Under the Act, aggrieved employees and applicants are permitted to bring a private lawsuit in state court seeking injunctive relief, damages, costs, and attorneys' fees.

Employers in industries dealing with banking and other financial institutions, insurance, trade secrets, debt collection, or state and national security are exempt from the Act.

Also, under limited circumstances, employers will be able to access credit checks for certain positions, so long as they can establish that credit worthiness is a bona fide job qualification. Specifically, employers must establish at least one of the following:

The position involves unsupervised access to more than $2,500;

The position involves signatory authority over more than $100 per transaction;

The position is managerial and involves setting the direction or control of the business;

The position includes access to protected information, including information of personal or confidential nature, financial information, trade secrets, or state or national security information;

The state or federal Department of Labor has promulgated criteria establishing that credit worthiness is a bona fide job qualification; or

State or federal law requires the employer to verify an employee's credit history.

It is important to note that, so long as the report does not contain credit information, the Act does not restrict employers from obtaining a background report or investigatory report from a consumer reporting agency, as allowed by the Fair Credit Reporting Act.

Illinois is not alone in prohibiting the use of credit checks to screen job applicants. Oregon passed a similar law that went into effect on July 1, 2010.

This legislation speaks directly to the recent scrutiny of employers' use of credit checks. In fact, on March 9, the Equal Employment Opportunity Commission ("EEOC"), issued an Informal Discussion Letter in response to requests that it urge legislation to prohibit the use of credit checks to screen job applications. The EEOC noted that while none of the laws it is charged to enforce directly prohibit discrimination based on credit information, they may be implicated in some circumstances. In particular, the EEOC noted that "Title VII prohibits an employment practice that disproportionately screens out racial minorities, women, or another protected group unless the practice is job related and consistent with business necessity. Thus, if an employer's use of credit information disproportionately excludes African-American and Hispanic candidates, the practice would be unlawful unless the employer could establish that the practice is needed for it to operate safely or efficiently." You may find the Informal Discussion Letter at:

http://www.eeoc.gov/eeoc/foia/letters/2010/titlevii-employer-creditck.html

Therefore, even if your business is in a state that has not yet enacted a credit check privacy law, to avoid potential disparate impact claims, it is a prudent business practice to only use credit checks as a screening tool for positions where credit worthiness is a bona fide job qualification. To learn about other job screening best practices, please visit the EEOC's Fact Sheet on Employment Tests and Selection Procedures:

http://www.eeoc.gov/policy/docs/factemployment_procedures.html

For questions and further guidance regarding the use of credit checks in job screening, please contact Anne-Marie Vercruysse Welch, awelch@clarkhill.com, 313.965.8571, Hannah L. Kaplan, hkaplan@clarkhill.com, 312.985.5919, or your Clark Hill Labor and Employment Law attorney.

To find out more about Clark Hill and our Labor and Employment Practice Group, visit clarkhill.com or call 800.949.3124