-60 of the general statutes to add discrimination on the basis of an employee's or prospective employee's credit history to the list of prohibited discriminatory employment practices.

H.B. 5913
Failed Joint Favorable deadline 3/15/11
Prevents an employer from discriminating against an employee in hiring decisions as a result of the employee's criminal or credit history provided such employee had worked for the employer as a temporary employee for a period of one or more years.

H.B. 6220
Failed Joint Favorable deadline 4/15/11
Eliminates the use of credit reports in hiring decisions.

H.B. 6641
Limits the use of credit reports by employers and prospective employers, except with respect to certain financial occupations, in order to provide additional employment opportunities for individuals.

S.B. 361
Signed by governor 7/13/11, Public Act 11-223
This bill prohibits employers and their agents, representatives, or designees from requiring an employee or prospective employee to consent to a request for a credit report as a condition of employment. The prohibition does not apply when the (1) employer is a financial institution, (2) report is required by law, (3) employer reasonably believes the employee committed a violation of the law related to the employee's job, or (4) report is substantially related to the employee's current or potential job or the employer has a bona fide purpose to request or use information in the report that is substantially job-related and is disclosed to the employee or applicant in writing. The bill allows an employee or prospective employee to file a complaint about a violation of the bill's provisions with the labor commissioner. The commissioner must conduct an investigation and make findings within 30 days. If the findings warrant, the commissioner must hold a hearing. Violators face a $ 300 civil penalty for each violation. At the request of the labor commissioner, the attorney general must initiate a civil lawsuit to recover the penalties. Any amount recovered must be deposited in the General Fund.

Delaware
none
District of Columbia

B19-38
Prohibits the use of consumer credit checks against prospective and current employees for the purposes of making adverse employment decisions.

Florida

S.B. 1562
Died in committee 5/7/11
Prohibits the use of a job applicant's personal credit history as a hiring criterion. Provides an exception.

Georgia

S.B. 42
Prohibits employers from requesting credit reports on employees or prospective employees with certain exceptions.

Guam
not available
Hawaii
none
Idaho
none
Illinois
none
Indiana

S.B. 207
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. Provides that if the attorney general has reason to believe that an employer has violated the provision, the attorney general may bring either of the following: (1) An action to enjoin the violation. (2) An action to recover damages sustained by Indiana residents as a result of the violation. Makes it: (1) a Class B infraction for a knowing or intentional violation of the provision; or (2) a Class A infraction if an employer has a prior unrelated judgment for a violation of the provision.

 

S.B. 220
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. Provides that if the attorney general has reason to believe that an employer has violated the provision, the attorney general may bring either of the following: (1) An action to enjoin the violation. (2) An action to recover damages sustained by Indiana residents as a result of the violation. Makes it: (1) a Class B infraction for a knowing or intentional violation of the provision; or (2) a Class A infraction if an employer has a prior unrelated judgment for a violation of the provision.

Iowa
none
Kansas
none
Kentucky

H.B. 144
Amends KRS 344.040 to prohibit an employer from using an employee's credit history in an employment action.

Louisiana
none
Maine
none
Maryland

H.B. 87
Signed by governor 4/12/11, Chapter 29
S.B. 132
Signed by governor 4/12/11, Chapter 28
Prohibits specified employers 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 or employee's credit report or credit history under specified circumstances; authorizes an applicant or employee to bring a civil action for a violation of the Act.

H.B. 934
Prohibits an employer from using the credit history or credit report of an employee or applicant for employment for specified purposes; authorizes an employer to request or consider an applicant's or employee's credit history or credit report under specified circumstances; requires an employer to disclose specified information in writing to an applicant or employee under specified circumstances.

