Connecticut Seal

General Assembly

File No. 4

    February Session, 2016

Senate Bill No. 40

Senate, March 3, 2016

The Committee on Labor and Public Employees reported through SEN. GOMES of the 23rd Dist., Chairperson of the Committee on the part of the Senate, that the bill ought to pass.

AN ACT CONCERNING EMPLOYER INQUIRIES ABOUT AN EMPLOYEE'S OR PROSPECTIVE EMPLOYEE'S CREDIT HISTORY.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 31-51tt of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):

(a) As used in this section:

(1) "Employee" means any person engaged in service to an employer in a business of his employer;

(2) "Employer" means any person engaged in business who has one or more employees, including the state or any political subdivision of the state;

(3) "Financial institution" means (A) any entity or affiliate of a state bank and trust company, national banking association, state or federally chartered savings bank, state or federally chartered savings and loan association, state or federally chartered credit union, insurance company, investment advisor, broker-dealer, (B) an entity registered with the Securities and Exchange Commission, or (C) any mortgage broker, mortgage correspondent lender or mortgage lender licensed pursuant to chapter 668 or any mortgage servicing company, as defined in section 36a-715; and

(4) "Substantially related to the employee's current or potential job" means the information contained in the credit report is related to the position for which the employee or prospective employee who is the subject of the report is being evaluated because the position:

(A) Is a managerial position which involves setting the direction or control of a business, division, unit or an agency of a business;

(B) Involves access to customers', employees' or the employer's personal or financial information other than information customarily provided in a retail transaction;

(C) Involves a fiduciary responsibility to the employer, including, but not limited to, the authority to issue payments, collect debts, transfer money or enter into contracts;

(D) Provides an expense account or corporate debit or credit card;

(E) Provides access to (i) confidential or proprietary business information, or (ii) information, including a formula, pattern, compilation, program, device, method, technique, process or trade secret that: (I) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from the disclosure or use of the information; and (II) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; or

(F) Involves access to [the employer's nonfinancial assets valued at two thousand five dollars or more, including, but not limited to,] museum and library collections [and] or to prescription drugs and other pharmaceuticals.

(b) No employer or employer's agent, representative or designee may require an employee or prospective employee to consent to a request for a credit report that contains information about the employee's or prospective employee's credit score, credit account balances, payment history, savings or checking account balances or savings or checking account numbers as a condition of employment unless (1) such employer is a financial institution, (2) such report is required by law, (3) the employer reasonably believes that the employee has engaged in specific activity that constitutes a violation of the law related to the employee's employment, or (4) such report is substantially related to the employee's current or potential job or the employer has a bona fide purpose for requesting or using information in the credit report that is substantially job-related and is disclosed in writing to the employee or applicant.

(c) Any employee or prospective employee may file a complaint with the Labor Commissioner alleging a violation of the provisions of subsection (b) of this section. Within thirty days after the filing of such complaint, the commissioner shall conduct an investigation and shall render his findings. Should such findings warrant, the commissioner shall hold a hearing, in accordance with the provisions of chapter 54. An employer shall be liable to the Labor Department for a civil penalty of three hundred dollars for each inquiry made in violation of subsection (b) of this section.

(d) The Attorney General, upon complaint of the Labor Commissioner, shall institute civil actions to recover the penalties provided for under subsection (c) of this section. Any amount recovered shall be deposited in the General Fund.

This act shall take effect as follows and shall amend the following sections:

Section 1

October 1, 2016

31-51tt

LAB

Joint Favorable

 

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note

State Impact: None

Municipal Impact: None

Explanation

The bill, which narrows the circumstances under which an employer can require an employee or job applicant to consent to a credit report request, does not result in any fiscal impact to the state or municipalities.

The Out Years

State Impact: None

Municipal Impact: None

OLR Bill Analysis

SB 40

AN ACT CONCERNING EMPLOYER INQUIRIES ABOUT AN EMPLOYEE'S OR PROSPECTIVE EMPLOYEE'S CREDIT HISTORY.

SUMMARY:

This bill limits the circumstances in which most employers can check the credit of job applicants and employees. But it also broadens the circumstances in which employers can require checks of people applying for or working in positions that would give them access to museum and library collections or prescription drugs and other pharmaceuticals.

Current law generally prohibits employers from requiring an employee or job applicant to consent to a credit report request, but allows for various exceptions. One exception allows credit checks of people seeking positions with access to the employer's nonfinancial assets valued at $2,500 or more. The bill limits this exception to positions with access to museum and library collections or prescription drugs and other pharmaceuticals of any value.

The law, unchanged by the bill, also allows employers to require credit checks if (1) the employer is a financial institution, (2) it is required by law, (3) the employer reasonably believes an employee has violated a law related to his or her employment, or (4) the position meets certain other requirements (e.g., is managerial or involves access to proprietary information).

EFFECTIVE DATE: October 1, 2016

COMMITTEE ACTION

Labor and Public Employees Committee

Joint Favorable

Yea

9

Nay

4

(02/23/2016)

TOP