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Illinois Joins States Narrowing Credit Checks by Employers

  • August 12, 2010

Illinois employers will have a tougher time conducting credit checks on applicants and employees and using the information for employment purposes beginning January 1, 2011.   The state’s new Employee Privacy Act (House Bill 4658), signed by Governor Pat Quinn on August 10, 2010, prohibits all but a handful of employers from:

  1. inquiring into an applicant’s or an employee’s credit history;
  2. ordering a credit report on an applicant or employee from a consumer reporting agency; or
  3. taking any adverse employment action (such as refusing to hire) because of the individual’s credit history or credit report.

An aggrieved individual can bring a private cause of action in state court to enforce the Act and can seek injunctive relief and damages as well as costs and attorneys’ fees.



Employers in the following industries are specifically exempted from the Act’s coverage:

  • banks and other financial institutions;
  • businesses engaged in insurance;
  • state law enforcement agencies;
  • state and local government agencies that require credit reports; and
  • qualified debt collection agencies.

Also, any business can conduct a credit check on an applicant or employee if it can establish credit worthiness is a bona fide job qualification. The employer must establish at least one of the following:

  • The position involves unsupervised access to cash or goods with a value of at least $2,500;
  • The position involves the power to sign for business assets of at least $100 per transaction;
  • The position is a managerial position that involves setting the direction or control of the business;
  • The position includes access to protected information, such as personal or confidential information, financial information, trade secrets or State or national security information;
  • The United States Department of Labor or the Illinois Department of Labor has promulgated criteria establishing that credit worthiness is a bona fide job qualification; or
  • State or federal law requires the individual’s credit history or that the individual be bonded or otherwise secured to hold the position.

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The Act restricts only access to credit information. It does not prevent an employer from obtaining a background report or investigatory report from a consumer reporting agency, as allowed under the Fair Credit Reporting Act, as long as the report obtained does not include credit information.   Further, if an employer is permitted to obtain credit information, no specific disclosures are required on any type of consent form.

For more information regarding legal issues with employer credit checks, see our article, New Oregon Credit Check Law Warrants Nationwide Review of Employer Practices.

Jackson Lewis attorneys are available to answer inquiries regarding this and other workplace developments.

©2010 Jackson Lewis P.C. This material is provided for informational purposes only. It is not intended to constitute legal advice nor does it create a client-lawyer relationship between Jackson Lewis and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material. This material may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome.

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