Massachusetts legislators intend to pass legislation prohibiting employers from using credit reports for employment. As such, the Massachusetts House of Representatives recently passed a bill to amend the state’s consumer protection law. The bill is called “An Act Reducing Barriers to Employment Through Credit Discrimination” (H.1434) and will soon undergo review by the Senate. 

If passed into law, H.1434 would address employers’ requests for and acquired reports from consumer reporting agencies. In most cases, it would bar employers from obtaining a report with any bearing on an individual’s “credit worthiness, credit standing or credit capacity.” H.1434 includes background check providers and credit bureaus as consumer reporting agencies. In addition, employers cannot ask applicants or employees any questions about a report’s contents that could involve the above characteristics.

1. 1434 would also bar employers from using credit information for “employment purposes.” This ban includes considering applicants for employment and determining an individual’s suitability for retention, reassignment, or promotion. State law would consider violating these regulations as an unfair trade practice. As such, aggrieved individuals could qualify to recover attorney’s fees, costs, and double damages due to a willful or knowing violation.

The bill also provides some limited carve-outs for certain employers. For example, an employer may request and use a credit report for employment purposes after meeting either of the following conditions:

• Federal or state law, regulation, or the rules of a self-regulatory organization (as defined in 15 U.S.C. 78c(a)(26)) requires an individual to use a consumer report for employment purposes; or
• The position held or applied for by the employee or applicant requires national security clearance.

H.1434 also contains an anti-discrimination provision. This section bars employers from taking adverse action against a person. The bill specified protections for those who have or intend to:

• File a complaint against a violation of the new regulations;
• Testify, assist, give evidence, or participate in an investigation of a violation; or
• Otherwise, oppose a violation of the regulations.

Should the state Senate and governor approve and sign it, H. 1434 may take effect as early as January 1, 2025. The legislation would become the most restrictive provision in the U.S. for credit reports concerning employment purposes. Employers should note that the regulations still allow them to use consumer reports. It applies only to “true credit reports.” For example, the bill does not prevent them from running criminal background checks or motor vehicle record searches.

 Disclaimer:

Information provided here is for educational and informational purposes only and should not constitute as legal advice. We recommend you contact your own legal counsel for any questions regarding your specific practices and compliance with applicable laws.

Source

The post H.1434 Bill Banning Credit Checks Passes Massachusetts House appeared first on JDP.

Background Check

When people say background check they’re generally referring to basic information about a person’s past such as anything available in public records. This includes past addresses, criminal offenses, and personal identification like date of birth and SSN. But there’s a difference between background checks and verifications.

Verifications could mean employment verification or education verification whereas the term background check covers a broader spectrum. Depending on the requested information for a candidate, a background check could include verifications, such as highest academic degree or certification and past employers. The information included in a background check will depend on whether it’s relevant to the request. For example, an employment background check could include:

• Criminal record checks
• Driving record checks
• Drug testing
• Employment history verification
• Reference checks

These record checks and verifications will differ for tenant screening and volunteer background checks where certain information becomes more relevant than others.

Investigative Background Check

An investigative background check is more intensive than a basic screening. Instead of checking information in databases, this type of verification could include interviews with neighbors, co-workers, family, and friends. They uncover the candidate’s personal character and reputation in addition to finding and analyzing his or her public records. These reports usually don’t include credit history because the FCRA distinguishes reports on personal character from credit reports.

Credit Check

A consumer credit report will include a candidate’s debt levels and repayment history. This information already exists for most individuals and is maintained by credit bureaus. According to federal law, anyone can request this information about themselves once a year. A consumer credit report is relevant for people who want to buy a house or take out a significant loan.

In order to get the best results if you’re conducting a background check on a candidate, you need to know what you’re looking for and what information is relevant. If you have any questions regarding background checks and verifications, feel free to contact us!

The post What Are The Different Types Of Background Checks? appeared first on JDP.