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By: David B. Pogrund

Effective January 1, 2011 the State of Illinois prohibits employers from basing employment decisions on a person's credit report; unless, an applicant or employee's credit history is a bona fide occupational requirement of a particular position or employee group.

To be specific, this new legislation prohibits employers from:

  1. basing recruiting, hiring, discharge or compensation decisions on a credit history or report;
  2. inquiring into an applicant's or employee's credit history; and
  3. ordering or obtaining an applicant's or employee's credit report from a consumer report agency.

The only exception to this prohibition is what is known as the "bona fide occupational requirement" and at least one of the following must exist to qualify:

  1. State or federal law requires bonding or other security covering an individual holding the position;
  2. The duties of the position involve custody, of, or unsupervised access to, assets valued at $2,500.00 or more;
  3. The duties of the position involve signatory power over business assets of $100 or more per transaction;
  4. The position is a managerial position which involves setting the direction or control of the business;
  5. The position involves access to personal or confidential information, financial information, trade secrets or state/national security information;
  6. The position meets criteria in administrative rules promulgated by the U.S. Department of Labor or state created to establish credit history as an occupational requirement; or
  7. An applicant or employee's credit history is otherwise required by or exempt under federal or state law.

It is incumbent upon you and your business entity to review all current hiring, compensation and staff management practices, including your employee handbook, to make certain that only lawful use of your employee's credit reports occur.


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