This article will help you:
- Decide whether to request a pre-employment credit report based on location
- See which locations have requirements around permissible reasons for pre-employment credit requests
In recent years, it has become less common to request credit checks as a standard pre-employment process. A candidage's credit history has little bearing on most job positions, especially those that don't directly involve financial transactions. Barring candidates for non-financial job positions based on credit history can result in an unnecessarily small candidate pool, as well as potential violations of disparate impact under Title VII of the Civil Rights Act of 1964.
Many states and municipalities have created requirements for when a credit check can be performed for pre-employment purposes.
To help you decide when to run credit checks, we've compiled a list of location-specific permissible reasons for requesting pre-employment credit reports. This is not an exhaustive list, but it does provide several examples of permissible reasons.
Scroll to the bottom of this article to see it as a downloadable PDF.
California
| Reason | Description |
|---|---|
| Managerial position | A managerial position covered by the executive exemption set forth in subparagraph (1) of paragraph (A) of Section 1 of Wage Order 4 of the Industrial Welfare Commission |
| Department of Justice | A position in the state Department of Justice |
| Law enforcement | A sworn peace officer or other law enforcement |
| Required by law | A position for which the information contained in the report is required by law to be disclosed or obtained |
| Financial transactions for the company | A position which the person can enter into financial transactions on behalf of the company |
| Confidential/proprietary information | A position that involves access to confidential or proprietary information |
| Access to $10k cash | A position that involves regular access to $10,000 or more |
Colorado
| Reason | Description |
|---|---|
| Managerial position | A position that constitutes executive or management personnel or professional staff to executive or management personal and the position involves setting the direction or control of the company, a division, or a unit |
| Managerial position with fiduciary relationship | A position that constitutes executive or management personnel or professional staff to executive or management personal and the position involves a fiduciary relationship to the company |
| Managerial position with access to financial information | A position that constitutes executive or management personnel or professional staff to executive or management personal and the position involves access to personal or financial information other than information customarily provided in a retail transaction |
| Managerial position with authority to issue payments, collect debts, or enter contracts | A position that constitutes executive or management personnel or professional staff to executive or management personal and the position involves the authority to issue payments, collect debts, or enter into contracts |
| Federal contracts in defense or national security | A position that involves contracts with defense, intelligence, national security, or space agencies of the federal government |
| Financial institution/credit union | A position that is with a bank or financial institution |
| Required by law | A position that is required to have a credit report by law |
Connecticut
| Reason | Description |
|---|---|
| Managerial position | A position that is a managerial position which involves setting the direction or control of a business, division, unit or an agency of a business |
| Confidential/financial information | A position that involves access to customers', employees' or the employer's personal or financial information other than information customarily provided in a retail transaction |
| Fiduciary responsibility | A position that involves a fiduciary responsibility to the employer, including, but not limited to, the authority to issue payments, collect debts, transfer money or enter into contracts |
| Expense account/corporate credit card | A position that provides an expense account or corporate debit or credit card |
| Confidential and proprietary information | A position that provides access to (i) confidential or proprietary business information, or (ii) information, including a formula, pattern, compilation, program, device, method, technique, process or trade secret that: (I) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from the disclosure or use of the information; and (II) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy |
| Access to over $2,005 in non-financial assets | A position that involves access to the employer's nonfinancial assets valued at two thousand five dollars or more, including, but not limited to, museum and library collections and to prescription drugs and other pharmaceuticals |
District of Columbia
| Reason | Description |
|---|---|
| DC law | Where an employer is required by District of Columbia law to inquire into an employee's credit information |
| Law enforcement | A position as a police officer, as a special police office or campus police officer, or in a position with a law enforcement action |
| Office of the Chief Financial Officer of DC | Employees within the Office of the Chief Financial Officer of the District of Columbia |
| Security clearance | Where an employee is required to possess a security clearance under District of Columbia law |
| DC government disclosures | To disclosures by District of Columbia government employees of their credit information to the Board of Ethics and Government Accountability or the Office of the Inspector General, or to the use of such disclosures by agencies |
| Confidential/financial information | To financial institutions, where the position involves access to personal financial information |
| Court order/law enforcement investigation | Where an employer requests or receives credit information pursuant to lawful subpoena, court order or law enforcement investigation |
Hawaii
| Reason | Description |
|---|---|
| Bona fide qualification | Credit information directly relates to a bona fide occupational qualification |
| Permitted by law | The employer is expressly permitted/required to inquire into credit history for employment purposes by law |
| Financial institution/credit union | The employer is a financial institution in which deposits are insured by a financial agency having jurisdiction over the financial institution |
| Managerial position | A managerial position, for which the employee formulates and effectuates management policies by expressing and making operative decisions of the employer |
| Supervisory position with authority to make employment decisions | A supervisory position, for which the employee has the authority to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibility to direct them, or to adjust their grievances, or effectively to recommend such action, with independent discretion |
Illinois
| Reason | Description |
|---|---|
| Financial institution/credit union | The Company is a bank holding company, bank, savings and loan association, credit union, or trust company |
| Insurance/surety | The Company is engaged in insurance or surety |
| Law enforcement | A position with municipal law enforcement or investigation |
| Debt collection | A position with a debt collector, as defined under state or federal law |
| Bonding/security required by law | A position that requires bonding or security under state or federal law |
| Custody of assets $2,500 or more | The duties of the position include custody of assets valued at $2,5000 or more |
| Signatory power over $100 per transaction | The duties of the position include signatory power over assets of $100 or more per transaction |
