Recent state law developments will affect whether and to what extent certain employers can conduct credit and criminal background checks on employees and applicants. Employers, particularly multi-state employers, should be sure to review these new requirements and adjust their practices accordingly.
The Commonwealth has changed how employers access and use criminal offender record information ("CORI") under a new law signed by Governor Deval Patrick on August 6, 2010. Among other things, the new CORI law bans the use of questions about criminal history on written employment applications. This ban becomes effective November 4, 2010. The law also creates a new method and database for employers to access criminal records, replacing the current procedure with the Criminal History Systems Board. This becomes effective in May 2012.
Illinois employers will have a tougher time conducting credit checks on applicants and employees and using the information for employment purposes beginning January 1, 2011. The state’s new Employee Privacy Act (House Bill 4658), signed by Governor Pat Quinn on August 10, 2010, prohibits all but a handful of employers from:
- inquiring into an applicant’s or an employee’s credit history;
- ordering a credit report on an applicant or employee from a consumer reporting agency; or
- taking any adverse employment action (such as refusing to hire) because of the individual’s credit history or credit report.
An aggrieved individual can bring a private cause of action in state court to enforce the Act and can seek injunctive relief and damages as well as costs and attorneys’ fees.
Oregon employers’ ability to conduct credit checks and use the information for employment purposes has been significantly restricted since July 1, 2010, but the implications of this law extend well beyond state borders. With limited exceptions, Oregon Senate Bill 1045 prohibits employers from considering for employment purposes any information that bears on a consumer’s creditworthiness, credit standing or credit capacity, unless such information is substantially related to the individual’s current or potential job. Employers who believe credit information meets this job-related standard must provide the employee or applicant the reasons for their determination in writing.