State laws regulate the use of credit information and criminal records for employment purposes

Conducting background checks on applicants and employees inconnection with employment decisions has become a commonpractice for employers of all sizes. Obtaining background infor-mation about an individual can help an employer recognize dan-gerous propensities that could expose the employer to liabilityfor negligent hiring or negligent retention, identify facts that ren-der the individual unsuitable for a particular job, detect falseinformation on an individual’s employment application orrésumé, and assess the individual’s character and trustworthi-ness. Many employers obtain background information fromthird-party vendors generically called consumer-reporting agen-cies. Others conduct their own background checks by directlycontacting persons and institutions that have had personal con-tact with the individual in question.

For many years, the primary legal concern for employers con-ducting background checks was compliance with federal andstate laws establishing procedures that employers had to followwhen they obtained information on employees and applicantsfrom a consumer-reporting agency. At the federal level, the FairCredit Reporting Act (FCRA) regulates how employers can obtainbackground-information reports (called “consumer reports”) froma consumer-reporting agency. It requires that employers complywith certain consent-and-notice requirements before obtaining aconsumer report on an applicant or employee and requires that

©2011 Wiley Periodicals, Inc.Published online in Wiley Online Library (wileyonlinelibrary.com). DOI 10.1002/ert.20356

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State Laws Regulate the Use of Credit Information and Criminal Records for Employment Purposes

Kathleen Barton and Charles M. Rice

State Regulations Update

Employment Relations Today

Kathleen Barton and Charles M. RiceEmployment Relations Today DOI 10.1002/ert

70

employers furnish certain information to the affected individual before andafter taking an adverse employment action based on information containedin the report. Although the FCRA does contain certain restrictions on thenature of the information that may be obtained on an individual—for exam-ple, it does not permit consumer reports to contain information onbankruptcies that are more than ten years old—it does not regulate what anemployer may do with information contained in consumer reports otherthan to require employers to certify that they will not use that informationto violate federal or state discrimination laws. Eleven states have laws simi-lar to the FCRA.

In recent years, state legislatures have begun to consider backgroundchecks in a different light, focusing on the kind of information that isobtained in a background check and how that information is used against anemployee or applicant. Today, there is a growing trend toward employee-friendly legislation restricting employers from obtaining and using certaintypes of background information about an applicant or employee. Therecent legislative attention paid to background checks stems in part from theeconomic fallout attributable to the current recession. The financial hard-ships that many people have suffered as a result of the recession have con-tributed to increases in credit-card debt, delinquent loan repayments, homeforeclosures, and bankruptcy. These factors will often show up on the credithistories of applicants and employees that employers obtain and use foremployment purposes. Aware that employers often use credit-history infor-mation in drawing conclusions about an individual’s dependability, trustwor-thiness, or judgment, legislators in a number of states have recently turnedtheir attention to what they perceive to be the unfair use of credit historiesto disqualify individuals from jobs to which the credit information bears nodirect or reasonable relationship.

In addition to statutes regarding the use of credit information for employ-ment purposes, many state statutes limit the use of criminal-history informa-tion for employment-related purposes. Generally, these statutes have beenenacted in response to concerns that many ex-offenders are unable to secureemployment and, as a result, return to crime or require public assistance.Proponents also argue that minority groups are arrested and convicted inhigher numbers than whites and that allowing employers to inquire aboutand use criminal history for employment purposes without limitation hasthe effect of unfairly disqualifying disproportionate numbers of minorityindividuals from employment opportunities.

Below is a state-by-state description of current state laws that restrictemployers’ use of credit histories and criminal-background information ofapplicants and employees for employment purposes.

Fall 2011

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CREDIT INFORMATION

Currently, six states—Connecticut, Hawaii, Illinois, Maryland, Oregon, andWashington—have statutes restricting the use of credit information foremployment purposes.

