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.
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About Employment Screening Resources® (ESR):
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