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Illinois

* The setup…

Illinois employers will no longer be able to run credit checks on those applying for jobs under a measure Gov. Pat Quinn signed into law today.

Supporters say the move is aimed at preventing employers from turning away job seekers due to poor credit amid an economic crisis that has left many unemployed and struggling to pay the bills.

“If you lose your job and your credit is damaged as a result, and employers use your credit to prevent you from getting a job, this is a vicious cycle folks will never get out,” said Sen. Don Harmon, an Oak Park Democrat who sponsored the legislation.

Under the new law that takes effect Jan. 1, employers cannot use credit history to determine whether to hire, fire or promote someone. If an employer is caught accessing such information, they can face legal action.

However, some industries and positions are exempt, such as those dealing with banking, insurance, trade secrets or state and national security.

The Tribune editorialized against the law today.

* The Question: Good law or bad? Explain.

posted by Rich Miller
Wednesday, Aug 11, 10 @ 11:10 am

Comments

Good law. with the exemptions. We’re in tough times and those credit scores can take a long time to raise. It’s not like you can’t fire folks for performance later.

Comment by wordslinger Wednesday, Aug 11, 10 @ 11:14 am
Hmmm….credit check lobby asleep at the switch?

Or are they just no ponying up enough campaign contributions these days?

Comment by Leroy Wednesday, Aug 11, 10 @ 11:15 am
Dealing with employee’s creditors is time consuming for employers and affects their business. Repeated phone calls from collection agencies, wage garnishments, and the need for legal assistance in responding to aggressive collectors all drain employers’ bottom line.

Comment by Easily Entertained Wednesday, Aug 11, 10 @ 11:18 am
Answer the question, please.

Comment by Rich Miller Wednesday, Aug 11, 10 @ 11:20 am
Bad law.

Employers are entitled to know who they are hiring, and someone’s history of meeting their obligations is unquestionably relevant to whether they will make a good employee.

Comment by well Wednesday, Aug 11, 10 @ 11:20 am
At this time, it is only fair to shield job seekers from this kind of discrimination.

Considering US credit today - we shouldn’t hire ourselves.

Comment by VanillaMan Wednesday, Aug 11, 10 @ 11:22 am
Wordslinger: You are right that employers can fire people later for poor job performance, but it is incredibly expensive and time consuming for employers to hire and train someone, fire them, and hire and train someone else.

This is just more government interference that we don’t need. Next thing we will see is that landlords will not be able to run credit checks on tenants on the basis that the recession hit people hard.

Comment by Just Observing Wednesday, Aug 11, 10 @ 11:24 am
Good law. A lot of people are in dire financial straights in spite of having worked hard, saved money, and being responsible. They shouldn’t be penalized when trying to find a job in the worst economic times since the Great Depression.

Comment by Aldyth Wednesday, Aug 11, 10 @ 11:24 am
Great law. That Trib editorial couldn’t sound any more devoid of understanding for average people.

Also, so disingenuous. The law specifically doesn’t preclude a company from doing a background check, they just can’t make the credit report part of it.

Serious kudos to the GA and Quinn on this one.

I have great credit, but I still don’t think that my employer should get to use how I spend my money as part of their hiring process. Just because I’ve had luck and a good start in life doesn’t mean that I’m better for a job. Not to get all liberal arts college, but talk about the Trib standing up for the privileged.

Comment by haverford Wednesday, Aug 11, 10 @ 11:26 am
===Next thing we will see is that landlords will not be able to run credit checks===

Ah, the slippery slope rears its head. Stick to the question, please.

Comment by Rich Miller Wednesday, Aug 11, 10 @ 11:30 am
Bad law. Yet another reason for a firm to make do with existing staff rather than risk time and money training someone.

Why do the legislators want to make it harder for anyone to get a job?

Is Governor jello’s next act going to make it illegal to ask about an applicant’s criminal history?

