On February 15, 2017, D.C. Mayor Muriel Bowser signed into law the Fair Credit in Employment Amendment Act of 2016. This law, known as the FCEAA, essentially prohibits all employer efforts to inquire into or use an applicant or employee’s credit history, with a few limited exceptions. The FCEAA will take effect after the expiration of the 30-day period of congressional review.
The Act modifies the D.C. Human Rights Act (DCHRA) to add an “employee’s credit information” to the list of characteristics protected from discrimination by the DCHRA. The FCEAA applies broadly to employers of at least one person, and protects applicants and employees alike who work or apply to work in the District if the conduct occurs and has effect in D.C.
Under the FCEAA, an employer cannot (1) directly or indirectly require, request, suggest, or cause an applicant or employee to submit credit information, or (2) use, accept, refer to, or inquire into an applicant or employee’s credit information. “Credit information” means any written, oral, or other communication of information bearing on an employee’s creditworthiness, credit standing, credit capacity, or credit history. “Inquire” means any direct or indirect conduct intended to gather credit information using any method, including application forms, interviews, and credit history checks.
Violations can result in a lawsuit by an aggrieved applicant or employee, and in the levying of substantial fines by the D.C. Commission on Human Rights.
The FCEAA has several limited exceptions, which allow inquiry into credit information:
- Where District law requires it;
- Where an employee is applying for a position as or is employed as a Metropolitan Police Officer, a special police officer, or a campus police officer;
- Where an employee is applying to the D.C. Office of the Chief Financial Officer;
- Where an employee is required to possess a security clearance under District law;
- For required disclosures by D.C. government employees to the Board of Ethics and Government Accountability or the Office of the Inspector General;
- By financial institutions, where the position involves access to personal financial information; or
- Where an employer requests or receives credit information pursuant to a lawful subpoena, court order, or law enforcement investigation.
Even where one of these exceptions apply, the employer will still need to comply with the terms of the federal Fair Credit Reporting Act (FCRA). The FCRA typically requires, among other things, that the employer provide an appropriate written disclosure of rights and obtain an advance written authorization prior to obtaining a credit report concerning an employee or applicant.