Use of Credit Information in Employment 2013 Legislation

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Heather Morton, Denver, 303-364-7700

Credit Report Updated September 29, 2014

The chart lists state legislation introduced or pending during the 2013 legislative session relating to the use of credit information in employment.

Forty-six bills in 26 states and the District of Columbia were introduced or pending in the 2013 legislative session relating to the use the credit information in employment decisions. Out of the total 46 bills, 42 address restrictions 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 10: California, Colorado, Connecticut, 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. 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.

AZ | CO | CT | DE | DC | FL | GA | IN | IA | ME | MA | MI | MN | MO | NE | NV | NH | NJ | NM | NY | NC | OH | OR | PA | TN | TX | WV

STATES	BILL SUMMARY
Alabama	none
Alaska	none
Arizona	S.B. 1394 Relates to employee credit history check and limitations limitations.
Arkansas	none
California	none
Colorado	S.B. 18 Signed by governor 4/19/13, Chapter 125 The bill creates the "Employment Opportunity Act", which specifies the purposes for which consumer credit information (i.e., consumer credit reports and credit scores) can be used by an employer or potential employer.
Connecticut	H.B. 5685 Failed Joint Favorable deadline 3/19/13 Prohibits employers from discriminating against current or prospective employees on the basis of such employees' consumer credit status.
Delaware	H.B. 167 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	B20-65 Prohibits the use of consumer credit checks against prospective and current employees for the purpose of making adverse employment decisions.
Florida	S.B. 100 Died in committee 5/3/13 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 where an employer may use such information; provides for a plaintiff to post a bond to indemnify the defendant for damages, including attorney fees, in certain situations.
Georgia	S.B. 20 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. 110 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.
Indiana	S.B. 299 Prohibits an employer from using a credit report in the process of hiring a prospective employee or in determining whether to continue the employment of an employee. Provides that an employee or prospective employee may bring a civil action against an employer for violating the prohibition. Provides for an award of actual damages, court costs, and attorney's fees to a prevailing individual, along with an injunction against the employer's further use of credit reports in violation of the prohibition.
Iowa	H.F. 233 Prohibits employment discrimination based on a person’s credit score or home ownership status and makes penalties applicable.
Kansas	none
Kentucky	none
Louisiana	none
Maine	L.D. 1195 This bill prohibits employers and agents of employers from obtaining consumer reports that contain information regarding creditworthiness, credit standing, credit capacity, debts, check-writing experience or insurability of an employee or prospective employee, and prohibits consumer reporting agencies from furnishing this information to anyone for employment purposes. This bill also creates a civil penalty of $500 to $1,000 applicable to employers or their agents for each violation of this law. Consumer reporting agencies may still furnish, and employers and their agents may still obtain, consumer reports on an employee or prospective employee that contain information regarding character, general reputation and personal characteristics.
Maryland	none
Massachusetts	H.B. 1731 Prohibits employers from discriminating against certain employees or potential employees based on a credit history or report.
	H.B. 1744 Regulates the use of credit reports by employers and prospective employers.
	S.B. 80 Regulates the use of credit reports by employers.
Michigan	H.B. 4331 Prohibits use of credit history in the hiring process.
Minnesota	H.F. 600 S.F. 505 Prohibits employment discrimination based on credit history.
Mississippi	none
Missouri	H.B. 164 This bill specifies that it will be an improper employment practice for any employer to directly or indirectly use a job applicant’s personal credit history as hiring criteria. The term “employer” does not include specified financial institutions, insurance or surety companies, state law enforcement agencies, state or local government agencies that require use of the employee’s or applicant’s credit history, and any entity defined as a debt collector under federal or state statute. An employer may request a credit history background check as part of the application process where it is shown to be directly related to the position sought by the applicant under at least one of the following circumstances: (1) The position requires bonding or other security under state or federal law for an individual holding the position; (2) The position is managerial and involves setting the direction or control of the business; (3) The position meets criteria in specified federal or state administrative rules to establish the circumstances when a credit history is a bona fide occupational requirement; (4) The duties of the position involve access to customers’, employees’, or the employer’s personal or financial information other than information customarily provided in a retail transaction; (5) The duties of the position involve a fiduciary responsibility to the employer; or (6) The position includes an expense account.
Montana	none
Nebraska	L.B. 95 Adopts the Employee Credit Privacy Act.
Nevada	A.B. 181 Signed by governor 6/13/13, Chapter 548 Makes various changes to provisions governing employment practices. Prohibits a person from requesting or considering a consumer report for purposes relating to employment except under certain circumstances.
Nevada	S.B. 127 Signed by governor 5/23/13, Chapter 76 Prohibits employers from conditioning employment on a consumer credit report or other credit information.
