Use of Credit Information in Employment 2014 Legislation

Heather Morton 5/6/2015

Credit ReportThe chart lists state legislation introduced or pending during the 2014 legislative session relating to the use of credit information in employment.

Thirty-nine bills in 19 states were introduced or pending in the 2014 legislative session relating to the use the credit information in employment decisions. Of the 39 bills, 34 address restrictions or exemptions on the use of credit information in employment decisions.

The total number of states that limit employers' use of credit information in employment is now 11: California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont 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. Vermont enacted its legislation in 2012. Colorado and Nevada enacted legislation in 2013. Delaware prohibited a public employer from inquiring into or considering the criminal record, criminal history or credit history or score of an applicant before it makes a conditional offer to the applicant in 2014.  The remaining states allow for the use of credit information in employment decisions.

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.

The box allows you to conduct a full text search or type the state name.

Use of Credit Information in Employment 2014 Legislation
State Bill Number Bill Summary
Alabama None  
Alaska None  
Arizona

S.B. 1082

Signed by governor 4/24/14, Chapter 218
Allows the director of the Arizona State Retirement System, under the supervision of the board, to: Conduct criminal records checks of current or perspective employees; require current or prospective employees of ASRS to submit a full set of fingerprints to DPS for the purpose of obtaining a state and federal criminal records check and allows DPS to exchange the fingerprint data with the Federal Bureau of Investigation; and conduct credit checks for accounting, investment and other finance-related positions. Requires the director to establish a policy for conducting credit checks on a current employee that includes the method for determining when a credit check may be conducted, retaining records relating to the reason for the credit check and notifying an employee of the credit check and the result of the credit check.
Arkansas None  
California None  
Colorado

S.B. 102

Signed by governor 3/27/14, Chapter 92

Under current law, only certain employers may use consumer credit information for employment purposes, and only if the information is substantially related to the employee's current or potential job. Current law also governs circumstances under which an employer may require a credit report. To ensure that a bank or financial institution authorized to require a credit report may then use the credit report, the act allows bank or financial institution employers to use consumer credit information for employment purposes by amending the definition of "substantially related to the employee's current or potential job" to include positions held at banks or financial institutions.
Connecticut

S.B. 221

Signed by governor 6/6/14, Public Act 14-109

This act expands the types of employers who can require a credit check of their employees or prospective employees to include mortgage servicing companies and licensed (1) mortgage brokers, (2) mortgage correspondent lenders and (3) mortgage lenders. Under the act, a “mortgage servicing company” is any person who receives payments for a first mortgage, records the payments, and performs other administrative functions to meet the mortgage holder's obligations. Existing law generally prohibits employers from requiring their employees or prospective employees to submit to a credit check unless: 1. the employer is a financial institution, such as a bank, credit union, insurance company, or investment advisor; 2. it is required by law; 3. the employer reasonably believes the employee has violated a law related to the employee's employment; 4. it is substantially related to the employee's current or potential position; or 5. the employer has a bona fide purpose for requesting or using the information that is substantially job related and disclosed in writing.
Delaware

H.B. 167

Signed by governor 5/8/14, Chapter 227
This bill prohibits a public employer from inquiring into or considering the criminal record, criminal history or credit history or score of an applicant before it makes a conditional offer to the applicant. It permits inquiry and consideration of criminal background after the conditional offer has been made. The bill specifies that once a background check is conducted an employer shall only consider felonies for 10 years from the completion of sentence, and misdemeanors for five years from the completion of sentence. Further, employers are required to consider several enumerated factors when deciding whether to revoke a conditional offer based on the results of a background check. Police forces, the Department of Corrections and other positions with a statutory mandate for background checks are excluded from these provisions. The bill also requires contractors with state agencies to employ similar policies when not in conflict with other state or federal requirements.
District of Columbia

None

 
Florida

H.B. 635

Signed by governor 6/13/14, Chapter 124
Revises provisions relating to requirements for and court authority concerning requirements for specified guardians to submit to credit history investigation and background screening; authorizes nonprofessional guardian to petition court for reimbursement for costs of investigation and screening; authorizes clerk of court to obtain and review records impacting guardianship assets and to issue subpoenas to nonparties upon application to court; provides requirements for affidavits, notice and subpoenas; provides for objection to subpoena; authorizes court to require production of records and documents by guardian who fails to submit them during audit; provides for removal of guardian for bad faith failure to submit records during audit; provides that person seeking appointment as guardian may not lawfully deny or fail to acknowledge arrests covered by expunged or sealed record.
Florida

S.B. 324

Died in committee 5/2/14
Prohibits an employer from using a job applicant’s credit report or credit history to make certain hiring, compensation, or other employment decisions; provides specific situations in which an employer may use such information; provides exemptions for certain types of employers; provides remedies for an aggrieved person; provides for the award of actual damages and court costs; provides for a plaintiff to post a bond to indemnify the defendant for damages, including attorney fees, in certain situations.
Florida

S.B. 634

Substituted by H.B. 635 4/25/14

Revises the requirements and authorizations of the court to require specified guardians to submit to a credit history investigation and background screening; authorizes a clerk of the court to obtain and review records and documents relating to guardianship assets and to issue subpoenas to nonparties upon application to the court; provides for the removal of a guardian for a bad faith failure to submit records during an audit, etc.

