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D.C. Council Passes Ban on Credit History Screens on Job Applicants, Interns, Employees

The Washington D.C. Council unanimously passed the “Fair Credit in Employment Amendment Act” (Bill 21-244) to amend the Human Rights Act of 1977 and prevent employers from taking discriminatory action against applicants, interns and employees based on the individual’s “credit information.”

The Fair Credit law prohibits most employers from requiring an applicant, intern, or employee to submit credit information as part of the hiring process or during the individual’s employment with the employer. It also prohibits most employers from using, referring to, or inquiring into an applicant, intern, or employee’s credit information. This law does not apply to federal jobs, D.C. police, special police, campus police, or financial institutions where the job involves access to personal financial information, or otherwise required by D.C. law or pursuant to lawfully issued subpoena.

The Fair Credit law is similar to D.C.’s 2014 “Ban the Box” law prohibiting employers from asking applicants about their criminal history before making a conditional offer of employment. (See our article, District of Columbia Enacts Ban-the-Box Legislation Limiting Employers' Criminal Background Inquiries on Applicants.) However, unlike D.C.’s “Ban the Box” law, where employers can check for criminal convictions after the conditional offer is made and rescind an offer under certain circumstances, the D.C. Council concluded that credit history is rarely, if ever, relevant to the hiring process. Therefore, the Fair Credit law bans most employers from inquiring into or using an applicant or employee’s credit history at any point during the hiring process.

The purpose of the Fair Credit legislation is to protect District residents from being disqualified from potential employment opportunities because of irrelevant, inaccurate, or misleading credit information. Poor or inaccurate credit ratings have disproportionately affected minorities, women, and low-wage workers from finding employment, according to some research.

Under the law, individuals can report violations to the D.C.’s Office of Human Rights, which will investigate any charges filed. Fines can be issued if violations are found:

  • $1,000 for the first offense,

  • $2,500 for the second offense, and

  • $5,000 for each offense thereafter.

The law is under review by Mayor Muriel Bowser. The Mayor has not indicated whether she supports the law and will sign the legislation, but the Fair Credit law would be veto-proof if the unanimous support of the D.C. Council holds. Once approved by Mayor Bowser (or approved by at least two-third vote of the D.C. Council should the Mayor veto the bill), the Act will be submitted to the U.S. Congress for a 30-day Congressional review. If after 30 days Congress fails to enact a joint resolution disapproving the D.C. Council’s law (which must be approved by the President), the Fair Credit Act would become law in D.C. This process could be complete as early as spring 2017.

D.C. employers should review their hiring and background check policies for the potential changes that may be needed if the Fair Credit law passes and takes effect.

Jackson Lewis P.C. © 2017

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About this Author

Matthew F. Nieman, Jackson Lewis, employment discrimination lawyer, tort contract claims attorney
Principal and Office Litigation Manager

Matthew F. Nieman is a Principal in the Washington, D.C. Region office of Jackson Lewis P.C. He also serves as the Litigation Manager for the office.

Mr. Nieman represents employers in a broad spectrum of labor and employment law matters, including discrimination, retaliation, wage and hour, whistleblower claims (including Dodd-Frank, the False Claims Act, and Sarbanes-Oxley), questions related to the Uniformed Services Employment and Re-employment Rights Act of 1994 (“USERRA”), and workplace drug-testing issues. He is ...

703-483-8331
Nickole C. Winnett, Jackson Lewis, Work disability lawyer, medical leave claims attorney
Principal

Nickole Winnett is a Principal in the Washington, D.C. Region office of Jackson Lewis P.C. and is a member of the Employment Litigation practice group and the Workplace Safety and Health practice group. Ms. Winnett is a contributing author on Jackson Lewis’ website, an editor of Jackson Lewis’ OSHA Law Blog, and is a frequent speaker on employment and workplace safety and health matters.

Ms. Winnett advises clients regarding all aspects of the employment relationship, and represents employers on litigation matters in state and federal courts related to discrimination, retaliation, disability, wage and hour, and medical leave claims. She routinely counsels employers on preventing and handling workplace violence matters and heads the Workplace Violence sub-practice group.

703-483-8313
Susan M. Corcoran, Jackson Lewis, fair credit reporting lawyer, Labor Policy Attorney
Principal

Susan M. Corcoran is a Principal in the White Plains, New York, office of Jackson Lewis, P.C. Ms. Corcoran is a seasoned employment counselor and litigator and is often thought of as the “go to” person on national workplace law issues for her clients.

She is one of the leaders of the firm’s Background Check Resource Group, and serves as a resource on fair credit reporting act issues, as well as “ban the box” strategies. She taught a graduate employment law class for many years at Manhattanville College and frequently speaks...

914-872-6871
Richard Greenberg, Jackson Lewis, workplace grievances lawyer, arbitrations litigation attorney
Principal

Richard Greenberg is a Principal in the New York City, New York, office of Jackson Lewis P.C. He advises both unionized and union-free clients on a full-range of labor and employee relations matters.

With respect to traditional labor matters, Mr. Greenberg represents clients in collective bargaining negotiations, labor disputes, grievances and arbitrations, proceedings before the National Labor Relations Board, and in state and federal court. Mr. Greenberg also advises clients on the legal aspects of remaining union-free....

212-545-4080