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Illinois Passes H.B. 4658 Employee Credit Privacy Act
Employee Credit Privacy Act (H.B. 4658)
Signed into Law on: August 10, 2010
Effective Date: January 1, 2011
Illinois has become the most recent state to react to the effect of the impact on the economic downturn on employees’ credit histories by restricting employers from using credit information in employment decisions.
Details of the Act:
- Prohibits most employers from using an applicant’s or employee’s credit history as a factor in any employment decision, including hiring, discharging and terms of employment.
- Prohibits employers from inquiring into an applicant’s or employee’s credit history or obtaining a credit history report from a consumer reporting agency.
- Restricts use of a broad range of credit information regardless of the source of such information; it is NOT limited solely to information obtained from a consumer reporting agency.
- Applies to employers of any size.
- Employers may not retaliate or discriminate against a person for exercising rights under the Employee Credit Privacy Act.
- Employers who violate the Act may be sued and ordered to pay damages including attorneys’ fees.
- Does not allow waivers of the Act’s rights and invalidates any such waivers that exist.
Specific Exclusions:
- Many government employers
- Banks
- Savings and loan associations
- Other financial institutions
- Debt collectors
- Insurance companies
- Surety businesses
Limited Exceptions:
Bona fide occupational qualification (BFOQ): The Act provides limited exceptions that allow employers to use credit information where such information is related to a bona fide occupation qualification for a particular position or group of employees. This exception applies generally to those positions involving money-handling or other confidential job duties, such as:
- those that require bonding by state or federal law;
- employees who have unsupervised access to cash or certain assets valued at $2500;
- employees who have signatory power of $100;
- employees who are in a managerial position which involves setting direction or control of the business; and
- employees who have access to confidential information, financial information or trade secrets.
Note: The Act includes other limited exceptions and contemplates that future administrative regulations may define additional categories of bona fide occupational requirements permitting exceptions of this Act. Notably, the Act specifically incorporates BFOQ definitions from either the state or federal Departments of Labor.
To review the entire Bill visit: http://www.ilga.gov/legislation/fulltext.asp?DocName=09600HB4658sam001&GA=96&SessionId=76&DocTypeId=HB&LegID=48740&DocNum=4658&GAID=10&Session=
This is for informational purposes only. It should not in any way be considered legal advice. Please consult with your legal department for all matters concerning employment and labor decisions.
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Oregon Legislature Enacts Workplace Credit Check Ban
With limited exceptions, employers may not use credit histories for employment-related decisions.
During its February 2010 special session, the Oregon Legislature adopted Senate Bill 1045, prohibiting employers from using credit histories in making employment-related decisions. When the governor signs the bill into law, which he is expected to do, Oregon will join Washington and Hawaii as one of three states that have effectively banned workplace credit checks. This trend underscores the importance of employers and in-house counsel being aware of state law restrictions pertaining to credit and background checks, particularly in
multistate businesses.
The law goes into effect on July 1, 2010, and makes it “an unlawful employment practice for an employer to obtain or use for employment purposes information contained in the credit history of an applicant for employment or an employee, or to refuse to hire, discharge, demote, suspend, retaliate or otherwise discriminate against an applicant or an employee with regard to promotion, compensation or the terms, conditions or privileges of employment based on information in the credit history.”
The new law does not affect an employer’s ability to conduct criminal background checks or investigate a prospective employee’s employment history.”
Notably, the Oregon law differs from the federal Fair Credit Reporting Act. Under the federal act, an employer can make employment-related decisions based on credit history but, prior to running a credit check, must notify prospective employees in writing and receive their consent. Additionally, if the employer decides not to hire because of the credit report, the employer has disclosure, notice and other obligations. In contrast, the Oregon law creates an outright ban on the use of credit history in employment-related decisions.
There are four exceptions to the prohibition:
- Bank and credit union employers
- Employers that are required by state and federal law to use credit histories for employment purposes
- Public safety officer employers
- Employers that can demonstrate that credit information is "substantially job-related” and that provide written disclosure of the reasons for the use of the credit check
The statute does not further define what “substantially job-related” means, nor has the Oregon Bureau of Labor and Industries (BOLI) adopted rules to inform employers on how it will be applied.
In the absence of clear rules or guidance from BOLI, employers that intend to continue utilizing credit histories after July 1, 2010, should proceed with caution and consult legal counsel to determine whether they fit into one of the statute’s exceptions. If they do not fit within an exception, employers should develop alternatives to current practices by July 1, 2010, to avoid penalties and civil liability. A violation of the new law is an unlawful employment practice, and an aggrieved individual can file a complaint with BOLI and a civil lawsuit for injunctive relief, reinstatement or back pay, and attorney’s fees.
Compliance steps:
- Do not obtain credit histories for employees or applicants on or after July 1, 2010, unless your company fits squarely into an enumerated exception.
- Seek counsel before concluding that credit information is “substantially job-related.”
- You may obtain criminal background checks as before.
Disclaimer: This advisory is a publication of Davis Wright Tremaine LLP. Our purpose in publishing this advisory is to inform our clients and friends of recent legal developments. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations.
