Illinois Tightens Credit Checks

for Employers


New law effective 1/1/11


Ammunition to litigate also

legislated under the amended

wage collection law

             The Employee Privacy Act prohibits most employers from inquiring into an applicant’s or employee’s credit history, ordering a credit report on an applicant or employee, or taking any adverse action because of an individual’s creditor history (or report).

             Your organization may be exempt if it is one of these: Banks, insurance companies, law enforcement agencies (and other state and local agencies that require credit reports) and qualified debt collection agencies.

             Also, any employer can also run a credit check, but only if credit worthiness is a bona fide qualification for the job (“BFOQ”).  One of the following criteria must apply.  A job may be subject to a credit check, where the job involves

o   unsupervised access to cash or goods valued at $2,500 or more, or

o   authority to sign for business transactions of at least $100, or

o   managerial authority that sets the direction or control of the business, or

o   access to “protected” information, e.g., financial or trade secrets, or

o   duties deemed within the BFOQ that the Illinois Department of Labor may issue, or

o   duties that require creditworthiness or bonding under law

            Background reports or investigation reports are still proper, even when a provided from a credit reporting agency, provided the report contains no credit information.

            A person believing they were harmed by a violation of the Employee Privacy Act may sue in state court to recover damages, costs, and attorney’s fees.

            Short story:  Amendments to the Illinois Wage Payment and Collection Act, to take effect January 1, 2011, will give the state law more punch.  At present the Act deems the refusal of an employer to pay wages found due a misdemeanor; under the amendment the act of refusal will be deemed a felony.  Under the new law it will be easier for attorneys taking such cases to recover attorney’s fees and court costs, regardless of the amount of wages claimed due.