Colorado Ninth State to Prohibit Credit Checks for Employment Purposes

Colorado’s governor has signed S.B. 18 to prohibit employers from considering an applicant’s or employee’s credit history in employment decisions. California, Maryland, Connecticut, Hawaii, Illinois, Washington, Oregon and Vermont, as well as at least one locality, the City of Chicago, also have similar laws. Moreover, the U.S. Congress and several more state legislatures are considering comparable legislation. The new Colorado law prohibits an employer from using consumer credit information for employment purposes unless the information is “substantially related to the employee’s current or potential job.” Employers should note that these obligations are in addition to the employer’s disclosure and notice requirements under the FCRA. The new law empowers the Director of the Colorado Division of Labor in the Department of Labor and Employment to enforce its provisions. An aggrieved person may file a complaint with the Division, which is to promptly investigate the allegations and issue findings within thirty days after a hearing. The Division may award civil penalties not to exceed $2,500 to the prevailing party. The new Colorado law takes effect July 1, 2013, and applies to acts occurring on or after said date.

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