Massachusetts

H.B. 3518
Provides that for an employer to refuse to hire or employ or to bar or discharge from employment, or otherwise to discriminate against any individual in compensation or in the terms, conditions or privileges of employment of any individual because of the individual’s credit history or credit report, unless the information in the individual’s credit history or credit report directly relates to a bona fide occupational qualification. A bona fide occupational requirement requires at least one of the following: (i) state or federal law requires bonding or other security covering an individual holding the position; (ii) the duties of the position include custody of or unsupervised access to cash or marketable assets valued at $2,500 or more; (iii) the duties of the position include signatory power over business assets of $100 or more per transaction; (iv) the position is a managerial position which involves setting the direction or control of the business; (v) the position involves access to personal or confidential information, financial information, trade secrets, or commonwealth or national security information; (vi) the position meets criteria in administrative rules, if any, that the federal Department of Labor has promulgated to establish the circumstances in which a credit history is a bona fide occupational requirement; (vii) the position meets criteria in regulations promulgated by the executive office of labor and workforce development to establish the circumstances in which a credit history is a bona fide occupational requirement; (viii) the employee's or applicant's credit history is otherwise required by or exempt under federal law or any general or special law.

Michigan

H.B. 4363
Prohibits the use of credit history in the hiring process.

Minnesota

H.F. 1448
S.F. 1122
Modifies reliance on credit or criminal history for employment requirements.

Mississippi
none
Missouri

H.B. 37
This bill prohibits an employer from using a job applicant's personal credit history as a hiring criteria except where the credit history is shown to be directly related to the position sought by the applicant. If the applicant's credit history is directly related to the position, the history cannot be the determinant factor in whether he or she is ultimately hired.

H.B. 461
Prohibits an employer from using a job applicant's personal credit history as a hiring criteria except where the credit history is shown to be directly related to the position sought by the applicant.

H.B. 807
This bill specifies that it will be an improper employment practice for an employer to refuse to hire or to discharge any individual or to 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

H.B. 601
Missed deadline for revenue bill transmittal 3/30/11
Limits the use of a consumer report for employment purposes; provides a fine for misuse.

Nebraska

L.B. 113
Prohibits discrimination based upon an individual's credit history or credit report as prescribed.

L.B. 530
Adopts the Employee Credit Privacy Act.

Nevada

A.B. 331
Passed Assembly 6/4/11
Under existing law, a person who complies with the requirements of the Fair Credit Reporting Act, 15 U.S.C. §§1681 et seq., and chapter 598C of NRS is allowed to obtain a consumer report for purposes relating to the employment of the consumer. This bill prohibits a person from procuring a consumer report for purposes of evaluating a consumer for employment, promotion, reassignment or retention as an employee unless: (1) the use of the report is required or authorized by state or federal law; (2) the person reasonably believes that the consumer has engaged in specific illegal activity which is likely to be reflected in the consumer report; or (3) the information in the report is substantially related to the evaluation of the consumer’s likely performance of the duties of the particular position for which he or she is being evaluated. This bill also provides that a person who is prohibited from procuring a consumer report for purposes related to employment is also prohibited from requesting a consumer to furnish his or her consumer report to the person or to authorize a reporting agency to furnish the report for those purposes. Existing law provides that if a consumer places a security freeze on his or her file maintained by a credit reporting agency, the agency is not allowed to release the consumer report without the consumer’s consent except for certain purposes, which include certain purposes relating to employment of the consumer. (NRS 598C.350, 598C.380) This bill revises the scope of that exception to conform with this bill.

New Hampshire
none
New Jersey

A.B. 1519
A.B. 4418
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

S.B. 72
Relates to consumer credit information; prohibits employers from using an employee's or prospective employee's credit information as a basis for employment, recruitment, discharge or compensation with some exceptions; provides notice to employees or prospective employees when credit information is used by employers or prospective employers as a basis for employment, recruitment, discharge or compensation.

New York

A.B. 4052
Prohibits the use of job applicant's personal credit history as hiring criteria, unless a reasonable nexus exists.

A.B. 6672
S.B. 1519

Prohibits the use of an employee's or prospective employee's consumer credit report in making employment decisions, except in certain job related instances.

A.B. 8070
S.B. 4905
Enacts the "credit privacy in employment act" to prohibit the use of credit information in hiring and employment determinations.

A.B. 8159
Signed by governor 7/20/11, Chapter 184
S.B. 3987
Substituted 6/22/11
Authorizes performance of credit, security clearance and criminal background checks of employees and prospective employees of the New York state higher education services corporation.