Connecticut

Connecticut is the latest state to enact legislation restricting the use of credithistory for employment purposes. Effective October 1, 2011, Connecticut’sstatute generally prohibits employers from requiring employees or prospec-tive employees to give their consent to a request for a credit report contain-ing information about credit scores, credit-account balances, payment his-tory, savings- or checking-account balances, or savings- or checking-accountnumbers.1 Connecticut employers may ask for such consent and use theabove-described credit information for employment purposes if (1) theemployer is a financial institution, (2) the employer is compelled by law toinquire into credit history, (3) the employer reasonably believes that theemployee has engaged in specific activity that constitutes a violation of thelaw related to the employee’s employment, (4) credit information is “sub-stantially related to the employee’s current or potential job,” or (5) theemployer has a bona fide purpose for requesting and using credit informa-tion that is substantially job-related and is disclosed in writing to theemployee or applicant.2 The statute sets forth the types of positions to whichcredit information will be deemed substantially related. Those positionsmust involve setting the direction or control of the business or part of thebusiness, access to certain financial information, fiduciary responsibility tothe employer, access to an expense account or corporate debit or credit card,access to confidential or proprietary business information or trade secrets,or access to nonfinancial assets valued at $2,500 or more.

Aggrieved individuals may file a complaint with the Connecticut LaborCommissioner. Employers who violate the Connecticut statute are liable fora civil penalty of $300 for each violation. The Connecticut Attorney Generalmay file a lawsuit to recover such penalties.3

Hawaii

In 2009, Hawaii enacted legislation regulating the use of credit informationfor employment decision-making purposes. The statute generally prohibitsan employer from asking about or considering a prospective employee’scredit history until after the prospective employee has received a conditionaloffer of employment. Upon properly obtaining the credit information, an


employer may withdraw the offer or take other adverse employment actionbased on the credit history if the information is “directly related to a bonafide occupational qualification.”4 The information does not have to be“directly related to a bona fide occupational qualification,” however, if theemployer is complying with laws compelling inquiries into an individual’scredit history or is a financial institution5 or if the particular employee hasmanagerial or supervisory duties. The statute defines a “managerialemployee” as one who formulates and effectuates management policies byexpressing and making operative the decisions of the employer. A “supervi-sory employee” is one who has the authority to “hire, transfer, suspend, layoff, recall, promote, discharge, assign, reward, or discipline other employ-ees” or the responsibility to “direct them, or to adjust their grievances, oreffectively to recommend such action.”6 The Hawaii legislature’s LaborCommittee expressed in a committee report that the “supervisory employee”exception is not intended to apply to lead employees, working foremen, andline supervisors.7

If an employer is not a financial institution, is not complying with a lawcompelling inquiry into credit history, and is not hiring a managerial orsupervisory employee, it may base an adverse employment action on prop-erly obtained credit information only when that information is “directlyrelated to a bona fide occupational qualification.” Unfortunately, the statuteprovides little guidance on the meaning of that standard. The statute pro-vides vaguely that a “bona fide occupational qualification” is one that is“reasonably necessary to the normal operation of a particular business orenterprise, and that [has] a substantial relationship to the functions andresponsibilities of a prospective or continued employment.”8 The legislativehistory of the Hawaii statute provides no additional insight into the interpre-tation of the phrase, except to indicate that the phrase will be interpretednarrowly against employers.9

The statute provides a private right to sue an employer to redress viola-tions. An aggrieved individual must first file a complaint with the HawaiiHuman Rights Commission within 180 days of the alleged violation.10 Theindividual can allow the commission to investigate the complaint or mayrequest a notice of right to sue and then file a lawsuit.11 A prevailing plain-tiff can recover up to two years of back pay, attorneys’ fees and costs,injunctive relief, and any other equitable relief the court deemsappropriate.12

Illinois

In 2010, the Illinois General Assembly passed the Employee Credit PrivacyAct specifically in response to the recession.13 Upon signing the legislation,


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Illinois Governor Pat Quinn stated that he believed the statute was neces-sary to “stop employers from denying a job or promotion based on informa-tion that is not an indicator of a person’s character or ability to do a jobwell.”14 To that end, the Illinois statute generally prohibits an employer fromasking about or obtaining an employee’s or applicant’s credit history orreport and from taking adverse action against an individual because of theindividual’s credit history or report.15 Like the previously discussed statutes,there are a number of exceptions to the Illinois statute’s coverage.

