The Washington Examiner reports on a bill in the District of Columbia that would restrict the use of credit checks by employers. Illinois and Oregon have passed similar laws. In March, the Oregon governor signed a law that protects job applicants’ privacy when it comes to their credit reports. In August, Illinois Gov. Quinn signed House Bill 4658 (pdf), which creates the Employee Credit Privacy Act. The law bans employers from checking the credit of job applicants, with some exceptions. Illinois is not the first state to ban these pre-employment credit checks.
The Examiner reports:
The D.C. Council is considering a bill that would make it illegal for most employers to run credit checks on prospective employees. Employers have increasingly turned to credit checks as part of vetting potential new hires, saying that a poor credit history could reflect poor judgment. But privacy advocates say in many cases the checks delve too far into job applicants’ personal information. […]
“Many people are finding themselves caught in a Catch-22,” said Ward 1 Councilman Jim Graham, who introduced the bill in D.C. “They lose their job because of the economic downturn and then they go into debt. A job would help them get out of debt, but if they’re blocked from getting one by bad credit, then they end up in a never-ending spiral.”
Graham’s bill wouldn’t apply to jobs that require clearance for national security or from the Federal Deposit Insurance Corporation. It also doesn’t apply to supervisory, managerial or executive positions at financial institutions. But those job descriptions don’t necessarily cover all the jobs where knowing someone’s credit history could help employers prevent themselves from becoming victims of fraud, said Manesh Rath, an employment lawyer at the D.C. law firm Keller and Heckman LLP. […]
“There has not been any connection established between one’s credit history and suitability for employment,” [Paul Stephens, the director of policy and advocacy at the Privacy Rights Clearinghouse,] said, adding that credit reports aren’t always accurate. “Unless the employer can establish a nexus between a potential employee’s credit history and the job he’s applying for, running a credit check is going too far.”