Connecticut to Restrict Credit Report Use in Hiring

Effective October 1, 2011, a new law in Connecticut – S.B. 361, signed by Governor Dannel Malloy, will prohibit certain employers from using credit reports in making hiring and employment decisions regarding existing employees or job applicants.

The law applies to all employers in Connecticut with at least one employee. Connecticut is one of six U.S. states – joining Hawaii, Illinois, Maryland, Oregon, and Washington – that currently prohibit the use of credit history in employment decisions.

S.B. 361 bans almost all employers from requiring job applicants or current employees to consent to a request for a credit report as a condition of employment.  Exceptions to the statute are: employers that are financial institutions as defined under law; credit reports required to be obtained by employers by law; and credit reports “substantially related to the employee’s current or potential job.” These “substantially related” reports are allowable if the position:

  • Is a managerial position that involves setting the direction or control of a business, division, unit or an agency of a business;
  • Involves access to personal or financial information of customers, employees or the employer, other than information customarily provided in a retail transaction;
  • Involves a fiduciary responsibility to the employer, as defined under the law;
  • Provides an expense account or corporate debit or credit card;
  • Provides access to certain confidential or proprietary business information, as defined under the law; or

Involves access to the employer’s nonfinancial assets valued at $2,005 or more, including, but not limited to, museum and library collections and to prescription drugs and other pharmaceuticals.