I have seen no evidence that employer’s have been abusing the system that was in place.

Comment by Plutocrat03 Wednesday, Aug 11, 10 @ 11:32 am
great law…

Comment by bored now Wednesday, Aug 11, 10 @ 11:34 am
It’s a good law. How many people have lost jobs and/or homes the past two or three years, hurting what were previously good credit records, as a result? I don’t get the Trib’s position, either.

Comment by Wensicia Wednesday, Aug 11, 10 @ 11:34 am
Good law. The exemptions are the right ones and, for most jobs, one’s credit history is as irrelevant as one’s national origin, sexual orientation etc.

Comment by Far Northsider Wednesday, Aug 11, 10 @ 11:34 am
==Employers are entitled to know who they are hiring, and someone’s history of meeting their obligations is unquestionably relevant to whether they will make a good employee==

That’s not what a FICS score shows, necessarily. It’s more arbitrary, and perhaps misleading. There’s nothing precluding potential employers from running credit histories or background checks, either of which could provide a more complete picture of a prospective employee. This is a good law.

Comment by The Doc Wednesday, Aug 11, 10 @ 11:35 am
I know a number of people who are very good at their jobs and quite responsible, but completely inept at money management. A credit check would most likely have kept them unemployed.

Comment by cynically anonymous Wednesday, Aug 11, 10 @ 11:39 am
Good law, credit scores are an indicator of whether you’re a safe person to lend money to, period.

Comment by Small Town Liberal Wednesday, Aug 11, 10 @ 11:40 am
Bad law… and what the heck does Quinn know about private sector hiring anyway? Anyway, like everything the guy does, given all of the exemptions, this is a for show… Quinn helping the “little guy” again.

Let’s see, for his next trick Quinn will ban interview questions about past job performance… why is that pertinent?

Comment by Wondering... Wednesday, Aug 11, 10 @ 11:44 am
I will abide by my general rule not to take a position on the question, but I will say this: Isn’t it odd that the Tribune is against this bill when its parent company is currently in bankruptcy? Does that mean we shouldn’t read the Tribune because it has bad credit?

[/snark]

Comment by Rich Miller Wednesday, Aug 11, 10 @ 11:44 am
Good law. In addition to the comments above I think this is also a step forward for individual privacy.

Comment by Lakefront Liberal Wednesday, Aug 11, 10 @ 11:45 am
Wondering, explain your answer or face deletion.

Comment by Rich Miller Wednesday, Aug 11, 10 @ 11:46 am
@ Rich

Well put. I was thinking the same thing.

As far as the topic goes, I think it’s a good law.

Comment by How Ironic Wednesday, Aug 11, 10 @ 11:47 am
I think it’s OK, not perfect but not as dire as some think. The exceptions are there for industries like finance, security, etc. where the consequences of an employee being tempted to embezzle or sell secrets to get themselves out of a financial hole are most serious.

Landlords have a different reason for running credit checks because they DO have to depend on YOUR ability to pay your bills, and therefore have a right to know whether or not you can or have been paying your bills. Employers, for the most part, are not financially dependent upon whether or not YOU pay your bills on time.

What this law does, from what I can tell, is simply prevent employers from using credit reports as a substitute for genuine background checks or screening done by bona fide HR staff (perhaps because they don’t want to pay or hire HR staff to do it?).

Credit scoring is complex and there are factors that go into them that have very little if anything to do with a person’s moral character or sense of responsibility. Some actions that seem eminently responsible (such as closing out a credit card you no longer use) can actually hurt your credit. Also there are people who pay cash for everything who have low credit scores because they don’t use credit enough. So overall I think this law does more good than harm.

Comment by Secret Square Wednesday, Aug 11, 10 @ 11:47 am
Its a good law. Credit checks are suppose to be used to check the credit worthiness of someone paying you. The last time I checked the employer was the one doing the paying. The employee should be the one checking on the employeer to see what financial shape the company is in, not vice versa.

