As we reported in a prior post, there is a developing legislative trend to restrict employers’ use of credit report information in making adverse employment decisions (e.g., hiring, promotion, termination) regarding prospective or current employees.  There are currently 18 states considering legislation in this area: California, Indiana, Kentucky, Missouri, Nebraska, New Mexico, New York, Texas, Connecticut, New Jersey, Vermont, Maryland, Pennsylvania, Georgia, Ohio, Florida, Michigan, and Montana.  Hawaii, Illinois, Oregon, and Washington already have laws restricting employers’ use of employee credit report information for employment decisions. 

The bills vary in scope.  Some bills apply only to prospective employees while others apply to both prospective employees and current employees.  For example, legislation in Florida would make it an improper employment practice for an employer “to directly or indirectly use a job applicant’s personal credit history as a hiring criterion” unless the applicant’s credit history is directly related to the position sought.  Even if the applicant’s credit history is directly related to the position, the employer may not use the applicant’s credit history as the determining factor in whether to hire the applicant.  The Florida bill does not restrict an employer’s ability to use the credit report information of current employees to make employment decisions.

We will provide further updates as to the progress of these bills as state legislative sessions begin to wrap up.