Publications: Illinois Enacts Employee Credit Privacy Act: No Credit? No Problem!

Effective January 1, 2011, Illinois law will make it illegal for employers to discriminate against job applicants on the basis of their credit histories. Illinois’ Employee Credit Privacy Act,¹ signed by Governor Pat Quinn on August 10, outlaws inquiries about applicants’ and employees’ credit histories. While prohibiting employers from obtaining candidates’ credit reports in many instances, the law does permit employers to conduct thorough background investigations that do not include a credit history or report.

Under the new law employers may still make and consider credit checks when filling positions that involve (1) bonding or security under state or federal law; (2) custody of, or unsupervised access to, $2,500 or more in cash or marketable assets; (3) signatory power over businesses assets of $100 or more per transaction; (4) management and control of the business; or (5) access to personal, financial or confidential information, trade secrets, or state or national security information.

These exceptions recognize employers’ legitimate fears that money problems can motivate workers to steal. But the law also responds to a harsh reality of this recession: more Illinois workers than at any time since the Great Depression have been left jobless and with battered credit records that can be formidable barriers to their job searches and personal economic recovery efforts. According to the Bureau of Labor Statistics, Illinois’ unemployment rate was 12.2 percent in January 2010. Data released by the Illinois Department of Employment Security earlier this month showed that Illinois’ seasonally adjusted unemployment rate had dropped, but remained at a sobering 10.4 percent in June. In signing the law, Governor Quinn said, “A job seeker’s ability to earn a decent living should not depend on how well they are weathering the greatest economic recession since the 1930s,” adding, “This law will stop employers from denying a job or promotion based on information that is not an indicator of a person’s character or ability to do a job well.”

The new law’s “teeth” include the right of an aggrieved individual to sue in court for injunctive relief, damages or both, and to recover attorneys' fees incurred in successfully bringing suit. It also prohibits employers from retaliating or discriminating against anyone who has filed suit under its provisions, testified, assisted or participated in an investigation, proceeding or action concerning its violation, or opposed such a violation. Significantly, the law also prohibits employers from discriminating or retaliating against one who “was about to” do any of these things.

Employers doing business in Illinois are well advised to review, and, where appropriate, to revise their hiring and advancement policies, procedures and practices, as well as the job descriptions for those positions for which background and credit checks are done to ensure full compliance with the new Employee Credit Privacy Act.

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¹ Public Act 096-1426.