Comment by Been There Wednesday, Aug 11, 10 @ 11:51 am
Good law with the limited exceptions. Tribune editorial is overboard.

Comment by downhereforyears Wednesday, Aug 11, 10 @ 11:52 am
Good law! I commend Governor Quinn for signing it, and I commend the leigislator(s)who brought it forth (Jack Franks????). Leroy, if memory serves Penny Pritzker was lobbying against the bill.

It is a good law becuase through no fault of their own many people have been laid off or fired. The economy has hurt many peoples’ ability to pay bills, on time or at all, and many people have fallen behind. In many cases people are trying to decide between buying food to last a week versus paying off a visa or mastercard card balance for purchases made while working on which interest has skyrocketed. When you have a family to feed and are trying to keep a roof over your head, on meager unemployment compesenation or some other modest sum of money (if you’re even that lucky), I think takes priority over the credit card/banking industry’s demands for repayment. I, therefore, don’t think that prospective job applicants should be penalized by HR people who have the good fortune to retain their jobs/income and keep up with their bill payments during the national economic crisis, only to look down their noses at those who were not so fortunate. If push came to shove and the shoe was on the other foot those HR people would surely rather be deliquent on credit card payments than opting to starve themselves and/or their children while living on the streets. Let’s have a little compassion and understanding here, which I think is the point of this bill. For the many people want to work and get back on their feet, bad credit shouldn’t be used to exclude them from the workforce. Besides, if people can’t get a job how will they ever be able to pay their debts? Creditors have the ability to garnish wages and their ability should be capped at 5 percent per payperiod, in my humble opinion.

And as for the credit card companies/banking industry are concerned, they have a lot of stinky nerve considering the billions of taxpayer dollars that were spent to bail them out.

“People with bad credit are more likely to steal, so employers have a right to know and mitigate risks in determining who to hire.”

That’s crap! Many people with good credit lie, steal/embezzle, and cheat/defraud all day and everyday. As a case in point the executives at Enron or Bernie Madoff, to name a couple. I’m sure all had good credit, but as it turns out they were as dirty and crooked as the day is long.

“people with bad credit are more susceptible to engaging in espionage or other criminal acts beyond theft.”

yeah, the cold war is over. was it better that in the 1980s U.S. military personnel who engaged in espoinage did so as a result of being tempted sexually by Russian/KGB women? But I’m sure the U.S. military personnel all had good credit. Wonderful. Yet, they still sold the U.S. out for a cheap thrill.

The whole credit system in this country is a dirty, rotten scam!

Comment by Will County Woman Wednesday, Aug 11, 10 @ 11:53 am
Great law! Important for economic recovery.

Will this improve poor unemployment levels?

We have to give people chances to recover after they’ve had hard times. So many young people have credit issues and just want the chance to improve their circumstances.

Comment by The Mighty Swan Wednesday, Aug 11, 10 @ 12:07 pm
==Does that mean we shouldn’t read the Tribune because it has bad credit?==

Or maybe it means we shouldn’t credit their opinions?

Comment by Wensicia Wednesday, Aug 11, 10 @ 12:11 pm
Good law. There is no evidence poor credit relates to poor job performance. This should help protect those who need it most.

Comment by enough is enough Wednesday, Aug 11, 10 @ 12:15 pm
Bad law. If the employer thinks your credit score is relevant to the question of hiring you, who is any outsider to question the employer’s judgment? If the worthlessness of the credit score is so apparent, why are employers bothering?

Comment by Pat Robertson Wednesday, Aug 11, 10 @ 12:17 pm
Good law. Without it we’re effectively creating an underclass of about half the population. Real hourly wages in the US peaked in 1972; since then, people have worked around the decline in pay, first through women entering the workforce during the 1970s, and then as the decline accelerated in the 1980s, reducing savings rates and living hand-to-mouth. And credit laws have become far more draconian, particularly on student loans which now endanger a huge proportion of the population.