North Carolina
none
North Dakota
none
Ohio

H.B. 131
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.

S.B. 30
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

H.B. 2036
Signed by governor 6/1/11, Chapter 210
Allows employer to make specified employment decisions based on credit history of certain applicants for public safety officer employment.

H.B. 3240
Adds community college police departments to definition of public safety officer in exceptions for using employment decisions based on credit history.

S.B. 116
Adds university police departments to definition of public safety officer in exceptions for using employment decisions based on credit history.

S.B. 405
Signed by governor 6/23/11, Chapter 506
Adds university police departments to definition of public safety officer in exceptions for using employment decisions based on credit history.

Pennsylvania

S.B. 128
Prohibits employers from using consumer reports under certain circumstances; and provides for enforcement.

Puerto Rico
none
Rhode Island
none
South Carolina

H.B. 3101
Adds §38-55-35 so as to provide an insurer may not use the credit report of a person seeking a contract of insurance to determine the insurance rate of the contract or whether to issue the insurance contract, and to define certain terms; adds §41-1-120 so as to provide an employer may not use a credit report to evaluate a person for employment, and to define certain terms; adds §56-31-35 so as to provide a vehicle rental company may not use the credit report of a person seeking to rent certain vehicles to determine the rental rate of the vehicles or whether to rent the vehicles, and to define certain terms; and amends §37-20-110, relating to the definition of a "credit report", so as to remove establishing a person's eligibility for employment from the purposes for which this report is intended.

 

S.B. 85
Adds §38-55-35 so as to provide an insurer may not use the credit report of a person seeking a contract of insurance to determine the insurance rate of the contract or whether to issue the insurance contract, and to define certain terms; adds §41-1-120 so as to provide an employer may not use a credit report to evaluate a person for employment, and to define certain terms; adds §56-31-35 so as to provide a vehicle rental company may not use the credit report of a person seeking to rent certain vehicles to determine the rental rate of the vehicles or whether to rent the vehicles, and to define certain terms; and amends §37-20-110, relating to the definition of a "credit report", so as to remove establishing a person's eligibility for employment from the purposes for which this report is intended.

South Dakota
none
Tennessee
none
Texas

H.B. 449
Relates to a limitation on the use by state agencies of credit information regarding certain job applicants.

Utah
none
Vermont

H.B. 42
Passed House 4/15/11
Generally prohibits employers from making employment decisions based on an applicant’s credit report.

Virginia
none
Washington

H.B. 1733
Requires that a consumer reporting agency must provide notice in writing to an applicant or employee prior to procuring the consumer report for employment purposes if information in the consumer report that concerns the applicant or employee will be transferred from the consumer reporting agency to a third party outside of the United States or its territories.

S.B. 5703
Add an exception allowing consumer reporting agencies to report any adverse information relating to a prospective employee or volunteer who may have unsupervised access to children, individuals with developmental disabilities, or vulnerable adults.

West Virginia
none
Wisconsin

A.B. 350
This bill 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. Under the bill, credit history means information provided in a consumer report under the federal Fair Credit Reporting Act (FCRA), which defines consumer report as any written, oral, or other communication by a consumer reporting agency bearing on an individual’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living, which is used or expected to be used as a factor in establishing the individual’s eligibility for credit, insurance, employment, or any other purpose allowed under federal law. The FCRA further defines consumer reporting agency as any person who, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on individuals for the purpose of furnishing consumer reports to third parties, and who uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.

S.B. 246
This bill 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. Under the bill, credit history means information provided in a consumer report under the federal Fair Credit Reporting Act (FCRA), which defines consumer report as any written, oral, or other communication by a consumer reporting agency bearing on an individual’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living, which is used or expected to be used as a factor in establishing the individual’s eligibility for credit, insurance, employment, or any other purpose allowed under federal law. The FCRA further defines consumer reporting agency as any person who, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on individuals for the purpose of furnishing consumer reports to third parties, and who uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.

Wyoming
none

Powered by State Net