Illinois Bans Credit Checks for Most Employers
The Illinois legislature passed House Bill 4658, which creates the Employee Credit Privacy Act. Bill 4658, signed into law by Governor Pat Quinn on August 10, 2010, takes effect January 1, 2011 and restricts employers’ ability to conduct credit checks on applicants and use the results for employment purposes. Specifically, employers are prohibited from 1) inquiring about an applicant’s credit history; 2) ordering a credit report from a consumer reporting agency; or 3) making an employment decision based on an applicant’s credit history.
Certain employers are exempt from the law, including banks and other financial institutions; companies engaged in the insurance industry; state law enforcement or investigative units; qualified debt collection agencies; and any other state or local government agency that requires credit reports.
An employer that can establish that credit worthiness is a bona fide job requirement is also exempt. One of the following factors must be present to meet that standard:
- State or federal law requires bonding or other security covering an individual holding the position;
- The job duties include oversight or custody of cash or assets totaling at least $2500;
- The job duties include signatory power over business assets of at least $100 per transaction;
- The position is managerial which involves setting the direction or control of the business;
- The position involves access to personal or confidential information, financial information, trade secrets or State or national security information;
- The position meets criteria in administrative rules, if any, that the U.S or Illinois Labor Department has promulgated to establish the circumstances in which a credit history is a bona fide occupational requirement; or
- The employee’s or applicant’s credit history is otherwise required by or exempt under federal or Illinois state law.
Click here for the text of the legislation.
Other states that have similar statutes or are proposing such legislation include Connecticut, Georgia, Hawaii, Indiana, Maryland, Michigan, Missouri, New Jersey, New York, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Vermont, Washington and Wisconsin.