(Source: Corporate Finance Law Blog of Davis Wright Tremaine LLP, March 30, 2010)
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Illinois Passes H.B. 5411 Regarding Medical Student Background Checks
Passed on March 12, 2010, House Bill 5411 (Rep. William Burns, D-Chicago) amends the Medical School Matriculant Criminal History Records Check Act. Criminal history record checks are required by law for students applying to medical school and were previously conducted by the Illinois State Police. This bill allows medical schools to use a criminal history record check entity approved by the State, as an option. There are concerns there may be out-of-state incidents in an applicant’s history not easily identifiable by the state police. Each requesting medical school is solely responsible for any fees associated with using the entity. Return to Top
E-Verify Update 3/17/10
E-Verify Update - DHS Unveils Initiatives to Enhance E-Verify
Agreement with Department of Justice and Outreach Initiatives Will Strengthen E-Verify for Employers and Employees
Department of Homeland Security (DHS) Secretary Janet Napolitano today joined U.S. Citizenship and Immigration Services (USCIS) Director Alejandro Mayorkas to announce a trio of initiatives to strengthen the efficiency and accuracy of the E-Verify system.
These initiatives include a new agreement with the Department of Justice that will streamline the adjudication process in cases of E-Verify misuse and discrimination; an informational telephone hotline for employees to provide a more timely, effective and seamless customer experience for workers seeking E-Verify information; and new training videos focusing on E-Verify procedures and policies, employee rights and employer responsibilities in English and Spanish.
“E-Verify is a smart, simple and effective tool that helps employers across the country maintain a legal workforce,” said Secretary Napolitano. “The initiatives announced today will provide essential information to workers about their rights and ensure that E-Verify is used fairly while bolstering the Department's efforts to protect critical employment opportunities.”
“USCIS continues to partner with our federal colleagues, as well as industry and employee representatives, to build a verification program that is accurate, efficient and fair for employers and workers alike,” said Director Mayorkas. “We look forward to working with our colleagues in the Department of Justice to ensure the continued integrity and improvement of E-Verify.”
“This agreement will better enable us to protect individuals who are authorized to work in this country from national origin or citizenship-status discrimination,” said Assistant Attorney General for Civil Rights Division Thomas Perez. “We will not hesitate to take action against employers who violate our nation’s civil rights laws.”
The Memorandum of Agreement signed between USCIS and the Department of Justice’s Office of Special Counsel for Unfair Immigration-Related Employment Practices establishes a streamlined process for addressing potential cases of discrimination and employer misuse of E-Verify and establishes protocol between USCIS and the Department of Justice for referring matters that fall within the agencies’ respective jurisdictions.
The two new, educational training videos, explaining E-Verify procedures and policies, employee rights and employer responsibilities in English and Spanish were created by the DHS Office for Civil Rights and Civil Liberties and are viewable at www.dhs.gov/e-verify and www.youtube.com/ushomelandsecurity.
Additionally, the USCIS E-Verify help line will now offer employees information about the E-Verify process, as well as assistance in completing the Form I-9 (Employment Eligibility Verification). Callers can also use the help line to file complaints about possible discrimination or employer misuse of the E-Verify program. The hotline number is (888) 897-7781 and will be active beginning April 5, 2010.
(Source: U.S. Department of Homeland Security, March 17, 2010)
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GEORGETOWN: Lewes cab company on probation for failure to do background checks
Dover – The Delaware Division of Motor Vehicles' has placed Comfort Ride Express Inc. of Lewes on Administrative Probation based on findings of a recent investigation associated with the death of a Lewes woman.
The DMV investigation was prompted by allegations that the individual accused of murdering a Lewes woman in November, 2009 was a valid driver working for Comfort Ride Express and had a criminal history that should have prevented him from working in such a capacity. READ MORE
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A reality check for TV series producers
Questionable behavior of some wannabe stars has the reality TV industry rethinking its vetting processes.
Reporting from Los Angeles and New York - Michaele and Tareq Salahi were a reality TV producer's dream. Until they became a nightmare. READ MORE
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Former UA Employee Slips Through Sex Offender Laws
FAYETTEVILLE, Ark. -- 40/29 News has learned that a former University of Arkansas employee, accused of breaking into a fraternity house, had a checkered past -- including a past arrest for sex crimes.
But at the time of his employment, his criminal past was never reviewed. And many are wondering how did he slip through the cracks? READ MORE
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E-Verify Update
On August 26th, a federal district court in Maryland upheld DHS’ E-Verify federal contractor rule and dismissed a Chamber of Commerce lawsuit to halt the implementation of the rule. The court held that contracting with the federal government is voluntary, thus they are not required to participate in the E-Verify system. The court further held that E-Verify is not limited to employment verification of new hires, since the Congress could have explicitly prohibited such an application, but did not. The ruling allows for the implementation of the E-Verify requirement for federal contractors to go into effect as scheduled on September 8, 2009.
(Source: Chamber of Commerce of the United States, et al. v. Napolitano, S.D. Md., Civil Action No. AW-08-3444, 8/26/09) Return to Top
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