Devoted to Corporate Attorneys, Corporate Lawyers, and Corporate Counsel

The following is not meant to be legal advice.

On April 18, 2007, a new law in Washington was signed.  This law will go into effect on July 22, 2007. The law restricted an employer from using credit reports unless the information is substantially related to the job in question or required by law.

Washington joins other states such as Hawaii, Pennsylvania, Wisconsin, and New York which have statutes requiring employers to consider whether the information on a background check or credit check is related to the job in question before taking an adverse employment action against the potential employee for not having a good credit rating or proper background.

Under the law, a person may not procure a consumer report for employment purposes where any information contained in the report bears on the consumer’s credit worthiness, credit standing, or credit capacity, unless the information is either: (i) substantially job related and the employer’s reasons for the use of such information are disclosed to the consumer in writing; or (ii) required by law.