Additional Restrictions for Employer Credit Checks Could Be On the Way For New Jersey Employers

Legislation advanced by the New Jersey State Assembly (A2298) on December 14, 2015 could signal tougher restrictions on employer credit checks of existing or potential employees.  The pending legislation also would also prohibit discrimination against those individuals based on credit report information.  An earlier version of the legislation passed the Senate in May 2012 in a 22-16 vote but was never voted on in the full Assembly.

The new Assembly bill however does not prevent an employer from performing a credit inquiry or taking an employment action if credit history is a bona fide occupational qualification of a particular position or employment classification, including: (1) a managerial position which involves setting the financial direction or control of the business; (2) a position which involves access to customers’, employees’, or employers’ personal belongings or financial assets or financial information, other than information customarily provided in a retail transaction; (3) a position which involves a fiduciary responsibility to the employer, including, but not limited to, the authority to issue payments, transfer money or enter into contracts or involves leases of real property; (4) a position which provides an expense account for travel; or (5) a law enforcement officer for a law enforcement agency, or a governmental or non-governmental security personnel position, including security personnel in a homeland security agency.

The bill also prohibits an employer from requiring a prospective employee to waive or limit any protection granted under the bill as a condition of applying for or receiving an offer of employment.  Employers also may not “discharge, demote, suspend, retaliate, refuse to hire, or otherwise discriminate” against a current or prospective employee with regard to promotion, compensation, or the terms, conditions or privileges of employment, based on information in a credit report on the employee.

Furthermore, any current, prospective, or former employee aggrieved under the provisions of the bill may bring an action in a court of competent jurisdiction for appropriate injunctive relief and damages, including reasonable attorneys’ fees and court costs. In addition, the bill provides for the imposition of civil penalties in an amount not to exceed $2,000 for the first violation, and $5,000 for each subsequent violation, collectible by the Commissioner of Labor and Workforce Development.

For more information regarding this legislation and to learn how your business can implement best practices for credit checks, please contact Dina M. Mastellone, Esq., Director of the firm’s Human Resources Practice Group, at dmastellone@genovaburns.com or 973-533-0777.