The comparison with landlords is completely disingenuous, unless of course you believe that employment contracts should take the form of indentured servitude — then the comparison would make sense as you’d effectively be contracted to pay your alleged employer.

Comment by Angry Chicagoan Wednesday, Aug 11, 10 @ 12:22 pm
Good law. 2 main reasons: 1. Credit Reporting industry is getting out of hand trying to create it’s own self-serving market, e.g., “free credit report.com” which is a scam to get people to sign up for credit report service so Credit Report Companies make money off the public. At same time they are marketing credit reports to employers and others trying to expand the market of the reports and make money off these new areas that have never used them before; 2. Credit reports are getting more and more sloppy and unreliable rather like the Bond Rating agencies that were giving all the securitized mortgage bond packages triple AAA’s when they were really crap. If you’ve ever tried to correct your credit report mistakes or had identity theft, you know how incompetent these Big Three are and how different they can be. So, this bill protects employers and consumers from being hoodwinked to buy credit reporting services neither really needs.

Comment by D.P. Gumby Wednesday, Aug 11, 10 @ 12:32 pm
Very good law.

One reason is there are often mistaken identities and people can find themselves denied a job because another person’s credit rating is assigned to them.

Another issue is one of the biggest reasons people go bamkrupt and have major financial problems is medical bills. So if someone has a spouse or child with an expensive illness, they end up with a bad credit score and a hard time finding a job.

Likewise as pointed out by others, it creates a category of people who can never really find work.

The law rightfully makes some exceptions for some industries such as banking where it could be an issue.

Comment by Objective Dem Wednesday, Aug 11, 10 @ 12:45 pm
Unnecessary but sure sounds real good law.

“Supporters say the move is aimed at preventing employers from turning away job seekers due to poor credit amid an economic crisis that has left many unemployed and struggling to pay the bills.”

What isn’t happening sure does sound scarey!! Thank goodness we have a new law that “aims” to prevent it.

What other scarey notions can we develop and pass legislation to prevent?

Comment by KeepSmiling Wednesday, Aug 11, 10 @ 12:48 pm
Good law.

Employee screening into private matters unrelated to abilty or capability to perform the job at hand are unwarranted and should be stopped.

I wonder if those who support credit checks by employers beofre hiring would support credit chekcs by the Govt bfore issueing a business license, driver license, consruction permits etc….

for you slippery slope folks, lets ride the slope to employer invasion of privacy. Perhps we could look at whether people have been divorced, or require all employees to wear trackers so if they visit any locations in their of hours the employer does not approve of they can be fired, maybe som web cams at home to make sure tey are living the kind of life the employer wants…. perhaps we should check religious beleifs, who they voted for etc…

Comment by Ghost Wednesday, Aug 11, 10 @ 12:50 pm
Libertarians would say that this law interferes by having the government take a roll between two individuals in a private transaction.

Civil liberties types would say it protects the individual’s privacy.

I say Meh. This law is a the very fringes of importance, but does provide another good opportunity for the Governor’s media staff.

Comment by Cincinnatus Wednesday, Aug 11, 10 @ 1:14 pm
Probably a bad law, there are not too many employers who are going to turn down the candidate they want because his credit has taken a slight bump due to the economy. What employers are looking for is the candidate’s long term decision making and any red flags. If some of these legislators actually hired people (other than just putting people on the government payroll) they would know that.

Comment by Ahoy Wednesday, Aug 11, 10 @ 1:21 pm
I think the new law is ill advised. It seems to be trying to ascribe “protected class” status to people who have credit problems. I don’t believe that “credit problems” rise to the same level as “sex, national origin, sexual preference, or religion” as factors for which discrimination should be prohobited. just my opinion.

