Naperville Business Attorney Discusses Credit Checks During the Hiring Process

credit checks, Naperville business law attorneyWhen you are looking for new employees to add to your team, you want people who are motivated, hardworking, and reliable. Your staff is the backbone of your company, and if you cannot trust your employees, there is likely to be a great deal of friction on a daily basis.

During my career as a business law attorney, I have helped many business owners developing hiring practices that are reasonable, fair, and in complete compliance with state and federal laws. For some companies, part of the hiring process includes conducting credit checks on candidates. It is important to realize that there are very strict regulations regarding employment-related credit checks in Illinois, and overzealous employers can be held accountable for violating them.

Protecting Employees’ Privacy

In 2010, Illinois lawmakers passed a measure known as the Employee Credit Privacy Act (the Act) which was intended to limit employers from making employment decisions based on an applicant’s credit history. Gainful employment is one of the most efficient components of rebuilding credit, but if a person cannot get a job because of his or her credit rating, recovery may be all but impossible. In general, the Act prohibits employers from conducting credit checks or using them as a condition of employment for applicants for most positions.

Of course, there are exceptions, as certain businesses and positions require an employee to demonstrate a particular level of financial responsibility. A poor credit rating could be an indication that a person is not qualified to work in such a capacity. According to the Act, it is legal for entities such as banks, financial institutions, debt collection companies, and insurance companies to base employment decisions on an applicant’s credit history. Specific positions within other businesses are also exempt from the Act’s general prohibition, including those who handle large sums of money, those who are trusted with significant business decisions, or when the position requires bonding by state or federal law.

Credit Checks for Sales Associates

Late last summer, an Illinois appeals court determined that a department store chain was overreaching by conducting pre-employment credit checks on floor sales associates. The store maintained that sales associates handled customers’ personal information by accepting credit card applications and, therefore, credit checks on the employees were justified under the Act. The First District Appellate Court disagreed. A three-judge panel ruled that the Act was not meant to be applicable to entry-level retail jobs and that using credit checks in this way created unnecessary obstacles to employment.

Questions About Credit Checks for Your Employees?

If you are uncertain about how the Employee Credit Privacy Act may apply to your company, an experienced Naperville business law attorney can provide assistance. We will help you work within the law to hire the best possible staff for your business. Call 630-756-1160 for a confidential consultation at The Gierach Law Firm today.



National Law Review

Illnois Employee Credit Privacy Act

Cook County Record