Illinois recently enacted the Employee Credit Privacy Act (the “IECPA” or the “Act”). For a comprehensive analysis of the IECPA’s scope of coverage, exemptions, and potential areas of exposure for Illinois employers, please read our full article recently published (pdf) in Bloomberg Law Reports®.
The Act will prohibit most Illinois employers from basing employment decisions or benefits on an applicant’s or employee’s personal credit information, unless either the employer or the individual comes within any of several broad exceptions. The core provision of the IECPA is a prohibition on taking employment actions “because of the individual’s credit history or credit report.” The IECPA broadly defines “credit history” as “an individual’s past borrowing and repaying behavior, including paying bills on time and managing debt and other financial obligations,” and it defines “credit report” as “any written or other communication of any information by a consumer reporting agency that bears on a consumer’s creditworthiness, credit standing, credit capacity, or credit history."
The IECPA applies to all Illinois employers, regardless of size, but it does have a number of broad exceptions. First, it exempts entities engaged in banking, insurance, and debt collection, as well as state law enforcement agencies and state and local governmental agencies. Second, the IECPA does not prohibit an employer from making an employment decision based on credit history or a credit report “if a satisfactory credit history is an established bona fide occupational requirement of a particular position."
Because the IECPA will not go in to effect until January 1, 2011, now is the time for Illinois employers to determine the law’s application to them and to ensure that they will be in compliance come New Year’s Day.