Effective January 1, 2011, a new Illinois law makes it unlawful for employers to discriminate on the basis of an employee’s credit history. The Employee Credit Privacy Act (Act) prohibits employers from failing or refusing to hire, or discharge or otherwise discriminate against a person because of his or her credit history or report; from inquiring about a job applicant’s or employee’s credit history and from obtaining a job applicant’s or employee’s credit report.

However, there are certain categories of jobs for which a satisfactory credit history is deemed as a job requirement and are therefore exempt from the Act. In other words, it is necessary for some jobs that the employee has a decent credit history. Examples include jobs involving access to personal or confidential information, financial information, trade secrets, or State or national security information. There are also jobs in which an employee’s or applicant’s credit history is otherwise required by federal or State law or pursuant to certain administrative rules.

In addition, for the purposes of the Act, the term “employer” does not apply to every type of employer. Some employers that are exempt from this new law include banks and other financial institutions; insurance or surety businesses; state law enforcement units; certain government agencies which require the use of employee’s or applicant’s credit history or credit report; or any organization defined as a debt collector under federal or state law.

Employers cannot require an employee to waive any rights under the Act and any agreement by an employee to do so is invalid. Employers who violate this new law are subject to civil law suits in which both monetary damages and injunctive relief may be requested. Since there are vast and very detailed exceptions to this new law, employers should consult an attorney to determine whether they are covered by the Act and whether a satisfactory credit history is an occupational requirement of the job positions in their businesses. Doing so may help avoid unintentional violations of this new Act.

The issue of discrimination based on employee’s credit history should be discussed with an attorney. This article is intended to present general information for educational purposes, is not legal advice and should not be relied upon in connection with any particular matter. The reader is advised to immediately retain their own separate legal counsel with respect to any specific legal issue. Rights to bring a claim will expire through the passage of time by the applicable statute of limitations.