Two More Bills Introduced to Prohibit Credit Checks as a Condition of Employment

On September 16 and September 20, two bills (A3199 and A3238) were introduced that would to varying degrees prohibit employers from requiring a credit check on current or prospective employees as a condition of employment. This makes six pending bills concerning this important topic, as four similar bills (A1519, S1791, A2561, and S1922) seeking to limit an employer’s use of credit checks were introduced earlier this year. None of the bills have been signed into law to date.

A3199, like pending bill A1519, prohibits employers from requiring credit checks on employees or applicants unless the employer is required by federal or state law to conduct the check. A3199 does not contain an exception for credit checks that an employer considers necessary due to a “bona fide job requirement” of the employee or applicant.

A3238, like pending bills S1791, A2561 and S1922, would allow employers to conduct credit checks when required by law, as well as when credit history is an established bona fide job requirement for a current or prospective employee being evaluated for a certain position. Such “bona fide job requirements” are narrowly defined to exist only where the current or prospective employees are being considered for the following positions: (1) a managerial position involving the financial direction or control of the business; (2) a position involving access to customers’, employees’ or the employer’s personal or financial information (other than information customarily provided in routine retail transactions); (3) a position involving a fiduciary duty to the employer such as, for example, the authority to issue payments, transfer money or enter into contracts; or (4) a position that enjoys an expense account for travel. A2561 and S1922 also would allow credit checks for an additional purpose – when an employer reasonably believes their employees engage in certain criminal activity.

Unlike A1519 and S1791, neither of the new bills seeks to amend New Jersey’s Law Against Discrimination to make it an unlawful employment practice for employers to discriminate based on an individual’s credit history or financial status.

Finally, both A3199 and A3238 also would: prohibit employers from requiring employees to waive their rights under the laws; prohibit retaliation for asserting their rights under the laws; provide for civil penalties; and provide individuals with the right to bring civil actions under the laws for injunctive relief, compensatory and consequential damages, and reasonable attorneys’ fees and court costs.