New Law Prohibits Credit Checks On Illinois Employees

Starting January 1, 2011, Illinois will join just four other states (Hawaii, Louisiana, Oregon and Washington) that prohibit employers from conducting credit checks on job applicants and employees as part of the process for making employment decisions.

The new law, called the Employee Credit Privacy Act, prevents Illinois employers (with certain exceptions) from inquiring about an applicant or employee’s credit history or obtaining a copy of their credit report.

Other Prohibited Conduct

In addition to preventing employers from using credit history as a basis for hiring, promotion or other employment decisions, the Act also prohibits employers from discriminating or retaliating against anyone who files a complaint under or participates in an action concerning a violation of the Act. Further, the Act specifically prohibits any agreement to waive the requirements of the Act.


An individual who believes his or her rights have been violated under the Act may bring a civil action in court to obtain injunctive relief or damages, or both. In such an action, the individual, if successful, would be entitled to award of attorneys’ fees and costs.

What Can You Do?

Employers who conduct any kind of background check that involves an applicant or employee’s credit history should carefully evaluate whether their business falls under one of the many exceptions to the Act’s prohibitions. The Act does not prevent an employer from conducting thorough background investigations. However, any such investigations must comply with the Fair Credit Reporting Act, and should include obtaining an applicant’s prior written consent and providing an applicant with a copy of any information obtained during a background investigation by a third party which results in an adverse employment decision.