Employment Fairness Act for Returning Citizens in Prince George’s County, MD
The Prince George's Employment Fairness Act for Returning Citizens is a new law in Prince George's County, Maryland, designed to provide fair...
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Some states and cities have introduced and passed bills to place restrictions on using credit checks for employment purposes. Generally, these laws restrict when or how employers use credit history for most employment decisions. These laws could have an impact on the way you conduct background screening. They could also require a cautious approach as to when credit information may be considered.
We’ve covered laws that restrict the use of credit history for employment purposes in Rhode Island, Philadelphia, and New York City. So how does Vermont restrict the use of credit information in the hiring process? Let’s look at what Vermont’s credit report law has to say.
Vermont defines credit information as more than just reports from credit bureaus. In fact, the state restricts use on two types of data.
1. Credit report
Vermont state law defines a credit report as: “Any written, oral, or other communication of any information by a credit reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living, including an investigative credit report.”
But Vermont also specifies what a credit report is not. A credit report is not:
2. Credit history
Vermont defines credit history as details that go beyond a credit report. Credit history includes information collected from a third party, whether or not in a credit report, that reflects on an individual’s prior or current:
With some exceptions, employers in Vermont can’t:
There are some exceptions to this. Employers are exempt from the credit report and credit history restrictions if:
So you meet one of the criteria? Great! Keep in mind that even with an applicable reason, employers can’t use credit history or credit reports as the sole factor for decisions regarding employment, compensation, or a term, condition or privilege of employment.
Employers that may get credit reports or credit history may still want to proceed cautiously. The state places additional restrictions on employers when obtaining credit reports or credit history. In Vermont, employers seeking credit reports or credit history must get written consent from the candidate each time. Employers must also disclose, in writing, the reason the employer is accessing the information. In addition to the written disclosure, the employer must:
Verified Credentials provides clients with state-specific sample disclosure documents in their Resource Library. The library includes a sample Vermont Credit Report Disclosure. If you’d like to see a sample to reference as you create your own document, log into your Resource Library.
If you hire in the state of Vermont, you may want to work with your trusted legal counsel to understand how this law applies to you. Beyond Vermont, laws may vary from state to state, and city to city. Employers nationwide should be mindful of the varying requirements and bans related to credit checks.
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