First, the statute does not apply to employers in industries dealing withbanking, insurance, or law enforcement.16 Moreover, the statute allows,under limited circumstances, employers in other industries to obtain credithistories in connection with certain positions for which a satisfactory credithistory is a “bona fide occupational requirement” of the position. These posi-tions must involve bonding or other security, the unsupervised access toassets valued at $2,500 or more, signatory authority over more than $100 in assets, managerial direction and control of the business, or access to con-fidential information, financial information, trade secrets, or state ornational security information.17 “Financial information” is defined as “non-public information on the overall financial direction of an organization,including, but not limited to, company taxes or profit or loss reports.”18 Thestatute does not apply when the employer is compelled by law to inquireinto an applicant’s or employee’s credit history.19 Moreover, the statuteexpressly permits employers to conduct and use for employment purposesthorough background checks that do not include a credit history.20

The Illinois statute prohibits waiver of the rights granted therein and alsoprohibits retaliation against an individual who has or “[is] about to” com-plain about a violation of the statute or participate in any way in any pro-ceeding concerning a violation of the statute.21

The statute grants a private right of action to aggrieved individuals andauthorizes the award of money damages, injunctive relief, and attorneys’fees to prevailing plaintiffs. Further, the statute arguably provides for indi-vidual liability of those persons making hiring, firing, and other employ-ment decisions in violation of the statute.22

Maryland

In 2011, Maryland became the fifth state to enact legislation restricting theuse of credit history for employment purposes. Maryland’s statute, the JobApplicant Fairness Act (effective October 1, 2011), generally prohibits anemployer from using an applicant’s or employee’s credit report or credit his-tory to make employment-related decisions.23 But like similar laws in otherstates, there are several exceptions to the statute’s coverage.


First, the statute does not apply to an employer that is compelled by lawto inquire into a credit report or credit history, is a financial institution, is astate-approved credit union share guaranty corporation, or provides certaininvestment advising services. Second, all other employers may use an appli-cant’s or employee’s credit report or history for employment purposes if theemployer has a “bona fide purpose” for requesting or using credit informa-tion that is “substantially job-related” and disclosed in writing to the appli-cant. The statute identifies several positions that meet this exception, such asthose that involve setting direction and control of a business, access to cer-tain personal information, fiduciary responsibility or authority to theemployer, access to trade secrets or certain confidential business information,or use of an employer-provided expense account or corporate credit card.24

The Job Applicant Fairness Act contains less severe penalties than similarlaws in Hawaii and Illinois and does not provide a private right of action.Aggrieved individuals may file a written complaint with the Maryland Com-missioner of Labor. The commissioner may assess a penalty of up to $500for the first violation and up to $2,500 for repeat violations.25

Oregon

In March 2010, Oregon became the third state to regulate the use of creditinformation for employment purposes. Oregon’s statute, the Job ApplicantFairness Act, provides generally that it is unlawful for an employer to obtainand use for employment purposes credit information about an applicant oremployee.26 The statute excepts from coverage employers that are financialinstitutions or that are compelled by law to inquire into an applicant’s oremployee’s credit history for employment purposes. The statute also doesnot apply to certain public safety and peace officer positions.27 Finally,employers may obtain and use an applicant’s or employee’s credit informa-tion if the information is “substantially job-related” to the relevant positionand the employer explains to the individual in writing why using the infor-mation is necessary.28

The Oregon Bureau of Labor and Industries (BOLI) issued final rulesregarding the meaning of “substantially job-related” in June 2010. Under therules, credit information is substantially job-related to a position if the essen-tial function of the position requires access to sensitive financial informa-tion, other than that “customarily provided in a retail transaction.”29

Applicants or employees who believe an employer has violated the JobApplicant Fairness Act can file a complaint with BOLI within one year ofthe alleged violation or bring a civil action in court. In either case, a prevail-ing applicant or employee can recover up to two years of backpay and anyother injunctive or equitable relief deemed appropriate.30


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Washington

In 2007, Washington became the first state to enact legislation regulating theuse of credit information for employment purposes. Under Washington’sstatute, which is part of a state law similar to the FCRA, an employer gener-ally may not obtain a consumer report containing credit information aboutan applicant or employee.31 There are two exceptions to the statute’s appli-cation. First, an employer may obtain and use credit information if theinformation is “substantially job related” to the relevant position and theemployer notifies the applicant or employee in writing to explain why theinformation is being used. The credit-information statute also does not applywhen an employer is required by law to inquire into an applicant’s oremployee’s credit history. Notably, even when an employer properly obtainsa consumer report containing credit information, the employer must providecertain notice to the applicant or employee who is the subject of the reportbefore taking any adverse employment action based in any way on thecredit information. The employer must provide the individual with informa-tion about the consumer-reporting agency that supplied the credit informa-tion, the individual’s rights under the Washington consumer reports statute,and a reasonable opportunity to respond to the negative information.32

