Illinois Ban on Credit Background Checks, Effective January 1, 2011
Posted by Heather Anderson on Thu, Jan 27, 2011 @ 09:00 AM
It’s official. This month Illinois implemented the Employee Credit Privacy Act, stating that “employment based on credit history or credit report not permitted.”
As published on the Illinois General Assembly website (www.ilga.gov), Public Act 096-1426, effective 1.1.11, restrictions are outlined as follows:
“Section 10. Employment based on credit history or credit report not permitted.
(a) Except as provided in this Section, an employer shall not do any of the following:
(1) Fail or 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.
(2) Inquire about an applicant's or employee's credit history.
(3) Order or obtain an applicant's or employee's credit report from a consumer reporting agency.
(b) The prohibition in subsection (a) of this Section does not prevent an inquiry or employment action if a satisfactory credit history is an established bona fide occupational requirement of a particular position or a particular group of an employer's employees. A satisfactory credit history is not a bona fide occupational requirement unless at least one of the following circumstances is present:
(1) State or federal law requires bonding or other security 
covering an individual holding the position.
(2) The duties of the position include custody of or unsupervised access to cash or marketable assets valued at $2,500 or more.
(3) The duties of the position include signatory power over business assets of $100 or more per transaction.
(4) The position is a managerial position which involves setting the direction or control of the business.
(5) The position involves access to personal or confidential information, financial information, trade secrets, or State or national security information.
(6) The position meets criteria in administrative rules, if any, that the U.S. Department of Labor or the Illinois Department of Labor has promulgated to establish the circumstances in which a credit history is a bona fide occupational requirement.
(7) The employee's or applicant's credit history is otherwise required by or exempt under federal or State law.”
We encourage you to consider your current practices in regard to running credit background checks on potential and current employees. Even if your company isn’t located in Illinois (or Washington, Oregon or Hawaii where there is similar legislation), it’s prudent to understand what criminal and credit background check practices you currently have in place and be ready for changes if and when they come to your state.
States considering legislation to ban the use of credit background checks for employment purposes are California, Missouri, Ohio, New Jersey, Michigan and Wisconsin.
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