Friday, January 13, 2012

Can an Employer make hiring decisions based on an applicant's credit history?

Illinois' Employee Credit Privacy Act, 820 ILCS 70/1, et seq., became effective on January 1, 2011.  That Act makes it illegal for employers to:
  • Refuse to hire or recruit, discharge, or otherwise discriminate against an individual with respect to employment, compensation, or a term, condition, or privilege of employment because of the individual's credit history or credit report;
  • Inquire about an applicant's or employee's credit history; or 
  • Order or obtain an applicant's or employee's credit report from a consumer reporting agency.
So, in other words, an applicant's or employee's credit history is completely off limits for employment purposes, under most circumstances.  The statute provides for a private right of action for anyone injured by a violation of this act.  Injured parties can also recover attorneys' fees pursuant to the Act.

It is also worth noting that certain industries are specifically excluded from the definition of "employer," including banks, insurance companies, and law enforcement officials.  Also, the statute does not apply if a satisfactory credit history is an established bona fide occupational requirement.  In order to determine whether an established bona fide occupational requirement exists, the statute gives a seven-part test, only one element of which must apply.  

HERE is a link to the statute.

2 comments:

systempain said...
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Lena Harris said...

Supposedly, employers do not have the right to base its decision in hiring an applicant just because of the credit status. I salute the Illinois state for supporting an individual's right to privacy during an employment process.

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