Washington’s statute treats any violation of it as an unfair or deceptivetrade act and unfair competition. An aggrieved individual may file a lawsuitwithin two years of the alleged violation and can recover actual damages,costs, and attorneys’ fees. An additional $1,000 penalty applies if the viola-tion is willful.33

Other Developments Regarding Credit Information

In addition to the six states that have enacted laws limiting the circum-stances under which an applicant’s or employee’s credit history may beused for employment purposes, a number of other states and the federalgovernment are considering or have recently considered similar legislation.These states include California, Georgia, Indiana, Kentucky, Michigan, Missouri, Montana, Nebraska, New Jersey, New Mexico, New York, Ohio,Pennsylvania, Texas, and Vermont. These states’ proposed legislation havefeatures similar to those in the existing statutes regulating access to and useof credit information, such as (1) exceptions for job-related credit informa-tion; (2) exceptions for managerial, law-enforcement, and financial-institutionemployees; and (3) a requirement to provide notice to the employee or applicant of intended use of the credit information. Notably, the proposedlegislation in Michigan would apply only to applicants and recruits, notemployees.34 The proposed legislation in Ohio excepts from its coverage only


supervisory, managerial, professional, or executive positions at a financialinstitution.35 At the federal level, legislation to regulate the use of creditinformation for employment purposes was proposed in both the House ofRepresentatives and the Senate in the last Congress. Little action was takenon the legislation in either chamber, and the bills expired when thatCongress adjourned at the end of 2010. Similar legislation has not been rein-troduced in the current congressional session.

CRIMINAL HISTORIES AND RECORDS

The recent legislation regarding the use of credit information for employmentpurposes was prompted by concerns that employers were unfairly denyingjobs to individuals based on poor credit history that bore no reasonable rela-tionship to the particular job responsibilities. Similarly, states and cities haveenacted legislation protecting applicants or employees with criminal records.These statutes generally fall into one of three categories: (1) “ban-the-box”statutes that prohibit employers from asking on an initial application aboutcriminal convictions; (2) statutes that make it an unfair or unlawful employ-ment practice to take adverse employment action because of an arrest and/orconviction; and (3) statutes that limit the types of criminal offenses and pros-ecutions that an employer may ask about and consider for employment pur-poses. Each variety is discussed in the sections that follow.

Ban the Box

Ban-the-box legislation generally prohibits employers from asking aboutcriminal convictions on an initial employment application. (The name forthis type of legislation derives from the common practice of having a box onan employment application for an applicant to check or fill in if he or shehas been convicted of a criminal offense.) Hawaii was the first state to passsuch legislation in 1999. Employers in Hawaii may not ask about criminalconvictions until after a conditional offer of employment has been made.The employer may withdraw the offer based on a criminal conviction only ifa conviction record, which must be no more than ten years old, bears arational relationship to the duties and responsibilities of the position.Hawaii’s statute does not apply to employers that must inquire about crimi-nal history pursuant to federal or state law.36

Massachusetts followed Hawaii’s lead in 2010 with its own ban-the-boxlegislation. Under the Massachusetts statute, employers may not ask aboutcriminal convictions on an initial application. The ban apparently does notapply, however, to criminal-record inquiries at any point in the hiring pro-cess after the initial application. The ban expressly does not apply if federal


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or state law requires disqualification for a conviction or if the employer isrequired by federal or state law not to employ persons with criminal convic-tions.37

Several states—Connecticut, Minnesota, and New Mexico—have ban-the-box legislation applicable only to public employers. California’s StatePersonnel Board has removed the questions about criminal convictions fromapplications for state employment. A handful of cities—including Atlanta,Austin, Baltimore, Boston, Chicago, New Haven, Philadelphia, San Fran-cisco, and Seattle—and several counties in California have also enacted suchlegislation. In some of these locations, the ordinance applies both to publicand private employers, whereas in other cities, the ordinance applies only togovernment employers.

Unfair Discrimination

Some states—including Hawaii, New York, Pennsylvania, and Wisconsin—provide that it is an unlawful or unfair employment practice under some cir-cumstances to refuse to hire an applicant or to take an adverse employmentaction against an employee because of a criminal conviction.

For example, Hawaii’s statute provides that it is generally an unlawful dis-criminatory practice to take adverse employment action against an individualbecause of “arrest and court record.”38 The statute includes “being ques-tioned,” “charged with an offense,” “arrested,” and “convicted pursuant to anylaw enforcement . . . authority” in the definition of “arrest and courtrecord.”39 The statute provides, however, that an employer can take anadverse employment action against an individual if a conviction bears a rea-sonable relationship to the duties and responsibilities of the position.40 Thereis no corresponding exception for arrests or criminal charges; thus, Hawaiiemployers may not take any adverse action against an individual because ofan arrest or criminal charge that does not result in a conviction, no matterhow related the arrest or criminal charge is to the particular position.

