Vermont is now the eighth U.S. state to implement a law restricting employers from using applicant credit reports for employment purposes. Senate Bill 95, which will take effect July 1, 2012, only exempts Vermont employers from the new provisions if one or more of the following conditions are applicable:
- The information is required by state or federal law or regulation.
- The position of employment involves access to confidential financial information.
- The employer is a financial institution as defined in 8 V.S.A. § 11101(32) or a credit union as defined in 8 V.S.A. § 30101(5).
- The position of employment is that of a law enforcement officer as defined in 20 V.S.A. § 2358, emergency medical personnel as defined in 24 V.S.A. § 2651(6), or a firefighter as defined in 20 V.S.A. § 3151(3).
- The position of employment requires a financial fiduciary responsibility to the employer or a client of the employer, including the authority to issue payments, collect debts, transfer money, or enter into contracts.
- The employer can demonstrate that the information is a valid and reliable predictor of employee performance in the specific position of employment.
- The position of employment involves access to an employer’s payroll information.
The bill’s language goes on to state that employers “may not use an employee’s or applicant’s credit report or history as the sole factor in decisions regarding employment, compensation, or a term, condition, or privilege of employment.” Vermont joins California, Connecticut, Hawaii, Illinois, Maryland, Oregon and Washington as states that have implemented laws prohibiting employers from using credit reports for employment purposes.
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