Governor Brian Sandoval of Nevada passed Senate Bill 127 into law on May 25, 2013, restricting the use of consumer credit information for employment purposes. The bill will go into effect on October 01, 2013.
Senate Bill 127 enacts several restrictions on the use of consumer credit information for employment purposes in Nevada, including that an employer cannot request or require any employee or prospective employee to submit to a consumer credit report or to provide other credit information. It also restricts employers from using, accepting, or referring to consumer credit information, and prohibits employers from disciplining, discharging, or discriminating against employees who refuse, decline, or fail to submit to a consumer credit report. Employers should refer to Section 7 of Senate Bill 127 for a full list of restrictions.
However, the legislation provides several exceptions for employers, and states that employers may request and/or use a consumer’s credit report for employment purposes if the employer meets certain criteria, as outlined in Section 7.5 below:
- The employer is required or authorized, pursuant to state or federal law, to use a consumer credit report or other credit information for that purpose;
- The employer reasonably believes that the employee or prospective employee has engaged in specific activity which may constitute a violation of state or federal law; or
- The information contained in the consumer credit report or other credit information is reasonably related to the position for which the employee or prospective employee is being evaluated for employment, promotion, reassignment or retention as an employee. The information in the consumer credit report or other credit information shall be deemed reasonably related to such an evaluation if the duties of the position involve:
(a) The care, custody and handling of, or responsibility for, money, financial accounts, corporate credit or debit cards, or other assets;
(b) Access to trade secrets or other proprietary or confidential information;
(c) Managerial or supervisory responsibility;
(d) The direct exercise of law enforcement authority as an employee of a state or local law enforcement agency;
(e) The care, custody and handling of, or responsibility for, the personal information of another person;
(f) Access to the personal financial information of another person;
(g) Employment with a financial institution that is chartered under state or federal law, including a subsidiary or affiliate of such a financial institution; or
(h) Employment with a licensed gaming establishment, as defined in NRS 463.0169.
Any Nevada employers that are in violation of Senate Bill 127 may face administrative penalties from the Nevada Labor Commissioner of up to, but not more than, $9,000 per violation. Employers who violate the bill may also be subject to lawsuits from affected employees, or prospective employees, and as decided by the court, may be liable for lost wages and benefits to the employee, as well as employment of a prospective employee, and reinstatement or promotion of an existing employee.
Nevada is now the tenth state to have passed legislation restricting the use of consumer credit information for employment purposes. Other states with similar legislation include California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont, and Washington.
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