Client Alert - Employment Law Update
New Illinois Law Restricts Employers' Use of Credit Information
On August 10, 2010, Governor Pat Quinn signed into law the Employee Credit Privacy Act (the Act). The new law takes effect January 1, 2011, and with a few exceptions, applies to employers of any size.
Under the Act, employers may not: (1) fail or refuse to hire, recruit, discharge, or otherwise discriminate against individuals because of their credit history or credit reports; (2) inquire about an applicant or employee's credit history; or (3) order or obtain an applicant or employee's credit report. Employers are expressly permitted to conduct thorough background checks, and may still obtain reports as long as credit information is not included.
There are certain exceptions contained in the Act. First, it does not apply to: (1) banks and financial institutions, (2) insurance or surety businesses, (3) debt collectors, and (4) certain government agencies. In addition, the Act permits the use of credit information in making employment decisions if it is related to a "bona fide occupational requirement." This includes: (1) positions where bonding or other security is required by state or federal law; (2) positions involving custody of, or unsupervised access to, cash or marketable securities in the amount of $2,500 or more; (3) positions involving signatory power over business assets of $100 per transaction; (4) positions in management that involve setting the direction or control of the business; (5) positions involving access to personal, confidential, financial, trade secret, or State or national security information; or (6) positions meeting criteria in any administrative rules of the federal government or Illinois Department of Labor.
Enforcement Provisions
Employees may bring actions in state court to enjoin violations of the Act, or to recover damages, which include the recovery of attorneys fees. The new law also prohibits employers from retaliating against an employee for: (1) filing a complaint under the Act; (2) testifying, assisting, or participating in an investigation, proceeding, or action concerning a violation of the Act; or (3) opposing a violation of the Act. Importantly, retaliation claims may be brought where employees claim they were "about" to do any of the foregoing.
What to Do
Given the potential for costly litigation, employers not exempted under the Act should be wary of their use of credit information. Employers are well-served to review their hiring policies, procedures, job descriptions, and forms to ensure compliance. In addition, although there are numerous exemptions in the Act, employers are still required to comply with other laws relating to obtaining credit information, such as the Fair Credit Reporting Act.
If you have any questions about how this legislative enactment will affect your business or have questions about your employment policies and practices in general, please contact Mr. Gonzalez at 312-558-9779 or at egonzalez@elvisgonzalezltd.com.
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