August 16, 2010

Written by Heidi Seaton, Director of Implementation and Compliance

There was a very interesting development in Illinois this week.  Governor Quinn of Illinois signed the Employee Credit Privacy Act that prohibits employers from using credit information (about applicants and employers) in the hiring decision.  The act goes into effect January 1, of 2011, so employers do have a bit of time to review the act and to determine if any of the exceptions allowed in the act might apply to positions where they are currently using credit in the employment decision. 

The full text of the act can be found here: http://www.ilga.gov/legislation/publicacts/fulltext.asp?name=096-1426&GA=96&SessionId=76&DocTypeId=HB&DocNum=4658&GAID=10&Session

Illinois is one of many states that have proposed legislations and now one of a few states that have enacted legislation to limit an employer’s ability to access credit information regarding applicants and current employers.  By my count, there are now twenty states that have proposed legislation on this topic this year, and four states that have actually enacted legislations (Hawaii, Oregon, Washington, and now Illinois).  Clearly, there is perception that consumer’s credit records have suffered as a result of recent economic difficulties, and that use of credit in the hiring decision is unfairly excluding otherwise qualified applicants.

The foregoing is not legal advice, either expressed or implied.  We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.