New York’s statute provides that it is unfair discrimination to denyemployment or continued employment because of an individual’s previouscriminal conviction or because of a finding that the individual lacks “goodmoral character” based on a previous conviction unless (1) there is a directrelationship between the previous conviction and the position in question or(2) employing the individual would involve an unreasonable risk to propertyor the safety of others.41 In determining whether an adverse employmentaction based on a criminal conviction would satisfy either of these stan-dards, the employer must consider eight factors set forth in the statute.Those factors are (1) New York’s public policy of encouraging the employ-ment of individuals with criminal convictions; (2) the specific duties and


responsibilities of the position sought or held by an individual with a crimi-nal conviction; (3) whether the previous criminal offense has any bearing onthe individual’s fitness or ability to perform such duties and responsibilities;(4) the time that has elapsed since the criminal offense occurred; (5) theindividual’s age at the time of the criminal offense; (6) the seriousness of theoffense; (7) any information produced by the individual regarding his or herrehabilitation and good conduct; and (8) the employer’s legitimate interest inprotecting its property and the safety and welfare of the individual and thegeneral public. Employers must also consider any certificate of relief fromdisabilities or certificate of good conduct issued to the individual. Such acertificate creates a presumption that the individual has been rehabilitatedin regard to the specific criminal offense identified in the certificate.42

Wisconsin’s statute, enacted in 1981, prohibits employers from taking anadverse employment action against an individual because of an arrest orconviction, unless the arrest or conviction is “substantially related” to theduties and responsibilities of the particular position or render the individualnot bondable.43 The arrest at issue must be in connection with a pendingcharge.44

Pennsylvania’s statute similarly prohibits an employer from consideringfor employment purposes conviction records that do not “relate to the appli-cant’s suitability for employment” in the position sought.45 An employer thatdecides not to hire an applicant based on a criminal conviction must notifythe applicant in writing.46

Scope of Inquiries Limited

Many states allow employers to inquire about criminal history on anemployment application or at other times during the hiring process but limitthe scope of the information an employer can require an individual to dis-close. For example, in California, employers may not ask applicants oremployees about prior arrests or charges that did not result in a convic-tion.47 Additionally, California employers may not ask about convictions forcertain minor marijuana violations that are more than two years old; convic-tions for which the records have been sealed, expunged, or eradicated; ormisdemeanor convictions for which probation has been successfully com-pleted or otherwise discharged.48

Like California employers, Massachusetts employers are not allowed toask about arrests, detentions, or any violations of law from which no convic-tions resulted. Massachusetts employers also may not ask about convictionsfor misdemeanors where the date of conviction or end of incarceration,whichever is later, occurred more than five years before the date of therequest for the information. Further, Massachusetts employers may not ask


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applicants to disclose a first conviction for the following misdemeanors,regardless of when the conviction occurred: drunkenness, simple assault,affray, disturbing the peace, speeding, and minor traffic violations.49

Under Washington law, an employer may inquire about convictions thathave a relationship to the individual’s fitness to perform a job, but only ifthe date of conviction or date of prison release occurred within the past tenyears. If a Washington employer asks about arrests on an application, theemployer must also inquire as to whether charges are still pending, havebeen dismissed, or led to a conviction of a crime involving behavior thatwould adversely affect job performance and as to whether the arrestoccurred within the previous ten years.50

Finally, some states, such as Ohio, prohibit employers from asking appli-cants about juvenile arrests for which the records has been expunged.51

WHAT IS AN EMPLOYER TO DO?

The increasing prevalence of state and local laws regulating employment-related inquiries about credit histories and criminal records and the uses towhich employers put such information will affect many common employ-ment practices, particularly in the area of applicant screening. Employersshould carefully review their employment applications and background-check practices to ensure they comply with all applicable laws. Because thestate laws in this area vary from state to state, employers operating in multi-ple jurisdictions may encounter significant challenges in developing uniformhiring practices for all of their locations. The guidelines that follow suggestsome matters for employers to consider in reviewing their background-checkpractices.

