Effective January 1, 2011, Illinois employers will be prohibited from (1) inquiring about an applicant’s or employee’s credit history, (2) ordering or obtaining an applicant’s or employee’s credit report from a consumer reporting agency (e.g., background check vendor), and (3) making employment decisions based upon an applicant’s or employee’s credit history or credit report.
Certain banks, insurance businesses, debt collectors and state/local government agencies are excluded from coverage under Illinois’ new Employee Credit Privacy Act (ECPA). Similarly, even if an employer is not excluded from coverage under the ECPA, the law does not prevent an inquiry or employment action if a satisfactory credit history is an “established bona fide occupational requirement for a particular position or a particular group of an employer’s employees.” In order for a satisfactory credit history to be a “bona fide occupational requirement,” at least one of the following circumstances must be present:
- State or federal law requires bonding or other security covering an individual holding the position.
- The duties of the position include custody of or unsupervised access to cash or marketable assets valued at $2,500 or more.
- The duties of the position include signatory power over business assets of $100 or more per transaction.
- The position is a managerial position which involves setting the direction or control of the business.
- The position involves access to personal or confidential information, financial information, trade secrets, or State or national security information.
- 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.
- The employee’s or applicant’s credit history is otherwise required by or exempt under federal or State law.
It should be noted that the ECPA does not prohibit employers from conducting a thorough background investigation, which may include obtaining a report and/or investigative report (without information on credit history) pursuant to the Fair Credit Reporting Act.