- Posted by Ted W. Craig
On August 10, 2010, Illinois Governor Pat Quinn signed the Employee Credit Privacy Act. Subject to a number of exceptions, this Act prevents Illinois employers from using the credit history or credit reports of employees or applicants to make hiring, firing, termination, promotion, or other employment-related decisions. Once the law takes effect on January 1, 2011, employers will not be allowed to ask about credit history or order or obtain a credit report from employees or applicants. The employee or applicant cannot waive these rights. The Act also forbids retaliation against an employee or applicant who exercises their rights under the Act.
As mentioned previously, this law contains a number of exceptions. For example, employers can access an employee’s credit history when state or federal law requires bonding or security covering the employee, when an employee will have access to over $2,500 of safeguarded assets, when an employee will have signatory power of $100 or more, when an employee will have managerial powers, or when an employee will have access to personal or confidential information.
Statements from Illinois officials help shed light on why they passed this bill. Governor Pat Quinn stated that “a job seeker’s ability to earn a decent living should not depend on how well they are weathering the greatest economic recession since the 1930s. This law will stop employers from denying a job or promotion based on information that is not an indicator of a person’s character or ability to do a job well.” State Senator Don Harmon also spoke in favor of the law, saying, “if you lose a job and your credit is damaged as a result, and employers use your credit to prevent you from getting a job, this is a vicious cycle folks will never get out of.” Governor Quinn also explained that “we can’t allow folks who are doing their level-best to be discriminated against with respect to getting a job and keeping a job, and unfortunately some employers are using credit scores to decide whether someone gets hired, retained or promoted, and I don’t think that’s fair and I think the members of the General Assembly feel the same way.”
Credit privacy laws are becoming increasingly popular across the nation. Hawaii and Washington already have credit privacy laws similar to the new Illinois law, and about 16 other states are considering similar laws. While there is currently no Iowa law prohibiting the use of credit history when making employment decisions, this might be a good time for Iowa employers to analyze their use of credit checks when making employment decisions.
If you have questions about the Illinois Credit Privacy Act, please contact attorney Ted Craig at 515-246-4539 / tcraig@dickinsonlaw.com or another member of the firm’s Iowa Employment and Labor Law Group at employmentlaw@dickinsonlaw.com.
