On May 17, 2012, Vermont Governor Peter Shumlin signed Vermont Act No. 154 (S. 95), which prohibits employers, subject to certain exceptions, from using or inquiring into an applicant or employee’s credit report or “credit history” for employment purposes. The legislature stated that the new law was necessary because “information contained in a credit report has no correlation to job performance” and “credit reports do not provide meaningful insight into a candidate’s character, responsibility, or prospective job performance.” Effective July 1, 2012, Vermont is the eighth state to regulate the use of credit-related information for employment purposes, following on the heels of laws enacted in California, Connecticut, Hawaii, Illinois, Maryland, Oregon and Washington. Employers who use credit reports for employment purposes in any of these eight states therefore should review and, if appropriate, modify their policies for compliance. All employers should continue to stay abreast of additional developments in this dynamic area of employment law.
