By Courtney Lords, Associate Senate Bill 1045, approved during the 2010 Special Session, made it unlawful for an employer to obtain or use an applicant’s or employee credit history for employment purposes. Employment purposes include hiring, firing, promotion, demotion, suspension, compensation and retaliation.
However, the new law provides exceptions for when a credit history may be used for employment purposes. These exceptions include:
(a) employment of a public safety officer who is a member of a law enforcement unit; (b) employers who are federally insured such as banks or credit unions; (c) employers who are required by law to use individual credit; or (d) when one’s credit history is “substantially job-related” and the employer discloses the use of such history to the applicant or employee in writing.
Based on this new law, employers should revise any existing practices and/or policies that use or refer to use of credit history for employment purposes, unless one of the above exceptions applies.