Connecticut recently enacted a law that will limit an employer’s ability to request that an employee or prospective employee provide consent to request a credit report. The following are the only instances in which it is permissible for an employer to request an employee’s credit report: 

· the employer is a financial institution (as defined by the statute);

· the employee’s credit report is required by law;

· the employer believes the employee has engaged in specific activity that constitutes a violation of the law related to the employee’s employment; and

· a credit report is substantially related to the employee’s current or potential job or the employer has a bona fide purpose for requesting a credit report that is substantially job-related and is disclosed in writing to the employee or applicant.

The new law defines the term “substantially related to the employee’s current or potential job” as meaning that the information contained in the credit report is related to the current or potential position because the position (a) is managerial and involves setting the direction or control of a business unit, (b) involves access to customers’, employees’ or employers’ personal or financial information, (c) involves a fiduciary responsibility to the employer such as authority to issue payments or collect debts, (d) provides an expense account or corporate debit/credit card, (e) provides access to confidential or proprietary business information or information including a formula, pattern, compilation, program, device, method, technique, process or trade secret, or (f) involves access to the employer’s nonfinancial assets valued at $2,500 or more.

Employers should review the numerous exceptions to the rule to determine whether the limitation applies to them and should revise their policies and practices accordingly. The law applies to all employers, and will become effective on October 1, 2011.