Employee Credit Privacy Act (H.B. 4658)
Signed into Law on: August 10, 2010
Effective Date: January 1, 2011

Illinois has become the most recent state to react to the effect of the impact on the economic downturn on employees’ credit histories by restricting employers from using credit information in employment decisions.

Details of the Act:
• Prohibits most employers from using an applicant’s or employee’s credit history as a factor in any employment decision, including hiring, discharging and terms of employment.
• Prohibits employers from inquiring into an applicant’s or employee’s credit history or obtaining a credit history report from a consumer reporting agency.
• Restricts use of a broad range of credit information regardless of the source of such information; it is NOT limited solely to information obtained from a consumer reporting agency.
• Applies to employers of any size.
• Employers may not retaliate or discriminate against a person for exercising rights under the Employee Credit Privacy Act.
• Employers who violate the Act may be sued and ordered to pay damages including attorneys’ fees.
• Does not allow waivers of the Act’s rights and invalidates any such waivers that exist.

Specific Exclusions:
• Many government employers
• Banks
• Savings and loan associations
• Other financial institutions
• Debt collectors
• Insurance companies
• Surety businesses

Limited Exceptions:
Bona fide occupational qualification (BFOQ): The Act provides limited exceptions that allow employers to use credit information where such information is related to a bona fide occupation qualification for a particular position or group of employees. This exception applies generally to those positions involving money-handling or other confidential job duties, such as:

o those that require bonding by state or federal law;
o employees who have unsupervised access to cash or certain assets valued at $2500;
o employees who have signatory power of $100;
o employees who are in a managerial position which involves setting direction or control of the business; and
o employees who have access to confidential information, financial information or trade secrets.

Note: The Act includes other limited exceptions and contemplates that future administrative regulations may define additional categories of bona fide occupational requirements permitting exceptions of this Act. Notably, the Act specifically incorporates BFOQ definitions from either the state or federal Departments of Labor.

To review the entire Bill visit: http://www.ilga.gov/legislation/fulltext.asp?DocName=09600HB4658sam001&GA=96&SessionId=76&DocTypeId=HB&LegID=48740&DocNum=4658&GAID=10&Session=

This information is being provided to you for informational purposes only. It should not in any way be considered legal advice. Please consult with your legal department for all matters concerning employment and labor decisions.