Snake Eyes: Nevada Law Restricts Employment Credit Reports

Nick Fishman

Employment Background Checks in Nevada

And the hits keep coming . . .

On May 25, 2013 Nevada Governor Brian Sandoval signed into law Senate Bill 127 which prohibits employers from using information found on credit reports to make a hiring decision.

This is not an all-out ban for employers

The law which will go into effect on October 1, 2013 includes exemptions under which credit can be used in the employment background screening process:

  • 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.

Their definition of job relatedness is as follows:

  • responsibility for financial assets or employment with a financial institution;
  • access to confidential information;
  • managerial or supervisory responsibility;
  • direct exercise of law enforcement authority;
  • responsibility for or access to another person’s financial information; and
  • employment with a licensed gaming establishment.

The last bullet point is especially important to take note of since a significant portion of the state’s employment opportunities are in the casino and gaming industry.

If you ask me, this is a common sense bill that allows those who really need to consider credit reports in their hiring process to continue doing so while prohibiting those who really shouldn’t have been considering it in the first place from continuing the practice.  I also think that this type of state legislation should give the Equal Employment Opportunity Commission pause in their quest to develop federal guidelines around this issue.  The states are clearly addressing this in a balanced fashion and are taking into account all parties involved before making decisions.

Nevada is the 10th state to enact such legislation, joining California, Connecticut, Colorado, Washington, Hawaii, Oregon, Illinois, Maryland and Vermont.

Nick Fishman
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Nick Fishman

Nick Fishman is the co-founder of EmployeeScreenIQ, a leading, global employment background screening provider, and serves as the company’s executive vice president and chief marketing officer. He pioneered the creation of EmployeeScreen University, the #1 educational resource on employment background checks for human resources, security and risk management professionals. A recognized industry expert, Nick is a frequent author, presenter and contributor to the news media. Nick is also a licensed private investigator in the states of Ohio and Texas.
Nick Fishman
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