Colorado is the Latest State to Limit the Use of Credit Reports for Employment Purposes

(Last Updated On: June 14, 2018)

credit reports

Special Announcement to all State of Colorado employers:

The State of Colorado has passed Senate Bill 13-018, which limits the use of credit reports by employers. The bill was signed into law by the governor on April 19th, 2013. This law will go into effect on July 1st, 2013.

The law states:

1) No employer or employer’s agent, representative or designee shall use consumer credit information or require an employee or prospective employee to consent to a request for a credit report that contains information about the employee’s or prospective employee’s credit score, credit account balances, payment history, savings or checking account balances or savings or checking account numbers as a condition of employment unless (1) such employer is a financial institution, (2) such report is required by law, and (3) such report is substantially related to the employee’s current or potential job or the employer has a bona fide purpose for requesting or using information in the credit report that is substantially job-related and is disclosed in writing to the employee or applicant.

2) If an employer relies on any consumer credit information to take adverse action regarding the person whose information was obtained, the employer shall disclose that fact and the particular information upon which the employer relied, to that person.

 

This law will require a review of the hiring process in place. This includes the waiver that all applicants must complete, and may require changes to that process.

The complete text of this law can be found here.

In order to comply with this law, Justifacts recommends that you consult with your legal department. This will help your company determine what changes, if any, need to be made to your hiring process.

 

It is important to note that Justifacts is providing this information as a service to our clients. None of the information contained herein should be construed as legal advice, nor is Justifacts engaged to provide legal advice. We go to great lengths to make sure our information is accurate and useful. We recommend you consult your attorney or legal department if you want assurance that our information, and your interpretation of it, is appropriate to your particular situation.

 

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