State |
Effective Date |
Rulings |
Additional Info |
California |
Jan.1, 2012 |
Employers shall not use consumer credit reports for employment purposes unless the person is or will be employed in certain positions. Unlike other state statutes, CA law requires the consumer be informed on the authorization and consent form that a consumer credit report is being sought and for which listed positions which allow such a report be stated. The employee must be informed whether or not the information found in the report will affect the employer's hiring decision and if he or she would like a copy of the report. |
“These positions excepted: • A managerial position, which has all the following characteristics: duties involve managing the business or department thereof; directing the work of at least two people; having authority to hire/fire or has real input on these decisions; uses discretion and independent judgment in performing the job; primarily performs exempt work under the Fair Labor Standards Act; earns twice the California minimum wage for full time employees which would equate, at this time, to $2,733.33 per month or $33,278.00 per year to be a management employee. • Employees of CA Dept of Justice. • Police/law enforcement officers: • When credit report information is required by law. • Has access to banks/credit card information, SSN and DOB of persons (routine processing of credit card purchases not included). • Has signatory authority on bank/credit cards of the employer. • Has authority to transfer funds on behalf of the employer. • Has authority to enter into financial contracts on behalf of the employer. • Has access to confidential proprietary information of the employer. • Has regular access to cash of $10,000 or more of the employer, customer or client. • Positions with any financial institution subject to 15 U.S.C. §§6801-6809 [Disclosure of Non-Public Personal Information] either directly or indirectly through other federal or state statutes or regulations.” |
Colorado |
July 1, 2013 |
In order for an employer to use consumer credit information for employment purposes, the information must be “substantially related” to the employee’s current or potential job, the information is required by law or the employer is a bank/financial institution. |
In addition, The position must constitute: 1. Executive personnel; 2. Management personnel; 3. Officers; or 4. Employees who constitute professional staff to executive and management personnel. AND The position must also involve one or more of the following 4 responsibilities: 1. Setting the direction or control of a business, division, unit, or an agency of a business; 2. A fiduciary responsibility to the employer; 3. Access to customers', employees', or the employer's personal or financial information other than information customarily provided in a retail transaction; or 4. The authority to issue payments, collect debts, or enter into contracts. |
Connecticut |
Oct 1, 2011 |
Employers may only request a credit report if such is substantially related to a current job or potential job. This is known as Public Act 11-223. The law cited is Conn. Gen. Stat. §Sec. 31-51tt - (Employer inquiries about an employee’s or prospective employee’s credit.) |
The exceptions are 1) Entity registered with the Security and Exchange Commission: and 2) Mortgage broker, licensed mortgage lender or mortgage servicing company. |
District of Columbia |
Mar.17, 2017 |
DC employers are restricted from considering credit reports in regard to employment decisions. There are six exceptions relative to hiring. |
The six exceptions are: (1) Where DC law requires a credit check. Can this supersede a general federal requirement? Probably not. (2) DC or campus police. (3) Employees of the office of the DC Chief Financial Officer. (4) Where DC law requires a security clearance. Again can this supersede federal law – probably not. (5) Disclosures to the Board of Ethics and Accountability – not a likely CRA customer. (6) Financial institutions. |
Delaware |
May 8, 2014 |
AFFECTS GOVERNMENT CONTRACTORS AND PUBLIC GOVERNMENT EMPLOYERS ONLY - An employer may not consider a credit report or credit score until the applicant has the first interview (if the employer uses first interviews) AND a conditional job offer is first made to the applicant. This law is per House Bill 167. |
This restriction does not apply to state, county or municipal police, or the Department of Corrections. |
Hawaii |
not applicable |
An employer may only order a credit report after an offer of employment has been made, but only certain circumstances. |
An employer may only order a credit report after an offer of employment has been made but only regarding the following: (1) Employers authorized to obtain a credit report under some other state or federal law; (2) Managerial or supervisory employees who use independent, judgment to perform their job; (3) Employers of federally insured financial institutions; HRS §378-2.7. |
Illinois |
Jan 1,2011 |
An employer may not inquire about or obtain a credit report unless the employer is excluded or there is an exemption for a specific position. The use of credit header information is specifically authorized. There are excluded employers and excluded positions - see the next two sections. |
Positions Exempted from exclusion: 1) State or federal law requires bond or surety for position; 2) Employee has custody or unsupervised access to cash or marketable assets exceeding $2,500, assets include cargo/inventory, but not fixtures, furnishings or equipment of the employer. 3) Employee has signatory power of business assets of $100 or more; 4) A managerial position that can direct or control a business; 5) Employee will have access to personal, confidential and financial information, trade secrets, or state or national security information. These terms are defined by Act but are common definitions. 6) The EEOC or Illinois Department of Labor determines position is appropriate for a credit report; 7) State or federal law requires a position to have a credit report. |
Maryland |
Oct, 2011 |
An employer may not use a credit report to deny employment, discharge an employee, or use of compensation determination. However, per the statute, an employer may request the credit report on an applicant after an offer for employment has been made. The Bill specifically authorizes other types of consumer reports for background screening permitted under the FCRA. ALSO - A credit report may be used for "Bona Fide Purposes" that are substantially job-related and if the obtaining of a credit report is disclosed to the applicant or employee in writing. |
Here are the specific employer exemptions: 1) if required by federal or state law; 2) if employer is insured financial institution, including affiliate or subsidiary; 3) Credit Union Shared Guaranty Corporation approved by the Maryland Commissioner of Financial Regulation; 4) An entity registered as an investment advisor by the U.S. Securities and Exchange Commission. |
Massachusetts |
March 14, 2024 |
