DC Employment Law Change Restricts Credit History Use in Hiring

Washington, D.C. Mayor Muriel Bowser recently signed into law the Fair Credit in Employment Amendment Act of 2017 (i.e. FCEAA), which restricts the use of credit histories when making employment decisions.

The Act amends the Human Rights Act of 1977, and follows in the footsteps of Philadelphia and New York City in limiting an employer’s ability to review or use an applicant’s credit history when making hiring decisions. The Act will go into effect after a 30-day review and publication in DC’s District of Columbia Register.

The law applies to employers with one or more employees in D.C., and applies only to applicants or employees in the District of Columbia.

Under the FCEAA, employers are prohibited from using credit information as a decision-making tool when hiring. Employers are also restricted when inquiring into an employee’s or applicant’s credit history.

Credit information includes “any written, oral, or other communication of information” regarding an employee’s or applicant’s “creditworthiness, credit standing, credit capacity, or credit history.”

Employers are prohibited from directly or indirectly requesting an employee or applicant submit credit information; making inquiries into an applicant’s or employee’s credit information; or accepting credit information on an employee or applicant.

Employers can no longer mention credit checks in background check disclosure forms or have employees sign a D&A form that mentions credit checks.

The employment law change also prohibits employers from referring to or using credit information when firing, hiring, establishing the terms and conditions of employment, or determining compensation.

The new law does not apply to law enforcement positions, situations where the employer is required by law to obtain credit information, when security clearance is required for the position, when a financial institution is involved, and when the employer receives credit information in pursuant to a court order, subpoena or law enforcement investigation.

Employers are prohibited from publishing or printing any advertisement or notice that indicates specifications, preferences or distinctions based on an applicant’s credit information.

The Human Rights office in D.C. will employ a public information campaign to inform employers, employees and applicants. The campaign will outline the Act’s requirements and will span over the next few months.

The employment law change comes after the D.C. Council passed the Universal Paid Leave Amendment Act of 2016. If signed into law, the Act will provide all employees in the private sector with: six weeks of leave to care for sick family members, eight weeks paid leave for caring for a new child, and two weeks for personal illness.