| Managerial position | The position is a managerial position involving setting direction or control of the business |
| Confidential/financial/national security information | The position involves access to sensitive information, financial information, trade secrets, or state or national security information |
| Credit as bona fide qualification under law | A position for which federal or state law indicates that credit history is a bona fide occupational qualification |
| Required by law | A position for which credit history is required under the law |
Maryland
| Reason | Description |
|---|---|
| Managerial position | A position that is managerial and involves setting the direction or control of a business, or a department, division, unit, or agency of a business |
| Personal information | A position that involves access to personal information, as defined in Section 14_3501 of the Commercial Law Article, of a customer, employee, or employer, except for personal information customarily provided in a retail transaction |
| Fiduciary responsibility | A position that involves a fiduciary responsibility to the employer, including the authority to issue payments, collect debts, transfer money, or enter into contracts |
| Expense account/corporate credit card | A position that is provided an expense account or a corporate debit or credit card |
| Confidential/financial information | A position that has access to information, including a formula, pattern, compilation, program, device, method, technique, or process, that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from the disclosure or use of the information; and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; or other confidential business information |
Nevada
| Reason | Description |
|---|---|
| Permitted by law | The Company is expressly required to inquire into credit history for employment purposes by law |
| Candidate violated law | The Company reasonably believes that the employee/prospective employee violated a state or federal law |
| Bona fide qualification | The information contained in the credit report is "job related" to the position, meaning that the position involves responsibility for financial assets, access to confidential information, supervisory responsibility, responsibility for access to another person's financial information or employment with a licensed gaming establishment |
New York, NY
| Reason | Description |
|---|---|
| Authorized third-party or $10k | A position with signatory authority over third party funds or assets valued at $10,000 or more |
| Digital security systems | A position with regular duties allowing an employee to modify digital security systems designed to prevent the unauthorized use of the employer's or client's networks or databases |
| Trade secrets/national security | A non-clerical position with regular access to trade secrets or national security/intelligence information |
| Securities Exchange Act of 1934 | The employer is required to use an individual's consumer credit history for employment purposes under state or federal law/regulations or by a self-regulatory organization (as defined by the Securities Exchange Act of 1934) |
| Law enforcement | A position as a police officer or peace officer |
| Bonding | A position requiring bonding under federal law |
| Security clearance | A position requiring security clearance under federal or any state law |
Oregon
| Reason | Description |
|---|---|
| Financial institution/credit union | The Company is a bank or credit union that is federally insured |
| Required by law | The Company is required by state or federal law to use individual credit history for employment |
| Law enforcement | You are seeking to work as a police officer for any: city, port, school district, mass-transit district, county, university, Indian reservation, the Superintendent of State Police, the Criminal Justice Division of the Department of Justice, the Oregon State Lottery Commission or the Governor or as a regulatory specialist for the Oregon Liquor Control Commission, and would be responsible for enforcing the criminal laws of this state or laws or ordinances related to airport security |
| Confidential/financial information | The position involved in this employment decision involves, as an essential function, access to financial information not customarily provided in a retail transaction such as an exchange of cash, checks, credit or debit cards (i.e. the processing of loans or extension of credit) |
| Insurance or surety/fidelity bond | The position involved in this employment decision requires the Company to obtain credit history as a condition of obtaining insurance or a surety or fidelity bond |
Philadelphia, PA
| Reason | Description |
|---|---|
| Bonding | A position that requires bonding under City, state, or federal law |
| Managerial position | A supervisory or managerial position involving setting the direction or policies of a business or direction thereof |
| Significant financial responsibility | A position involving significant financial responsibility to the employer, including authority to make payments, transfer money, collect debts, or enter contracts, but not including handling retail transactions |
| Confidential/financial information | A position requiring access to financial information pertaining to customers, other employees, or employers, other than information provided in a retail setting |
| Confidential or proprietary information | A position requiring access to confidential or proprietary information that derives substantial value from secrecy |
Rhode Island
| Reason | Description |
|---|---|
| Disclosure to candidate | The Company has provided advance notice to the candidate of the request for the credit report in connection to prospective employment |
Vermont
| Reason | Description |
|---|---|
| Required by law | The information is required by state or federal law or regulation |
| Confidential/financial information | You seek to be/are employed in a position that involves access to "confidential financial information" (defined as sensitive financial information of commercial value that a customer or client of the employer gives explicit authorization for the employer to obtain) |
| Financial institution/credit union | The Company is a financial institution as defined in 8 V.S.A. Section 11101(32) or a credit union as defined in 8 V.S.A. Section 30101(5) |
| Law enforcement | You seek to be/are employed in a position as a law enforcement officer |
| Fiduciary responsibility | You seek to be/are employed in a position that requires a financial fiduciary responsibility to the Company or a Company' clients |
| Company payroll | You seek to be/are employed in a position that involves access to the Company's payroll information |
| Reliable predictor of performance | The Company can demonstrate that credit information is a valid and reliable predictor of employee performance in the your specific position of employment |
Washington
| Reason | Description |
|---|---|
| Required by law | A position that is required by state or federal law to include individual credit history |
| Confidential/financial information | A position that involves access to financial information such as an exchange of cash, checks, credit or debit cards (i.e., the process of loans of extension of credit) |
| Insurance or surety/fidelity bond | A position that requires the company to obtain credit history as a condition of obtaining insurance or a surety or fidelity bond |
| Financial institution/credit union | A position with a financial institution |
| Public safety | A public safety position |
| Fiduciary responsibility | A position that requires a financial fiduciary responsibility to the Company or the Company's clients, including the authority to issues payments, collect debts, transfer money or enter into contracts |