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Maryland Considers Outlawing Use of Credit Reports in Employment Decisions

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Credit squeeze by Alan Cleaver on Flickr

Image by Alan Cleaver on Flickr

Back in April, we discussed how some states are outlawing the use of credit reports in hiring decisions, and now Maryland may become the next state to do so.

Maryland State Delegate Kirill Reznik (D-Germantown) recently re-introduced a bill that would prevent employers in the state from using credit reports in hiring and firing decisions; Reznik had brought up a similar bill last year as well, but it failed without the necessary support thanks to “some waves” created by credit companies and businesses, according to Reznik.

Now Maryland House Bill 87, also known as the Job Applicant Fairness Act, has a better chance, he believes, not only because other states have passed similar legislation but also because the federal government is taking action in this area of law as well.

“Four states [Hawaii, Illinois, Oregon and Washington] have now passed this bill, and the EEOC has started to move on this issue as well as a matter of discrimination,” he said. “I think [the bill's opponents] see the writing on the wall, so we’re working together to find some common ground, and that’s progress from last year.”

The proposed bill is geared at helping blue-collar workers secure employment; accordingly, banks and other financial institutions would be exempt from the use of credit reports in hiring and firing decisions.

“We’re not trying to target the CFOs or the folks involved in dealing with companies’ millions of dollars,” he said. “We mean nurses, school teachers, janitors, plumbers … blue-collar workers having trouble making ends meet, so that they don’t have one more hurdle to overcome.”

As we’ve noted in the past here at the LegalZoom blog, any correlation between a person’s credit score and his or her work performance has yet to be shown. Indeed, Eric Rosenberg of the TransUnion credit bureau stated as such in testimony regarding the Oregon law when it was under consideration.

What do you think about the use of credit reports in hiring decisions?

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February 1st, 2011 at 9:38 am