2012 -- S 2727

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LC01833

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO LABOR AND LABOR RELATIONS -- FAIR EMPLOYMENT PRACTICES

     Introduced By: Senators Pichardo, Ruggerio, Goodwin, Metts, and Perry

     Date Introduced: March 06, 2012

     Referred To: Senate Judiciary

It is enacted by the General Assembly as follows:

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     SECTION 1. Chapter 28-5 of the General Laws entitled "Fair Employment Practices" is

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hereby amended by adding thereto the following section:

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     28-5-7.4. Job applicant's credit history. – (a) This section does not apply to an

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employer that is:

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     (1) Required to inquire into an applicant’s or employee’s credit report or credit history

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under federal law or any provision of state law for the purpose of employment;

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     (2) A financial institution that accepts deposits that are insured by a federal agency, or an

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affiliate or subsidiary of the financial institution;

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     (3) A credit union the share guaranty corporation that is approved by the banking division

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of the department of business regulation; or

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     (4) An entity, or an affiliate of the entity, that is registered as an investment advisor with

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the United States Securities and Exchange Commission.

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     (b) Except as provided in subsection (c) of this section, an employer may not use an

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applicant’s or employee’s credit report or credit history in determining whether to:

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     (1) Deny employment to the applicant;

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     (2) Discharge the employee; or

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     (3) Determine compensation or the terms, conditions, or privileges of employment.

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     (c)(1) An employer may request or use an applicant’s or employee’s credit report or

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credit history if:

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     (i) The applicant has received an offer of employment; and

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     (ii) The credit report or credit history will be used for a purpose other than a purpose

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prohibited by subsection (b) of this section; or

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     (iii) The employer has a bona fide purpose for requesting or using information in the

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credit report or credit history that is:

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     (A) Substantially job-related; and

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     (B) Disclosed in writing to the employee or applicant.

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     (2) For the purposes of this subsection, a position for which an employer has a bona fide

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purpose that is substantially job-related for requesting or using information in a credit report or

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credit history includes a position that:

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     (i) Is managerial and involves setting the direction or control of a business, or a

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department, division, unit, or agency of a business;

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     (ii) Involves access to personal information as defined in subdivision 6-52.1(3) of a

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customer, employee, or employer, except for personal information customarily provided in a

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retail transaction;

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     (iii) Involves a fiduciary responsibility to the employer, including the authority to issue

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payments, collect debts, transfer money, or enter into contracts;

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     (iv) Is provided an expense account or a corporate debit or credit card; or

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     (v) Has access to:

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     (A) Information, including a formula, pattern, compilation, program, device, method,

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technique, or process, that:

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     (I) A derives independent economic value, actual or potential, from not being generally

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known to, and not being readily ascertainable by proper means by, other persons who can obtain

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economic value from the disclosure or use of the information; and

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     (II) Is the subject of efforts that are reasonable under the circumstances to maintain its

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secrecy; or

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     (B) Other confidential business information.

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     (d)(1) If an employer violates subsection (b) of this section, the applicant or employee

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may file a written complaint with the Rhode Island commission for human rights, hereinafter

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referred to as the “commission”.

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     (2) If the commission receives a written complaint under subdivision (1) of this

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subsection, the commission shall investigate the matter promptly.

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     (3) If the commission determines that the employer has willfully or negligently violated

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subsection (b) or (c) of this section, the commission shall try to resolve the matter informally.

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     (4) If the commission is unable to resolve the matter informally, the commission may:

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     (i) Assess a civil penalty of:

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     (A) Up to five hundred dollars ($500) for an initial violation of subsection (b) or (c) of

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this section; or

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     (B) Up to two thousand five hundred dollars ($2,500) for a repeat violation of subsection

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(b) or (c) of this section; and

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     (C) Send an order to pay the civil penalty to the complainant and the employer.

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     (5) Within thirty (30) days after an employer receives an order to pay a civil penalty the

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employer may request a de novo administrative hearing pursuant to this chapter.

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     (i) On receipt of a request for a hearing, the commission shall schedule a hearing.

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     (ii) If a hearing is not requested, the order to pay a civil penalty becomes a final order of

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the commission.

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     (e) This section may not be construed to prohibit an employer from performing an

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employment-related background investigation that:

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     (1) Includes use of a consumer report or investigative consumer report;

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     (2) Is authorized under the federal fair credit reporting act; and

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     (3) Does not involve investigation of credit information.

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     SECTION 2. This act shall take effect on December 1, 2012.

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LC01833

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO LABOR AND LABOR RELATIONS -- FAIR EMPLOYMENT PRACTICES

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     This act would prevent a prospective employer from using or requesting a job applicant’s

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credit report history unless certain conditions or circumstances are met.

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     This act would take effect on December 1, 2012.

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LC01833

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