1. Limit credit checks to jobs for which they are truly relevant. Cur-rently, only six states regulate the use of credit information for employ-ment purposes, and all of those states permit the use of that informationwhen applicable law requires inquiry into an individual’s credit historyor when credit information is relevant to the job in question, althoughthe standards for determining that relevance vary among the six states.In states without such laws, the blanket use of credit information todetermine suitability for any job, regardless of the nature of the position,raises legal concerns under general antidiscrimination laws because suchblanket use may have a disproportionate adverse effect (a “disparateimpact”) on minorities. If the use of credit information is challenged ondisparate-impact grounds, the employer can defend against the claim byshowing that the use of credit information is job-related and consistentwith business necessity. If that information is used to screen applicants


for jobs to which having a satisfactory credit history is not demonstrablyrelevant, the employer may be vulnerable to liability for disparate-impactdiscrimination. Thus, the better practice in all states is to use creditinformation as a screening tool only in connection with jobs for whichthe employer can articulate a strong degree of relevance of the creditinformation to the nature of the job. Typically, credit information will bemost relevant to jobs involving employee access to financial records,company credit cards, or employer or customer funds, because having apoor credit record or a high level of debt may reasonably justify a per-ception that the individual would have an enhanced motivation to misap-propriate funds. In determining whether the use of credit information isappropriate for certain jobs, employers in Connecticut, Hawaii, Illinois,Maryland, Oregon, and Washington should check the state statute regu-lating the use of credit information to ensure that they can satisfy thestandards for relevance set forth in the statute.

2. Eliminate inappropriate questions from your employment applica-tion form. Carefully review your employment application form toensure that it does not contain questions that would be unlawful orlegally risky under applicable federal and state laws. Employment appli-cations rarely ask for credit information, and such questions wouldalmost always be legally risky, given that application forms are usuallynot tailored to particular positions for which credit information would behighly relevant. Employment application forms often do, however, askabout an applicant’s criminal record. In jurisdictions with ban-the-boxlaws, those questions should be eliminated. In other jurisdictions,employers should ensure that questions are limited to convictions, asquestions about arrests that did not result in convictions are unlawful insome states and pose a risk in all states of disparate-impact discrimina-tion claims against which an employer may have a difficult time defend-ing because an arrest, standing alone, does not establish that the individ-ual has engaged in criminal conduct.

Even when an application question about a criminal record is limitedto convictions, guilty pleas, or no-contest pleas, employers should makesure that the question does not encompass criminal information thatapplicable state law does not allow an employer to obtain or use. Forexample, employers with operations in California should add a caveat toan application question about criminal convictions stating that applicantsshould not disclose California misdemeanor marijuana convictions thatoccurred more than two years earlier; convictions for which the record hasbeen judicially ordered sealed, expunged, or judicially eradicated; misde-meanor convictions that were dismissed with a certificate of rehabilitationand pardon after successful completion of probation; or participation in a


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criminal diversion program. When application questions about criminalhistory are permitted by state law, they should always be accompaniedby a disclaimer stating that a criminal conviction will not automaticallydisqualify the applicant from employment and that the employer willconsider the particular circumstances surrounding the conviction.

3. Review your consumer report practices. Employers that use con-sumer reports for employment purposes should ensure that their prac-tices relating to those reports comply with the FCRA and similar statelaws regulating consumer reports. They should also ensure that the con-sumer reports they obtain will not contain credit or criminal informationthat employers may not lawfully acquire under applicable state law. Forexample, employers in Hawaii may not ask about or use an applicant’scredit history until an offer of employment has been extended to theapplicant. Obtaining a pre-offer consumer report containing credit infor-mation about an applicant would almost certainly violate the Hawaiistatute.

4. Train management. Managers who interview applicants for employ-ment and candidates for promotion might unintentionally violate applica-ble state laws regulating the use of credit or criminal information if theyare unfamiliar with those laws. Thus, the familiarity of an employer’sHR department with these laws may not be sufficient to protect theemployer from liability. All employees who interview applicants and pro-motion candidates and all managers with the authority to make employ-ment decisions should receive training on applicable laws concerning theacquisition and use of credit information and criminal histories foremployment purposes.

