2/24/2012 Credit Report Restrictions Seem Likely in Colorado
February 24, 2012
The Colorado Senate Judiciary Committee approved Senate Bill 3 “The Employment Opportunity Act” which prohibits pre-employment credit checks that some companies use to determine hire eligibility. The bill is borne out of notion that people are being unfairly denied employment based on their credit when their financial well-being has nothing to do with the job they are seeking.
This bill’s sponsor, Senator Morgan Carroll (D) asserts that, “Credit scores were never intended to be used in hiring practices,” and goes on to say that, “Tying credit scores with employment opportunity creates a vicious circle that unfairly punishes struggling Coloradans. We should be doing everything in our power to get citizens back to work, and this legislation ensures that we are removing unnecessary punitive barriers and helping citizens get back on their feet.”
Note: The Senator holds a common misconception that employment credit reports contain a credit score.
The bill seeks to prohibit employers from evaluating a prospective employee’s credit information unless it is directly related to the position for which a candidate is applying, such as a money or asset management role.
This bill is now officially out of committee and will be presented to the full state senate for consideration.
If this passes state approval, Colorado will join the states of Washington, Hawaii, Oregon, Connecticut, Maryland, Illinois and California who each have similar laws.
Also, please note that we understand that the EEOC will be reviewing draft guidance on this issue over the coming weeks which could make any state actions a moot point.
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