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New Illinois Credit Check Law


Posted by Tamara

A new law limits the use of credit checks in hiring in Illinois. The Employee Privacy Act which goes into effect on January 1, 2011 prohibits many employers from using credit checks in making employment decisions such as hiring.

However, the new law contains a number of exceptions. Employers in the banking industry, those in the insurance industry, state law enforcement agencies and debt collection agencies can all use credit information in hiring. In addition, any state or local government agency that requires a credit report can use this information.

Many exempt managers and employees will also be excluded from this law. Any business can ignore  the new law if it can establish that creditworthiness is a bona fide job qualification. To do so, however, the employer must meet one of these conditions:

The job involves unsupervised access to a safe, or cash, or goods worth at least $2,500

A managerial job involves setting the direction or control of the business

The employee will have the ability to sign for business assets of at least $100 per transaction

The employee would have access to confidential information such as national security information, financial information or trade secrets

The job requires bonding, or a credit check under state or federal law, or a professional license requires a credit check

Other jobs may also be exceptions if the U.S. Department of Labor or the Illinois Department of Labor has determined that creditworthiness is a bona fide job qualification.

Employers can still do a background check, but cannot obtain a credit report unless the employee meets the criteria above. However, if the law does permit a credit check, no specific disclosure is required by the employer that one will be done.

The law was passed by the Illinois house and signed into law by Governor Pat Quinn on August 10, 2010.

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