NOTES

1. Conn. Pub. Acts 11-223, § b (effective Oct. 1, 2011).2. Conn. Pub. Acts 11-223, § b (effective Oct. 1, 2011).3. Conn. Pub. Acts 11-223, § a (4)-d (effective Oct. 1, 2011).4. Haw. Rev. Stat. § 378-2.7(a)(1).5. Haw. Rev. Stat. § 378-2.7(a)(4).6. Haw. Rev. Stat. § 378-2.7(a)(2)-(4), (b).7. Conf. Comm. Rep. S. 25-31, Reg. Sess., at 3 (Haw. 2009).8. Haw. Rev. Stat. § 378-3(2).9. Stand. Comm. Rep., S. 25-1223, Reg. Sess., at 3 (Haw. 2009).10. Haw. Rev. Stat. § 368-11.11. Haw. Rev. Stat. § 368-12.


12. Haw. Rev. Stat. § 378-5.13. 820 Ill. Comp. Stat. 70/1.14. Press Release, Ill. Gov’t News Network, Governor Quinn Signs Law to End Pre-Employment Credit

Checks: New Law Prohibits Employers from Discriminating Based on a Job Seeker’s or Employee’sCredit History (Aug. 10, 2010) (internal quotation marks omitted) (available athttp://www.illinois.gov/PressReleases/ShowPressRelease.cfm?SubjectID=1&RecNum=8737).

15. 820 Ill. Comp. Stat. 70/10 (a).16. 820 Ill. Comp. Stat. 70/517. 820 Ill. Comp. Stat. 70/10(b).18. 820 Ill. Comp. Stat. 70/5.19. 820 Ill. Comp. Stat. 70-10(b)(7).20. 820 Ill. Comp. Stat. 70/30.21. 820 Ill. Comp. Stat. 70/15 & 70/20.22. See 820 Ill. Comp. Stat. 70/5 (definition of “employer” includes “an individual . . . [that] is an agent

of an employer.”23. S.B. 132, 2011 Leg., 428th Sess. (Md. 2011) (section (B)).24. S.B. 132, 2011 Leg., 428th Sess. (Md. 2011) (section (A), (C)(1)(II), (C)(2)).25. S.B. 132, 2011 Leg., 428th Sess. (Md. 2011) (section (D)(1), (4)).26. Or. Rev. Stat. § 1(1).27. Or. Rev. Stat. § 1(2)(a)-(c).28. Or. Rev. Stat. § 1(2)(d).29. Or. Admin R. 839-005-0080(3). An employer would not, for example, be entitled to obtain credit

information on an applicant for a retail sales position simply because a sales clerk gains access tocustomers’ credit- and debit-card numbers in the course of making a sale. Or. Admin. R. 839-005-0080(3)(a).

30. Or. Rev. Stat. § 1(3) (incorporating Or. Rev. Stat. § 659A.885(1)-(2)).31. Wash. Rev. Code § 19.182.020(2)(c) (2011).32. Wash. Rev. Code § 19.182.020(2)(c), (c)(i)-(ii), (d).33. Wash. Rev. Code § 19.182.150.34. H.B. 4363, 2011 Leg., 96th Reg. Sess. (Mich. 2011).35. H.B. 131, 129th Gen. Assem., Reg. Sess. (Ohio 2011).36. Haw. Rev. Stat. § 378-2.5(b)-(c).37. Mass. Gen. Laws ch. 151B, § 4.38. Haw. Rev. Stat. § 378-2 (1).39. Haw. Rev. Stat. § 378-1.40. Haw. Rev. Stat. § 378-2.5.41. N.Y. Correct. Law § 752.42. N.Y. Correct. Law § 753(a)-(b).43. Wis. Stat. §§ 111.321, 111.322, & 111.33544. Wis. Stat. § 111.335(1)(b).45. 18 Pa. Cons. Stat. § 9125.46. 18 Pa. Cons. Stat. § 9125 (b).


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47. Cal. Lab. Code § 432.7.48. Cal. Lab. Code § 432.8; Cal. Regs. tit. 2, § 7287.4(d)(1)(B).49. Mass. Gen. Laws ch. 151B, § 4.50. Wash. Admin. Code § 162-12-140(3)(b), (d).51. Ohio Rev. Code § 2151.357(G).

Kathleen Barton is an associate on the Labor and Employment Team inthe Atlanta, Georgia, office of Kilpatrick Townsend & Stockton LLP. Shemay be reached at [email protected]. Charles M. Rice isa senior attorney on the Labor and Employment Team in the Atlanta,Georgia, office of Kilpatrick Townsend & Stockton LLP, and may bereached at [email protected].

Documents

State laws regulate the use of credit information and criminal records for employment purposes