New Hampshire	H.B. 357 To conference committee 6/11/13 This bill prohibits employers from using credit history in employment decisions.
New Jersey	A.B. 704 For further actions see A.B. 2840 12/16/13 S.B. 1102 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, including: (1) A managerial position which involves setting the financial direction or control of the business; (2) A position which involves access to customers’, employees’, or employers’ personal belongings or financial information, other than information customarily provided in a retail transaction; (3) A position which involves a fiduciary responsibility to the employer, including, but not limited to, the authority to issue payments, transfer money or enter into contracts or involves leases of real property; (4) A position which provides an expense account for travel; or (5) A law enforcement officer for a law enforcement agency in this state, as defined by the bill. 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 an 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, and $10,000 for each subsequent violation, collectible by the commissioner of Labor and Workforce Development.
New Jersey	A.B. 2840 S.B. 455 Passed Senate 5/31/12 This bill prohibits an employer from requiring a credit check on a current or prospective employee, 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. It prohibits any employment discrimination against a current or prospective employee based on information in a credit report. The bill does not prevent an employer from performing a credit inquiry or taking an employment action if credit history is a bona fide occupational qualification of a particular position or employment classification, including: 1. A managerial position which involves setting the financial direction or control of the business; 2. A position which involves access to customers’, employees’, or employers’ personal belongings or financial assets or financial information, other than information customarily provided in a retail transaction; 3. A position which involves a fiduciary responsibility to the employer, including, but not limited to, the authority to issue payments, transfer money or enter into contracts or involves leases of real property; 4. A position which provides an expense account for travel; or 5. A law enforcement officer for a law enforcement agency, or a governmental or non-governmental security personnel position, including security personnel in a homeland security agency. 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 an 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 $2,000 for the first violation, and $5,000 for each subsequent violation, collectible by the Commissioner of Labor and Workforce Development.
New Mexico	S.B. 128 Vetoed by governor 4/5/13 Prohibits prospective employers from using a prospective employee's credit information as a basis for refusing to recruit or interview the prospective employee, with some exceptions.
New York	A.B. 1799 Relates to limiting an employer's access to consumer credit reports in connection with employment applications.
	A.B. 2034 Enacts the "Credit Privacy in Employment Act" to prohibit the use of credit information in hiring and employment determinations.
	A.B. 2148 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. 2367 S.B. 5181 Prohibits the use of job applicant's personal credit history as hiring criteria, unless a reasonable nexus exists.
	A.B. 7056 Passed Assembly 6/19/13 S.B. 3868 Enacts the "Credit Privacy in Employment Act" to prohibit the use of credit information in hiring and employment determinations.
North Carolina	H.B. 815 Amends the labor laws to make unlawful employment discrimination based upon an employee's or prospective employee's credit history.
North Carolina	S.B. 621 Prohibits employment discrimination on the basis of credit history or credit rating.
North Dakota	none
N. Mariana Islands	not available
Ohio	S.B. 70 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. 3114 Modifies authority of Oregon Health and Science University to establish police force, creates exemption to allow credit history information to be used to review applicants for positions with this police force.
Oregon	S.B. 565 Signed by governor 5/16/13, Chapter 180 Modifies authority of Oregon Health and Science University to establish police force, creates exemption to allow credit history information to be used to review applicants for positions with this police force.
Pennsylvania	H.B. 652 Provides that it shall be an unlawful discriminatory practice for an employer to require, as a condition of employment, 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 unless one of the specified exceptions apply.
Pennsylvania	S.B. 839 Prohibits employers from using consumer reporting under certain circumstances; and provides for enforcement.
Puerto Rico	none
Rhode Island	none
South Carolina	none
South Dakota	none
Tennessee	H.B. 1321 S.B. 699 Prohibits employers from using the credit report or credit history of an employee or applicant for employment to deny employment, discharge an employee or determine compensation of the terms, conditions or privileges of employment, but allows the credit report or history to be used if information in the credit report is substantially job-related and disclosed in writing to the employee or applicant.
Texas	H.B. 851 Relates to a limitation on the use by state agencies of credit information regarding certain job applicants.
Texas	S.B. 990 Passed Senate 4/11/13 Amends Chapter 411 of the Government Code, regarding the Texas Department of Public Safety, relating to criminal history record information obtained or disseminated by a private entity for employment or housing purposes.
Utah	none
Vermont	none
Virginia	none
Virgin Islands	not available
Washington	none
West Virginia	H.B. 2532 Prohibits the use of a person's credit history in employment hires except in limited circumstances where there is a legitimate job related purpose in requesting the credit history. Prohibits the use of a person's credit history in certain insurance transactions.
Wisconsin	none
Wyoming	none