Colorado Employment Opportunity Act Specifies Permissible Use of Credit Reports by Employers Starting July 1

Governor of Colorado John Hickenlooper has signed into law a bill passed by the Colorado General Assembly – SB13-018, the “Employment Opportunity Act” – that specifies the purposes for which consumer credit information such as consumer credit reports and credit scores can be used by private sector employers or potential employers with four or more employees in making employment-related decisions. More information about the “Employment Opportunity Act”, which takes effect July 1, 2013, is available at http://www.coloradocapitolwatch.com/bill/0/SB13-018/2013/1/.

Sponsored by Jessie Ulibarri (Senate – D) and Randy Fischer (House – D), the “Employment Opportunity Act” specifically:

  • Prohibits an employer’s use of consumer credit information for employment purposes if the information is unrelated to the job;
  • Requires an employer to disclose to an employee or applicant for employment (jointly referred to as “employee”) when the employer uses the employee’s consumer credit information to take adverse action against him or her and the particular credit information upon which the employer relied;
  • Authorizes an employee aggrieved by a violation of the above provisions to bring suit for an injunction, damages, or both; and
  • Requires the department of labor and employment to enforce the laws related to employer use of consumer credit information.

The “Employment Opportunity Act” defines employment purposes broadly to include “evaluating a person for employment, hiring, promotion, demotion, reassignment, adjustment in compensation level, or retention as an employee.”  Two types of employers are permitted to use consumer credit information for employment purposes under the law: “banks or financial institutions” and employers “required by law” to conduct credit checks. The remaining employers may only review credit reports for “executive or management personnel” and positions that involve “contracts with defense, intelligence, national security, or space agencies of the federal government.”

Colorado becomes the ninth U.S. state – along with California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont, and Washington – to limit the use of credit reports by employers for employment purposes. For more information about U.S. states with laws regulating credit reports for employment, including summaries of the laws and links to the full text, visit http://www.esrcheck.com/States-with-Laws-Regulating-Credit-Reports-for-Employment.php.

Employment Screening Resources® (ESR) – ‘The Background Check Authority®’ – is a nationwide background screening provider accredited by The National Association of Professional Background Screeners (NAPBS®). For more information about background check solutions from ESR, please visit http://www.esrcheck.com or call Toll Free 888.999.4474.

Sources:

http://www.colorado.gov/cs/Satellite?c=Page&childpagename=GovHickenlooper%2FCBONLayout&cid=1251641764765&pagename=CBONWrapper

http://www.coloradocapitolwatch.com/bill/0/SB13-018/2013/1/

About Employment Screening Resources® (ESR):

Founded by safe hiring expert Attorney Les Rosen in 1997, Employment Screening Resources® (ESR) – ‘The Background Check Authority®’– provides accurate and actionable information that empowers employers to make informed hiring decisions for the benefit of their organizations, employees, and the public. CEO Rosen literally wrote the book on background checks with “The Safe Hiring Manual” and ESR is accredited by The National Association of Professional Background Screeners (NAPBS), a distinction held by a small percent of screening firms. Employers choosing ESR know they have selected an agency meeting the highest industry standards. To learn more about ESR, visit http://www.esrcheck.com or call toll free 888.999.4474.

About ESR News:

The Employment Screening Resources® (ESR) News blog – ESR News – provides employment screening information for employers, recruiters, and jobseekers on a variety of topics including credit reports, criminal records, data privacy, discrimination, E-Verify, jobs reports, legal updates, negligent hiring, workplace violence, and use of search engines and social network sites for background checks. For more information about ESR News or to send comments or questions, please email ESR News Editor Thomas Ahearn at tahearn@esrcheck.com. To subscribe to the ESR News Blog Feed, visit http://www.esrcheck.com/wordpress/feed/. To subscribe to the complimentary ESRcheck Report monthly newsletter, please visit http://www.esrcheck.com/Newsletter/.