Legislative Alert

PROPOSED LEGISLATION

FEDERAL: House bill would bar employers from using credit history in hiring process

Summary: Senator Elizabeth Warren (D-Mass.) reintroduced the Equal Employment for All Act to prohibit employers from requiring potential employees to disclose their credit history as part of the job application process.

Specifically, S. 1819 would amend the Fair Credit Reporting Act to stop employers from requiring or suggesting that applicants disclose their credit history as a condition of employment, and would bar employers from disqualifying employees based on a poor credit rating, or information on a consumer’s creditworthiness, standing, or capacity. The bill includes exemptions for positions that require national security clearance or where consideration of credit information is otherwise required by law.

Impact(s): All employers

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FEDERAL: Proposed bill would provide protections to regulated employers who are required to conduct background screening

Summary: HR. 1646, the Certainty in Enforcement Act, would amend the equal employment opportunity requirements under the Civil Rights Act of 1964 to deem an employer's consideration or use of credit or criminal records, as mandated by federal, state, or local law, to be job related and consistent with business necessity, thus making it easier for regulated employers to follow applicable screening laws and regulations.

Impact(s): FCRA compliance – for general legal review

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OTHER UPDATES

FAIR CREDIT REPORTING ACT: Plaintiff files suit alleging violations of FCRA’s pre-adverse action and disclosure requirements

Summary: A woman has filed suit against a nationwide car rental company, alleging that it violated the FCRA’s pre-adverse action requirements when it relied on a consumer report containing criminal information that belonged to her twin brother, without first providing her with an opportunity to dispute the information. Plaintiff alleges that a representative for the company called her to rescind an offer of employment before it sent her a pre-adverse notification. Plaintiff also brings a claim against the employer, alleging that it failed to provide her with a “stand-alone” disclosure form.

Impact(s): FCRA compliance – for general legal review

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FAIR CREDIT REPORTING ACT: Proposed class action filed against major coffee chain for FCRA violations

Summary: A proposed class action was filed against a nationwide coffee chain, alleging that it takes adverse employment actions against applicants without providing them with a copy of their reports and a summary of rights. The plaintiff alleges that upon receiving an initial consumer report with inaccurate criminal information, a store manager called him and told him the criminal history on his consumer report disqualified him from working for the coffee house. The plaintiff alleges that a day after the job offer was rescinded by phone he received a copy of the consumer report.

Impact(s): FCRA compliance – for general legal review

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