Georgia

H.R. 1104

Discourages the use of credit scores for employment and insurance.

Georgia H.R. 1105

Seeks the reduction of credit-based barriers in hiring and employment.

Guam Not available  
Hawaii None  
Idaho None  
Illinois H.B. 5404 Amends the Employee Credit Privacy Act. Requires a consumer reporting agency that prepares an investigative consumer report, as defined in the Fair Credit Reporting Act, to provide upon request and without fee a copy to the consumer. Provides that the disclosure is intended to supplement the Fair Credit Reporting Act and provide greater protection to consumers.
Indiana S.B. 214 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 one or both 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 S.B. 442

Enacts the Kansas Employee Credit Consideration Act.

Kentucky None  
Louisiana None  
Maine None  
Maryland None  
Massachusetts H.B. 1731 Prohibits employers from discriminating against certain employees or potential employees based on a credit history or report.
Massachusetts H.B. 1744 Regulates the use of credit reports by employers and prospective employers.
Massachusetts S.B. 80 Regulates the use of credit reports by employers.
Michigan None  
Minnesota None  
Mississippi None  
Missouri H.B. 1153 This bill prohibits an employer or an agent, representative, or designee of an employer from requiring an employee or prospective employee to consent to a request for 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) The employer is a financial institution as defined in the bill; (2) The report is required by law; (3) The employer reasonably believes that the employee has engaged in specific activity that constitutes a violation of the law related to the employee's employment; or (4) The report is substantially related to the employee's current or potential job as defined in the bill, or the employer has a bona fide purpose for requesting or using information in the credit report that is substantially job-related and is disclosed in writing to the employee or applicant. An employee or prospective employee may file a complaint with the Department of Labor and Industrial Relations alleging a violation of the provisions of this bill. The department must conduct an investigation within 30 days after the filing of the complaint, and must render its findings. If the findings warrant, the department must hold a hearing to determine if a violation has occurred.
Montana No regular 2014 session  
Nebraska None  
Nevada No regular 2014 session  
New Hampshire

H.B. 357

To conference committee 6/11/13

This bill prohibits employers from using credit history in employment decisions.

New Hampshire

H.B. 1405

Passed House 2/19/14
This bill establishes the Employee Credit Privacy Protection Act which prohibits employers from using credit history in employment decisions.
New Hampshire

S.B. 295

Passed Senate 3/13/14
This bill prohibits employers from using credit history in employment decisions.
New Jersey A.B. 1665

Prohibits job discrimination on basis of credit history or financial status.

New Jersey

A.B. 2298

S.B. 1130

Prohibits employers from obtaining, requiring, or discriminating on the basis of credit reports.

New Jersey

A.B. 2310

S.B. 524

Prohibits practice of requiring credit check as condition of employment.

New Mexico None  
New York

A.B. 2034

Enacting clause stricken 1/15/14
Enacts the "Credit Privacy in Employment Act" to prohibit the use of credit information in hiring and employment determinations.
New York

A.B. 2148

Enacting clause stricken 1/15/14
Prohibits the use of an employee's or prospective employee's consumer credit report in making employment decisions, except in certain job related instances.
New York

A.B. 7056

S.B. 3868
Enacts the "Credit Privacy in Employment Act" to prohibit the use of credit information in hiring and employment determinations.
North Carolina None  
North Dakota No regular 2014 session  
N. Mariana Islands Not available  
Ohio

None

 
Oklahoma S.B. 1936 Prohibits use of credit report in hiring; provides exceptions; authorizes civil action for violation; sets court authority for violations.
Oregon None  
Pennsylvania None  
Pennsylvania None  
Puerto Rico None  
Rhode Island None  
South Carolina None  
South Dakota None  
Tennessee H.J.R. 644 Urges Congress to make it an unlawful discriminatory hiring practice for an employer to use credit rating, credit score, or consumer credit history to render decisions regarding a person’s employment.
Texas No regular 2014 session  
Utah None  
Vermont None  
Virginia None  
Virgin Islands Not available  
Washington None  
West Virginia None  
Wisconsin None  
Wyoming None  
 
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Heather Morton is a program principal in NCSL's Fiscal Affairs Program. She covers financial services, alcohol production and sales, and medical malpractice issues for NCSL.

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