Client Alert: Connecticut and Maryland Limit Use of Credit Reports for Employment Decisions - A Creative Services, Inc. Compliance Corner Article

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Client Alert: Connecticut and Maryland Limit Use of Credit Reports for Employment Decisions


Effective October 1, 2011, Connecticut and Maryland will join Hawaii, Illinois, Oregon, and Washington to become the most recent states to limit employers' use of credit histories in employment decisions. Several other states are considering similar laws, and the Equal Employment Opportunity Commission is currently analyzing and critiquing the use of credit screenings in the employment context.

Check Yourself Before You Check Your Applicants

Connecticut's new law - Public Act No. 11-223 - prohibits any Connecticut employer with more than one employee from requiring " an employee or prospective employee to consent to a request for a credit report that contains information about the employee's or prospective employee's credit score, credit account balances, payment history, savings or checking account balances or savings or checking account numbers as a condition of employment."  Please refer to attached for information regarding Connecticut’s Public Act No. 11-223.

Maryland’s governor signed the Job Applicant Fairness Act which will restrict Maryland employer’s use of an individual’s credit history report for hiring and making other employment-related decisions.  The new law does not apply to employers that are financial institutions, state-approved credit unions, investment advisors registered with the Securities and Exchange Commission, and companies that are required by federal law to examine credit history data.

What Employers Should Do

1. Employers should ensure their policies and procedures do not require the use of credit reports in a manner prohibited by state acts; 
2. Employers should make sure that any use of a credit report meets at least one of the exemptions if available; 
3. If use of a credit report is permitted, the relevant applicant or employee should be notified in writing of such; and
4. Employers should ensure compliance with the requirements of the federal Fair Credit Reporting Act (FCRA).

If you have any questions regarding your background screening services or the provisions of the Act or its implications, please contact Jack Nichols, Director and General Counsel, Creative Services, Inc. at 508-339-5451 x211.

This Client Alert is a courtesy notification for our clients and should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult a lawyer concerning your own situation and any specific legal questions you may have.

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