Like other employers trying to make careful hiring decisions,  health care employers often make pre-hire inquires regarding applicant credit histories and base  hiring decisions, in part, on credit reports obtained.  In a growing trend, many states have proposed legislation prohibiting or substantially limiting the practice.  Nebraska recently introduced two bills to limit the use of credit checks for this purpose.

State Senator Annette Dubas introduced LB 113 which would add the use of credit histories or reports to Nebraska’s list of unlawful employment practices. The bill contains exceptions where information in a credit check directly relates to the occupation for the job being sought.

State Senator Brenda Council of Omaha introduced  LB530 which would prohibit employers from inquiring about or using an employee’s or prospective employee’s credit history as a basis for employment, recruitment, discharge or compensation.  The proposed legislation is entitled the “Employee Credit Privacy Act.”  This proposed bill makes it unlawful for an employer to order or obtain an employee’s or applicants credit history from a consumer reporting agency  unless it is a bona fide occupational requirement.  The Bill provides a pre-determined list of bona fide occupational requirements.  This bill also contains an anti-retaliation provision. Both bills were recently referred to the Business and Labor Committee for hearing. 

Nebraska is just one of many states that has proposed legislation prohibiting employers’ use of  employees or applicants credit history in basing an employment decision.  Currently, four states have enacted legislation including Hawaii, Washington, Oregon and Illinois that limit credit checks for employment purposes and approximately 17 states have proposed similar legislation.  Employers with multi-state operations need to review periodically their background check procedures to ensure they are not running afoul of individual state background check legislation. 

Special thanks to Chad Richter, Partner in Jackson Lewis’ Omaha, Nebraska office, for this contribution.

 

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Photo of Ana C. Shields Ana C. Shields

Ana Shields is a Principal in the Long Island, New York, office of Jackson Lewis P.C. Since joining Jackson Lewis in June 2005, she has practiced exclusively in employment law and has been involved in proceedings before federal and state courts, the American…

Ana Shields is a Principal in the Long Island, New York, office of Jackson Lewis P.C. Since joining Jackson Lewis in June 2005, she has practiced exclusively in employment law and has been involved in proceedings before federal and state courts, the American Arbitration Association and administrative agencies.

Ms. Shields has successfully prepared pleadings, motions, memoranda of law, position statements and legal opinions related to employment law issues such as employment discrimination, harassment, retaliation, whistle-blowing claims and restrictive covenants. Ms. Shields has advised clients on compliance with various state and federal laws affecting the workplace, including Title VII, the Equal Pay Act, Fair Labor Standards Act, Family and Medical Leave Act, Americans with Disabilities Act, Age Discrimination in Employment Act and New York State and City laws. In addition, she is a firm resource for Electronic Discovery. She has worked closely with clients through all phases of litigation including investigations, preparations for depositions, attending depositions and trials.

While attending law school, Ms. Shields was a published member of the New York International Law Review. She was the recipient of the 2003 American Bar Association/Bureau of National Affairs Award for Excellence in Labor and Employment Law. She was also awarded the CALI Award for Excellence in Employment Law, Advanced Labor Law, and Jurisprudence.

Prior to joining the firm, Ms. Shields was a commercial litigation associate at a firm in Long Island, New York.