Connecticut Limits Use of Background Checks in Employment

A new Connecticut law that took effect on October 1, 2011 (Public Act 11-223) makes it unlawful for most Connecticut employers to require employees or prospective employees to consent to requests for credit reports that contain information about their credit scores, credit account balances, payment history, savings or checking account balances, or account numbers. Connecticut is one of only a few states that have enacted such a law.

The new law covers all employers with at least one employee in Connecticut. The law, however, does contain the following exceptions:

• The employer is a financial institution;
• The employer is required by law to obtain such a credit report;
• The employer reasonably believes that the employee has engaged in a specific activity that constitutes a violation of the law related to the employee’s employment; or
• The report is substantially related to the employee’s current or potential job or the employer has a bona fide job-related purpose for requesting or using the information, and the employer discloses that reason in writing to the employee or applicant.

The final exception is further explained in the new law, and in order for the report to be “substantially related” to the job in question, the position must fall into one of several categories, including, for example, managerial positions involving direction or control of a business or a division and those with access to an expense account or corporate credit card.

It is important for all Connecticut employers to determine whether they are currently seeking credit reports that are affected by this law, and to assess whether the business or the position in question is exempted from the law’s coverage.