Senate to Consider Ban on Credit Checks for Job Applicants

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Serving Employees and Employers in Annapolis, Glen Burnie, Columbia, Silver Spring, Frederick. as well as Anne Arundel and Howard Counties

Massachusetts senator, Elizabeth Warren introduced a new bill this week called the Equal Employment for All Act, designed to end the common practice of using credit reports to screen out applicants for jobs.

The law would broadly forbid using or procuring a credit report, regardless of the applicant’s consent. As with many decisions in modern life, consent is a black and white proposition: consent to this lengthy user agreement, or your phone won’t work; consent to these disclosures or we won’t consider your job application. The use of credit reports to discriminate against someone whose unemployment led to financial issues or uninsured medical bills, for example, leads to more income inequality.

Senator Warren’s press release explains the need for the law:

“A bad credit rating is far more often the result of unexpected medical costs, unemployment, economic downturns, or other bad breaks than it is a reflection on an individual’s character or abilities,” Senator Warren said. “Families have not fully recovered from the 2008 financial crisis, and too many Americans are still searching for jobs. This is about basic fairness — let people compete on the merits, not on whether they already have enough money to pay all their bills.”

The main exception is if the person needs or has a national security clearance. The other is “unless otherwise required by law.”

The Maryland credit report ban is much narrower than the proposed federal statute, and permits an employer to obtain a credit report if the candidate would work with finances, for example, would work for a bank, credit union, investment advisor, or have access to trade secrets.

If the federal law passes, an employee or applicant could rely on his or her federal rights under the Equal Credit Opportunity Act and sue in federal court if a credit report led to a rejection of a job or a promotion.

If you feel your employer engages in unfair practices or discrimination in the workplace, please call our offices today. Discuss your situation with an experienced employment and discrimination lawyer.

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Joyce Smithey, a seasoned employment and labor law attorney, has over 22 years of experience representing both employers and employees in Maryland and D.C. Her practice, rooted in a deep understanding of employment law, spans administrative hearings to federal litigation. Joyce's approach is comprehensive, focusing on protecting client interests while ensuring legal compliance. A Harvard graduate, her career began in Fortune 500 companies, transitioning to law after a degree from Boston University School of Law. Joyce's expertise is recognized by numerous awards, including Maryland’s Top 100 Women. At Smithey Law Group LLC, which she founded in 2018, Joyce continues to champion employment rights, drawing on her rich background in law and business.

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