In my last article, Know Employment Credit Check Limitations Per State, I provided information on some of the states that prohibit credit checks for employment purposes unless certain exceptions apply. There are additional states with similar laws, and here is the information on some of the remaining states.

Nevada will only allow employment credit checks under a few circumstances:

• It is required by federal or state law.

• The employer “reasonably believes” that an employee’s action may have violated a state or federal law.

• The check is reasonably related to the position. The state further defines what is reasonable to:

• Positions responsible for, money, financial accounts, corporate credit or debit cards, or other assets.

• Positions that provide access to confidential information including trade secrets.

• Manger and supervisor positions.

•  “The direct exercise of law enforcement authority as an employee of a state or local law enforcement agency.”

• Positions with access to the personal information of other people.

• Positions with access to the personal financial information of others.

• Financial institutions chartered under state or federal law, including a subsidiaries or affiliates.

• Employment with a licensed gaming establishment, as defined in NRS 463.0169.

Oregon limits the use of credit checks for employment decisions to the following circumstances:

•  The employer is a federally insured financial institution.

• It is required by federal or state law.

• Public Safety Officer who is or will be:

•  A member of a law enforcement unit;

• Employed as a peace officer commissioned by a city, port, school district, mass transit district, county, university under ORS 352.121 or 353.125, Indian reservation, the Superintendent of State Police under ORS 181A.340, the Criminal Justice Division of the Department of Justice, the Oregon State Lottery Commission or the Governor or employed as a regulatory specialist by the Oregon Liquor Control Commission; and

• Responsible for enforcing the criminal laws of this state or laws or ordinances related to airport security.

• The check is “substantially” related to the job, and the employer discloses to the employee, in writing, their reasons for using the credit check information.

Vermont also limits the circumstances under which employers can use credit checks for when:

• It is required by state or federal law.

• The position provides access to confidential financial information.

• The employee will work for a financial institution or credit union as defined by applicable state law.

• Law enforcement officers, emergency medical personnel, or firefighters as the positions are defined by applicable state law.

• Positions of fiduciary responsibility to the employer or clients.

• Specific positions for which the employer can show that the information is valid and reliable in predicting employee performance.

• Positions that have access to payroll information for the company.

Employers are not allowed to use the credit report as the only reason for the employment decision. They must also provide, in writing, the reason for requesting the credit report, and the reasons, if any, for taking adverse action based on the report.

The law also specifies how the report is to be handled once it is obtained.

The District of Columbia (DC) prohibits employers from using credit checks in employment decisions. The only exceptions are:

• If required by DC law.

• For specified law enforcement positions.

• If the information must be provided to the Office of the Chief Financial Officer of DC

• In cases where the employee is required to have security clearance under DC law (unless Federal law preempts this)

• DC Government employees who must give disclosures to the Board of Ethics and Government

• Accountability, or to the Office of the Inspector General.

• Employees who will have access to personal financial information.

• As required by court order or for law enforcement investigations.

There are a few more states with restrictions so stay tuned for the next article – part 3.

Additional ASE Resources

ASE Background Checking – ASE’s full background screening service can take the burden off of HR.  Our system integrates with most ATS systems and we have updated, competitive pricing.  Contact Susan Chance to discuss your background screening needs or get a quote.

CCH HRAnswersNow – ASE members have access to CCH, a compliance database with a state employment law section that includes all 50 states.  ASE members can access CCH via the ASE Member Dashboard.

Sources: leg.state.nv.us, oregonlegislature.gov, legislature.vermont.gov, ohr.dc.gov