Legal Alert: The Fair Credit in Employment Amendment Act of 2016

On February 15, 2017, D.C. adopted "The Fair Credit in Employment Amendment Act of 2016" (the "Act"). The Act amends the D.C. Human Rights Act to prohibit employers from discriminating against prospective and current employees based on their credit information. For purposes of the Act, credit information includes "any written, oral, or other communication of information bearing on an employee's creditworthiness, credit standing, credit capacity, or credit history." Specifically, employers may not directly or indirectly require, request, suggest, or cause any employee to submit credit information or use, accept, refer to or inquire into an employee or prospective employee's credit information. This includes any direct or indirect conduct intended to gather credit information using any method, including application forms, interviews, and credit history checks. The Act went into effect March 17, 2017.

Exemptions

The law does provide several exemptions, including some that are applicable to non-government employers, including:

• The employer is otherwise required by D.C. law to require, request, suggest or cause the employee to submit credit information, or use, accept, refer to or inquire into an employee's credit information; 
• The employee is required to possess a security clearance under D.C. law;
• The employer is a regulated financial institution, such as a bank, savings institution, or credit union, and the employee will have access to personal financial information; or
• Where an employer requests or receives credit information pursuant to lawful subpoena, court order or law enforcement investigation. 

Enforcement

The D.C. Office of Human Rights has the authority to investigate charges of violations of the Act. An employer who is found to have violated the law will face a $1,000 fine for the first violation, a $2,500 fine for the second violation, and a $5,000 for each violation thereafter. In addition, individuals also have the right to sue the employer, just as they would for any other unlawful discriminatory employment practice under the D.C. Human Rights Act. 

Next Steps

As a next step, you should review your applications and other employment-related documents and remove any references to the use of credit information. Also, review your practices to ensure you do not directly or indirectly request credit information, unless an exemption applies. Employers who seek credit information for positions that are exempt under the Act should also review the new requirements to ensure they are in compliance with the new procedures.

Additional information for nonprofits and small businesses is available at the D.C. Bar Pro Bono Center’s resource website: www.lawhelp.org/dc/NPSB.

If you have questions, feel free to contact us at npsb@dcbar.org.

© D.C. Bar Pro Bono Center 2017

This communication is provided by the D.C. Bar Pro Bono Center solely for informational purposes, without any representation that it is accurate or complete. It does not constitute legal advice and should not be construed as such. It does not create an attorney-client relationship between the recipient and any other person, or an offer to create such a relationship. This communication contains information that is based, in whole or in part, on the laws of the District of Columbia and is current as of the date it is written. However, laws vary from state to state and may change from time to time. As a result, the information may not be appropriate for anyone operating outside the District of Columbia and may no longer be timely. Consult an attorney if you have questions regarding the contents of this communication.