Illinois Becomes the Second State to Enact Broader Regulations on AI
Illinois Governor J.B. Pritzker signed House Bill 3773 into law on August 9, 2024, expanding the state’s regulations on the use of artificial...
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Verified Credentials Jun 27, 2024 12:00:00 AM
Restrictions on access to records used for employment purposes that could unfairly sway hiring decisions remain a priority as local governments try to find more ways to protect employee rights and promote equality. On March 14, 2024, the Massachusetts House of Representatives passed a bill to ban credit checks as part of the employment process. This bill is currently awaiting the governor's signature and will significantly impact employer hiring practices throughout the state. We previously covered similar state-enforced restrictions on using credit reports and history in Rhode Island, Philadelphia, New York, California, and Vermont.
If passed by Governor Healey, this legislation would prohibit employers from obtaining or using credit reports for employment purposes. We will cover a few key restrictions and exceptions employers may want to consider when making employment decisions.
The new legislation, Bill H.1434, would amend Title XV, Chapter 93 of the Massachusetts Annotated Laws to introduce a few key restrictions on using consumer credit reports for hiring purposes, including:
While this bill uses the term consumer report, the definition of a consumer report under the law is limited to information bearing on a consumer’s creditworthiness, credit standing, or credit capacity. This new law would not prohibit employers from obtaining other information from consumer reporting agencies.
The amendment is awaiting Governor Maura Healey's signature. If passed, it will go into effect on January 1, 2025. See the full text of the bill here.
Despite some broad restrictions that apply to most employers hiring in Massachusetts, the law would still provide a few exceptions to the law for specific roles:
The legislation also includes protections against retaliation and discrimination, which are important for employers to take note of. Employers cannot take adverse actions against applicants or employees for:
This proposed law is part of a nationwide movement toward fair and equitable hiring practices, specifically to protect individuals from discrimination based on their credit history. As employment law evolves rapidly, staying current on regulations and forms for employment ensures compliance and promotes fair hiring practices.
The new ban on using credit checks for employment purposes is one of many, and it could signal more future legislation in other states. It may also affect employers hiring remote employees in Massachusetts. Employers need to remain aware of these changes as Chapter 93A develops and to periodically consult their legal counsel to avoid the repercussions of unintentionally violating updated employment protections. To track updates on the progress of this law, take a closer look here.
Illinois Governor J.B. Pritzker signed House Bill 3773 into law on August 9, 2024, expanding the state’s regulations on the use of artificial...
Montana has joined the growing list of consumer data privacy laws enacted throughout the country, creating new guidelines for consumer data privacy. ...
Signed into law on September 12, 2024, New Jersey enacted a new background check bill that mandates criminal history background checks for a broader...
Consumer and data privacy laws have been popping up everywhere lately. Soon, nearly half the nation will have active consumer privacy data laws. It...
The Alaska Legislature has approved Senate Bill 196 and is awaiting Governor Mike Dunleavy's signature. The Governor will need to sign the bill by...
On May 16, 2024, the Illinois legislature approved Senate Bill 2933. The bill is an amendment to the Illinois Consumer Fraud and Deceptive Business...