Sixteen states, including Illinois, are considering legislation that will ban or limit pre-employment credit checks. In Illinois, House Bill 4658, introduced by state Rep. Jack Franks, D-Woodstock, will seek to limit pre-employment credit checks of potential employees by employers. The bill is a revised version of House Bill 4855, which was tabled Feb. 26 and sought to prohibit pre-employment credit checks in all sectors.
Franks said he filed the bill because of the deepening economic crisis in Illinois.
If passed, House Bill 4658 would create the Employee Credit Privacy Act, which will prohibit employers from using an employee's or potential employee's credit history to determine employment, recruitment, discharge or compensation. There some exceptions to the bill, which would allow pre-employment credit checks for bona fide occupational requirements.
A bona fide occupational requirement as outlined by the bill is: If state or federal law requires bonding of an individual holding the position, if duties include access to $1,000 in cash or assets, if job duties include signatory power of business assets of $100 or more per transaction and if the position meets the Department of Labor's criteria that credit history is a bona fide occupational requirement.
The Illinois bill is similar to laws in Hawaii and Washington, which limit pre-employment credit checks to people seeking employment in the financial sector.
Franks said the bill seeks to address unfair hiring practices in today's tough job market. He said, without the measure, if two good job candidates apply for the same job, the employer will most likely hire the applicant who has better credit. He added that victims of identity theft who have had their credit ruined often find it difficult to gain employment if they're subject to a pre-employment credit check.
Franks doesn't believe bad credit is necessarily a sign of financial irresponsibility. He said with unemployment at 11 percent in Illinois, 20 percent of homeowners owe more on their home than it is worth; people are defaulting on loans, losing their health care; and go further into debt if they have an illness. All of these are factors Franks said he believes perpetuates the cycle of bad credit leading to not being able to gain employment.
"It's not fair at this point," Franks said. "We need to give people a chance."
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State Rep. Mike Bost, R-Murphysboro, speaking on House Bill 4855, said he believes the practice of pre-employment credit checks does not constitute discrimination and, in some cases, is necessary. He said he thinks checking credit history for potential employees who may work as bank tellers or handle sensitive materials is necessary because potential employees who have a large debt pose a higher risk to employers.
Bost said it makes sense to continue the practice of checking the credit history of potential employees in the financial sector.
"Some businesses need protection," Bost said.
Rosie Robinson, a business services administrator at Man-Tra-Con, said her company does not typically perform credit checks on potential employees. She said Man-Tra-Con does counsel job seekers on the implications of credit and employment.
Robinson said she understands the need for pre-employment credit checks for potential employees in the financial sector, but she doesn't think the checks are necessary for jobs in other sectors. She said she is in support of limiting pre-employment credit checks because she understands job seekers may face life situations, such as medical hardship, that could affect their credit and that hiring a person based on that rating doesn't speak to their job performance ability.
"It isn't a valid indication of what a person can do," Robinson said.