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Legislators in Massachusetts are considering a proposed bill that would disallow credit reports for employment purposes.

H.1434

A proposed bill in Massachusetts titled An Act Reducing Barriers To Employment Through Credit Discrimination, also known as H.1434 could prohibit employers from running credit reports as part of a background check. The goal of this bill is to prevent potential discrimination based on a person’s credit history and therefore reduce barriers to employment.

If the Act is signed into law, then it will not be permissible to:

• Use a consumer report in connection with or as a criteria for an employment reasons.
• Request or procure a consumer report for employment purposes.
• Require an employee or applicant to answer a question about the contents of a credit report or the information contained in it regarding credit worthiness, standing or Fcapacity.

H.1434 was approved by the Senate and is expected to be signed by Governor Maura Healy. If so, it will go into effect on January 1, 2025.

Exceptions

H.1434 includes some exceptions. Specifically, it says employers may request credit reports if:

• They are required to run them by federal or state law or regulation or the rules of a self-regulatory organization.
• An employee or applicant applies for or holds a position that requires national security clearance.

Nothing Prohibits Screenings

H.1434 specifies the proposed law only covers credit reports. Employment background checks would continue to be permissible. The Act states that it would not prohibit the use of consumer reports by a person or entity for employment purposes, unless doing so is otherwise prohibited by law.

Customizable Background Checks

Most background checks do not include credit reports. They are typically added when applicants would have direct access to financial assets. Employers often rely on them when recruiting various positions such as bank tellers, inventory managers or financial advisors.

Background check packages can be fully customized based on the needs of any business as well as applicable laws and industry regulations. If your organization is bringing on employees, contractors and volunteers, please contact us to discuss how we can help.

Our friendly and knowledgeable team can help you build screening packages for any type of position. We make it easy to get the data you need to make informed decisions, maintain safe workplaces and conduct due diligence efforts. Backgrounds Online is based in California and we’re available to assist you Monday through Friday from 5am to 6pm PT.