Colorado Restricts Credit Reports from Employment Decisions

“Colorado is officially the ninth state to restrict an employer’s right to obtain and use credit information for making employment decisions.”Open Online

Credit cards

 

Attention Colorado employers: Starting July 1, 2013, you will no longer be able to obtain prospective employees’ credit reports and history for employment purposes. Governor Hickenlooper of Colorado signed this legislation into law in April. States that currently limit credit history reports for employers are California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and Washington. Colorado joins them as the ninth state to provide these regulations.

The Bell Policy Center claims that there is no correlation between job performance and credit information. “The law was necessary because employers increasingly were considering credit histories in making employment decisions.”

What specifically does this bill mean for employers?

–       Employers may only use credit information if it is “substantially related to the job”.

–       Employers must inform employees when using their credit information against them. (For example, stating it as a reason for not providing employment.)

–       Employees can file suit if they have been unfairly treated in association with their credit history.

–       The Department of Labor and Employment must enforce laws related to employer use of consumer credit info.

What do you think? Will this legislation help or hinder employers from making good hiring decisions? To learn more about our background check processes, visit www.true-hire.com.

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