Nevada Becomes Tenth State to Prohibit Use of Credit Reports by Employers for Employment Purposes

With Governor Brian Sandoval signing Senate Bill 127 (SB 127) into law, Nevada has now become the tenth state in the U.S. to prohibit employers from conditioning employment on a consumer credit report or other credit information with few exceptions. The full text of Nevada SB 127 – which goes into effect on October 1, 2013 – is available at: http://openstates.org/nv/bills/77/SB127/.

Senate Bill 127 amends Chapter 613 of the Nevada Revised Statutes (NRS) that covers “Employment Practices” to make it unlawful for any employer in the state to:

  • Directly or indirectly, require, request, suggest or cause any employee or prospective employee to submit a consumer credit report or other credit information as a condition of employment;
  • Use, accept, refer to or inquire concerning a consumer credit report or other credit information;
  • Discharge, discipline, discriminate against in any manner or deny employment or promotion to, or threaten to take any such action against any employee or prospective employee: (a) who refuses, declines or fails to submit a consumer credit report or other credit information; or (b) on the basis of the results of a consumer credit report or other credit information; or
  • Discharge, discipline, discriminate against in any manner or deny employment or promotion to, or threaten to take any such action against any employee or prospective employee who has pursuant to the new law: (a) filed any complaint or instituted or caused to be instituted any legal proceeding; (b) testified or may testify in any legal proceeding instituted; or (c) exercised his or her rights, or has exercised on behalf of another person the rights afforded to him or her.

However, Senate Bill 127 does provide for exceptions where an employer may request or consider a consumer credit report or other credit information for employment purposes if:

  • The employer is required or authorized, pursuant to state or federal law, to use a consumer credit report or other credit information for that purpose;
  • The employer reasonably believes that the employee or prospective employee has engaged in specific activity which may constitute a violation of state or federal law; or
  • The information contained in the consumer credit report or other credit information is “job related” or reasonably related to the position for which the employee or prospective employee is being evaluated for employment, promotion, reassignment or retention as an employee.

If an employer violates the new law, the Labor Commissioner may impose an administrative penalty against the employer of not more than $9,000 for each violation. Employers who violate the law are also liable for any legal and equitable relief to the employee or prospective employee affected by the violation. This relief may include employment of the prospective employee, reinstatement or promotion of an employee, and the payment of lost wages and benefits. Both the private and public rights of recovery have a three-year statute of limitations under the law.

Nevada becomes the tenth U.S. state – along with California, Colorado, 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.

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

Sources:

http://openstates.org/nv/bills/77/SB127/

http://www.lexology.com/library/detail.aspx?g=406f265c-b4dc-4da1-a200-40775cbc68cd

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/.