Nevada Governor Brian Sandoval has signed legislation limiting employers’ access to employees’ and job applicants’ consumer credit report and related information. Under the measure (SB 127), effective October 1, 2013, employers in Nevada may not “suggest, request, require or cause” employees or applicants to submit a consumer credit report or other credit information as a condition of employment. Additionally, employers may not “use, accept, refer to or inquire” about a consumer credit report or other credit information.
The new state law prohibits employers from failing or refusing to hire applicants, or disciplining or otherwise penalizing employees, based upon on information contained in a credit report or for refusing to provide their credit report. In addition, a no-retaliation provision ensures employees may exercise their rights under this law without fear of reprisal.
Like many of the other states that have passed similar prohibitions, such as Colorado, the Nevada law provides specific exceptions. An employer may continue to require and rely upon credit reports and related information in making employment decisions in certain circumstances, for example, when:
- The employer is required or authorized, pursuant to state or federal law, to require or rely upon a credit report;
- The employer reasonably believes the employee has violated state or federal law; or
- The information in the credit report is reasonably related to the position.
Credit information is reasonably related to the job if the duties of the position involve:
- Handling money, financial accounts, corporate credit or debit cards or other assets;
- Access to trade secrets or confidential information;
- Managerial or supervisory responsibility;
- Law enforcement authority as an employee of a state or local law enforcement agency;
- Handling of or access to personal information of another person;
- Employment with a financial institution, chartered under state or federal law; or
- Employment with a licensed gaming establishment.
Nevada employers need to review their practices carefully as this law provides for a private right of action for alleged violations, where an individual can pursue equitable and legal remedies, including reasonable costs and attorney’s fees to the adversely affected employee or rejected job applicant. Separately, the state Labor Commissioner may investigate alleged violations, and impose an administrative penalty of up to $9,000 for each violation, as well as pursue civil action.