Effective July 1, 2012, Vermont joins
California, Connecticut, Hawaii, Illinois, Maryland, Oregon,
Washington, as jurisdictions which restrict an employer’s right to
obtain and use credit information for making employment decisions.
Under
this new law, a Vermont employer may not inquire about or use an
applicant or employee’s credit report or credit history with respect to
employment, compensation, or a term, condition, or privilege of
employment unless: 1. The information is required by state or federal
law or regulation; 2. The position being sought or held involves access
to confidential financial information (defined as sensitive financial
information of commercial value that a customer or client of the
employer gives explicit authorization for the employer to obtain,
process, and store and that the employer entrusts only to managers or
employees as a necessary function of their job duties); 3. 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); 4. The position being sought
or held 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); 5. The position being
sought or held 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; 6. The
employer can demonstrate that the information is a valid and reliable
predictor of employee performance in the specific position being sought
or held; and/or 7. The position being sought or held involves access to
an employer’s payroll information. However, even if an employer can
avail itself of one of these exemptions, the applicant or employee’s
credit report or history may not be the sole factor in decisions
regarding employment, compensation, or a term, condition, or privilege
of employment.
If an employer is lawfully permitted to obtain
credit history, the employer must: 1. Obtain the employee’s or
applicant’s written consent each time the employer seeks to obtain the
employee’s or applicant’s credit report; and 2. Disclose in writing to
the employee or applicant the employer’s reasons for accessing the
credit report, and if an adverse employment action is taken based upon
the credit report, disclose the reasons for the action in writing. The
employee or applicant has the right to contest the accuracy of the
credit report or credit history.
Vermont employers who conduct
credit checks must closely review this statute to ensure that
information is only obtained where permitted by law and that all
necessary disclosures are provided to applicants and employees.
Further, even if an exemption is applicable, a Vermont employer must not
base any employment decisions solely on credit history.
Feel free as always to direct any questions on the appropriate use of Credit Reports to compliance@s2verify.com