On March 14, 2024, the Massachusetts House of Representatives passed legislation that would stop employers from obtaining or using a true credit report for employment purposes. The pending law would be one of the most restrictive of its kind in the country and includes only limited exceptions. However, this law only limits the use of credit checks. You can still get other types of background information from screening companies, like criminal history, driving records, education, and employment verifications. |
Full Article found here. |
Nevada |
Oct.1,2013 |
An employer cannot refuse to hire, promote or take adverse action against the employee who refuses to permit a credit report that is not permitted. An employer can only request a credit report under the following conditions: 1) Obtaining a credit report is required by federal or state law. 2) Credit information is reasonably related to the position being filled. A list is provided, but it is not exclusive and an employer can justify use of credit reports for other positions. |
As mentioned, exceptions purposes are when credit information is reasonably related to the position being filled. The following are “deemed to be reasonably related” - keep in mind this list is not exclusive, an employer can justify the use of credit reports for other positions. A)The job entails the care, custody and handling of money, financial accounts, corporate credit or debit cards or other assets of the employer. B) Access to trade secrets of the employer. C) Position with managerial or supervisory responsibilities. D) Care, custody and handling or responsibility for personal information of another person. E) Access to personal financial information of another. In addition, certain employers have a right to request a credit report. 1) Federal or state charter financial institutions. 2) State or local law enforcement but only for employees with direct exercise of law enforcement authority. 3) Licensed gaming establishments. |
Oregon |
2014 |
Employers may not use credit report unless substantially job related. |
Per OAC Code 839-005-0080, the term “substantially job related” has been limited by the Labor Department to positions that require: 1) as a essential job function to have access to financial information beyond that customarily is a part of a retail transaction such as an exchange of cash, checks, credit or debit cards. The processing of loans or extensions of credit would permit a credit report if access to more detailed financial information is required to do the job ; 2) A credit report is necessary to obtain a surety or fidelity bond. |
Rhode Island |
not applicable |
Employer must advise consumer that credit report has been ordered. |
|
Vermont |
not applicable |
An employer shall not refuse to hire, recruit, discharge or otherwise discriminate on the basis of an individual’s credit report or credit history. Nor may an employer inquire about an applicant’s or employee’s credit unless:1) The report is required by state/federal law/regulation. 2) Individual will have access to confidential financial information of a commercial value obtained by specific authorization by the customer or client – normally handled by managers and those employees who must know the information to perform their job. 3) Financial institutions and credit unions. 4) Law enforcement. 5) Emergency medical personnel. 6) Firefighters. 7) Those with the financial fiduciary responsibilities regarding making payments, collecting debts, transferring money or entering into contracts. 8) Will have access to payroll information. 9) Where credit information is a “valid and reliable predictor of employee performance”. |
Also, the employer shall keep credit information confidential and destroyed when a person is not hired or leaves employment. |
Washington |
not applicable |
An employer may not request a credit report in regard to an applicant or employee unless: (1) the employer discloses the job related reason(s) for requesting the credit report to the individual in writing or: (2) the obtaining of a credit report on the consumer is required by law. |
Additionally, an employer may not obtain a report where any information contained in the report bears on the employee’s creditworthiness, credit standing or credit capacity unless it is either a.) substantially job related and the employer’s reason for the use of information is disclosed in writing or b.) required by law. |
Puerto Rico |
Oct 8, 2019 |
Act No. 150 precludes employers from verifying or investigating credit history or credit reports concerning current employees or employment applicants. Furthermore, the Act prevents employers from securing or ordering such reports from a credit agency. Taking adverse employment actions against an employee or applicant based on credit report or history information is also prohibited by the terms of the Act. |
There are exceptions to Act 150 including positions in management, positions in the Department of Justice or the Judicial Branch and public order officials. Also exempt from the Act are positions involving access to trade secrets, financial information, personal data or cash/goods subject to misappropriation equaling a minimum of $10,000. The Act further provides exemptions for positions regulated by the Puerto Rico Office of the Commissioner of Financial Institutions or for situations in which a credit report is required by federal law. In scenarios in which an exception applies, employers are required to obtain written consent from the employee or applicant as a precursor to obtaining access to an individual’s credit history or credit report. To ensure compliance with Act 150, it is recommended that employers review employment practices; violations of the Act may be subject to administrative penalties of up to $2,500 per occurrence. |
New York |
Sept 3, 2015 |
The Stop Credit Discrimination in Employment Act (“SCDEA”), which goes into effect on September 3, 2015, amends the NYCHRL by making it an unlawful discriminatory practice for employers, labor organizations, and employment agencies to request or use the consumer credit history of an applicant or employee for the purpose of making any employment decisions, including hiring, compensation, and other terms and conditions of employment. N.Y.C. Admin. Code §§ 8-102(29), 8-107(24). The SCDEA also makes it an unlawful discriminatory practice for a City agency to request or use, for licensing or permitting purposes, information contained in the consumer credit history of an applicant, licensee or permittee. Id. at § 8-107(9)(d)(1). |
Exemptions from the Law are on a position or role basis, no entire employer or industry is exempt. Positions that are exempt: A.) Employers Required by State or Federal Law or Regulations or by a SelfRegulatory Organization to Use an Individual’s Consumer Credit History for Employment Purposes. B.) Police officers, peace officers, or positions with a law enforcement or investigative function at the Department of Investigation (“DOI”). C.) Positions subject to a DOI background investigation. D.) Positions requiring bonding under federal, state, or City law or regulation. E.) Positions requiring security clearance under federal or state law. F.) Non-clerical positions having regular access to trade secrets, intelligence information, or national security information. G.) Positions involving responsibility for funds or assets worth $10,000 or more. H.) Positions involving digital security systems. |
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