Comment by One of the 35 Wednesday, Aug 11, 10 @ 1:24 pm
I would agree with the law if employers were simply looking at your score but they have access to the details. They can pretty much tell if credit problems are a result of medical bills or problems that started soon after a job termination. Therefore I think the law is not necessary.
As a side note, I think it’s interesting that insurance companies no longer use your driving record to determine insurability or how much you can afford to pay…they look at your credit report.

Comment by casual observer Wednesday, Aug 11, 10 @ 1:44 pm
==One reason is there are often mistaken identities and people can find themselves denied a job because another person’s credit rating is assigned to them.==

Bingo! I have common name, and I have learned to get the free yearly reports just to challenge the stuff that gets on there that I didn’t do. Good law.

Comment by Cheryl44 Wednesday, Aug 11, 10 @ 1:57 pm
The answer to the question of the day, my friend, is blowing in the wind. The answer is blowing in the wind.

Comment by Old Milwaukee Wednesday, Aug 11, 10 @ 1:59 pm
Bad law, good intent. How many acutally use this method? This is a way for them to learn about behavior patterns of potential employees.

Comment by Wumpus Wednesday, Aug 11, 10 @ 2:39 pm
My politics say it should be a bad law but personal experience say good law. My troubled sister tried to no avail to get a job after cleaning up her act but employers, like target and walmart, said no way because of her credit score. she made mistakes but needed a break to get back on her feet. where do folks go? finally someone took a chance and now she has a full time job.

Comment by middle of the road Wednesday, Aug 11, 10 @ 2:56 pm
Bad law and probably not Constitutional. Why cannot I not enter into a contract with an employee under any terms I choose too. The “bad times” thing is stupid. It all comse out in the wash. If I have two equal candidates and one has a credit score of 780 and one has a credit score of 460 I can’t consider the guy with the 780 could have a more stable lifestyle or be more reliable.

This is what happens when you have people running the government that have never had a private sector job where you either do a good job or you get fired. Of cours Pat Quinn signed the bill, he has never had a job where he had to actually answer for his actions. Unless you count reporting to Rod.

Comment by the Patriot Wednesday, Aug 11, 10 @ 3:54 pm
There needs to be exceptions to the law. Credit checks are routinly done for people who handle money, Accountants, Accounts Receivable positions, Banking positions, and other positions where money, checks, etc are handled.

For non financial positions this is a good thing.

Comment by Third Generation Chicago Native Wednesday, Aug 11, 10 @ 4:36 pm
Weak law. Banks and insurance companies are exempt?!! Weren’t these the same industries that first laid off millions of workers, then accepted billions in TARP money funded by the very people they laid off? How is this fair to the people who built their careers in insurance and finance? This law must be amended

Comment by anon Wednesday, Aug 11, 10 @ 5:42 pm
“Banks and insurance companies are exempt?!”

That’s because those jobs involve directly handling other people’s money, and there is a risk that someone having severe financial difficulties might be tempted to dip into it or manipulate it for their own benefit. That seems reasonable enough to me.

I’m of kind of two minds on this. For jobs that DO NOT involve handling company or customer funds, I think it would be OK to use a full credit report (so you can see all the information involved, not just a credit score) as ONE consideration in hiring, but to use it as a screening tool — for example, deciding that anyone with a credit score below 600 automatically will not be considered — would not be fair.

Comment by Bookworm Thursday, Aug 12, 10 @ 6:13 am
Bookworm: Make criminals out of people that haven’t committed a crime because you ASSume they MIGHT be tempted? Guilty until proven innocent? So the family that goes into financial distress because of layoffs or a very sick child should be lumped into the likes of Bernie Madoff (who had great credit, by the way)? There are no statistics to support what you ASSume. None.

Comment by anon Thursday, Aug 12, 10 @ 10:26 am
Definitely a good law. If you want to know whether someone is a thief, run a criminal background check, not a credit check. A credit check will just tell you if someone is broke, and who’s not broke right now?

Comment by Fed up Thursday, Aug 12, 10 @ 11:56 am