Nevada is amongst the latest trend of states prohibiting the use of consumer credit reports for employment screening. Nevada Governor Sandoval signed senate bill 127 into law and it will go into effect October 1, 2013. This senate bill is an amendment to chapter 613 of the Nevada Revised Statutes covering “employment practices”.
The most recent state prior to this new law was Colorado, which like many other states is written in a similar manner. This trend demonstrates the increasing pressure to perhaps have a similar law in place at the federal level.
The law defines consumer credit reports as any written, oral or other communication of information by a consumer reporting agency bearing on the credit worthiness, credit standing or credit capacity of a person.
The law is written as such and states it is unlawful for any employer to:
- directly or indirectly, require, request, suggest, or cause any employee or prospective employee to submit a consumer credit report or other credit information as a condition of employment; or
- use, accept, refer to, or inquire about a consumer credit report or other credit information.
Further the law says an employer cannot discharge, discipline, discriminate against in any manner, deny employment or promotion to, or threaten to take any such action against any employee or prospective employee:
- who refuses, declines, or fails to submit a consumer credit report or other credit information;
- on the basis of the results of a consumer credit report or other credit information;
- who has filed any complaint, instituted or caused to be instituted any legal proceeding, or has testified or may testify in any legal proceeding instituted pursuant to the new law; or
- who has exercised his or her rights, or has exercised on behalf of another person the rights afforded to him or her under the new law.
Like other states, there are exceptions to the new law. Employers may use a consumer credit report for employment screening purposes under the following conditions:
- The employer is required or authorized, pursuant to state or federal law, to use a consumer credit report or other credit information for that purpose;
- The employer reasonably believes that the employee or prospective employee has engaged in specific activity which may constitute a violation of state or federal law; or
- The information contained in the consumer credit report or other credit information is “job related” or reasonably related to the position for which the employee or prospective employee is being evaluated for employment, promotion, reassignment or retention as an employee.
Job related as defined by the law means, if the position involves employment: with a financial institution of the position involves the responsibility of financial assets, or access to confidential information, managerial or supervisor responsibility, direct exercise of law enforcement, employment with a gaming establishment, or access to another person’s financial information.
It’s important to use diligence when conducting background checks and the use of consumer credit reports. As an increasing amount of states are mandating restrictions on these types of reports it may be a worth considering these laws as a benchmark for the use of consumer credit reports – even if your state has not yet adapted a similar law .