Employee privacy rights may soon be bolstered around the nation. Recently, lawmakers in almost half of the states have proposed or approved restrictions on an employer’s use of the credit history of applicants and employees when making employment decisions. Until 2007, employers in every state could lawfully assess an individual’s credit information when making employment decisions. However, in 2007, Washington became the first state of several states to enact legislation restricting such activity. The Washington law prohibits an employer from procuring an employee’s or applicant’s credit history except if the information is job related or required by law. Hawaii passed a similar law in 2009, and Illinois and Oregon followed suit in 2010.
In 2011, the trend toward protecting employee privacy continued. This legislative session, bills limiting employers’ use of credit history were introduced in at least 22 states, including California, Colorado, Connecticut, Florida, Georgia, Indiana, Kentucky, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, Ohio, Pennsylvania, South Carolina, Texas and Vermont. Most proposed legislation provides exceptions to the credit-related restrictions for jobs where considering credit information would be necessary or review of such information is required by state or federal law. Otherwise the states’ proposals vary. Some bills, such as those in Florida and Michigan, apply only to new employees and do not limit the use of credit history for existing employees. Others, like Montana, require employers to give employees notice when credit history is utilized in an employment decision. Enforcement of the credit provisions also differs from state to state. For example, the Michigan bill provides a private right to sue, while the Maryland legislation only allows a complaint to the state labor commission which can assess a civil penalty. In Georgia and Montana, wrongful access or use of employee credit history would be a misdemeanor, and penalties would be assessed for violations.
Of those states considering workplace credit restrictions in 2011, Maryland became the first to enact the legislation on April 12, 2011. The Georgia bill, S.B. 42, is under consideration by the Senate Committee on Insurance and Labor. On May 7, 2011, Florida S.B. 1562 was indefinitely postponed and withdrawn from consideration.