Employee Credit Privacy Act

Effective January 1, 2011, Public Act 96-1426 takes effect in Illinois. This Public Act is known as the Employee Credit Privacy Act (Act).


The Act prohibits discrimination in employment based on an employee credit history. Specifically, Section 10(a)(1) of the Act prohibits an employer from basing employment decisions (e.g. hiring, discharge) on the basis of an employee's credit history or credit report. Section 10(a)(2) and (3) of the Act prohibit an employer from inquiring about an applicant's credit history or ordering an applicant's credit report from a consumer reporting agency. An employer includes any person or entity that permits employment, that accepts applications for employment or is an agent of an employer, except the following entities:

  1. defined financial institutions authorized under Illinois or federal law;
  2. insurance or surety businesses pursuant to the Illinois Insurance Code;
  3. defined State of Illinois law enforcement or investigation units;
  4. any State or local governmental agency which requires the employee's or applicant's credit history; and
  5. debt collectors defined under federal or state law.

Exception - Bona Fide Occupational Requirement

Section 10(a) does have an exception. Section 10(b) of the Act allows inquiries into an applicant's or employee's credit history if such inquiry is an "established bona fide occupational requirement." Section 10(b) sets forth seven examples where one's history can meet with this requirement:

  1. bonding requirements under state or federal law for the individual;
  2. the employment position includes custody or access of cash or marketable assets valued at $2,500 or more;
  3. the employment position includes signatory power of business assets of $100 or more;
  4. the employment position is a managerial one requiring setting the direction or control over the business;
  5. the employment position involves access to personal or confidential information, financial information, trade secrets or state of national security information;
  6. the position meets criteria established by the U.S. Department of Labor or Illinois Department of Labor where one's credit history is a "bona fide occupational requirement"; or
  7. the credit history is required by or exempt under federal or state law.


Section 15 of the Act prevents retaliation against an applicant or employee who:

  1. files a complaint under the Act;
  2. testifies, assists or participates in an investigation, proceeding or action concerning a violation of the Act; or
  3. opposes a violation of the Act.


Section 25(a) of the Act allows a person who is injured by the Act to file a civil action seeking injunctive relief, money damages or both. Section 25(b) of the Act allows such person to recover his attorney's fees and costs if that person prevails in such a civil action.

Waiving the Act

Section 20 of the Act prevents an employer from requiring an employee to waive his rights under the Act. If such an agreement is entered into, it is void.

Background Investigations

Section 30 of the Act provides that it does not prohibit employers from obtaining background investigations or investigative reports as long as to the information does not include credit histories.

View of the Act

The first item to be concerned with is who is defined as an "employer" under the Act. The Act encompasses the typical employing unit, but also includes persons accepting employment applications an agents of an employer. Thus, not only could the employing unit be liable, but also an agent, such as someone in the human resources department for instance.

The next step is to determine if the employer is exempt under Section 1. If so, there is no need to worry about the Act.

The next issue is whether the Act differentiates between an "employee" and "independent contractor." For instance, Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e) provides for an "employee," and courts have excluded those who fall into the classification of an "independent contractor." When faced with this issue under the Act, courts will likely use the same factors when determining if any employment relationship exists as opposed to an independent contractor.

If coverage exists under the Act for an employer, the next step is determining if a "bona fide occupational requirement" (BFOR) exists. A BFOR exists if:

  1. state or federal law requires the employee to be bonded;
  2. the employee has access to inventory or other marketable property of $2,500 or more (e.g. warehouse workers, logistics operations, retail stores);
  3. signing authority of $100 or more (e.g. bookkeeper, accounts payable, payroll supervisor);
  4. managerial authority;
  5. employee access to trade secrets, social security numbers, taxpayer identification numbers, birth dates, financial account numbers, profits and loss statements, tax returns;
  6. administrative rules at the state or federal level so provide; and
  7. the employee's or applicant's credit history is exempt under state or federal law. Items 2 through 5 are provisions on which employers should focus their attention. Virtually every business has information in item 5 so arguably every employee could excepted from the Act. At that point, the Act becomes rather toothless in what it proscribes.

Retaliation under Section 15 of the Act should also be a concern. Any person can be held liable, not just the employer. Thus, a manager who fires a subordinate for invoking his rights under the Act is subject to liability. This is similar to the anti-retaliation provision under the Illinois Human Rights Act. Section 7(1) speaks to one who "file[s] a complaint under the Act." Section 7(2) prohibits retaliation based on participation. If a co-worker testifies in aid of one who was fired because that person complained of behavior that violated the Act, the co-worker would be protected. Section 7(3) prevents retaliating against those who oppose conduct that violates the Act. The conduct need not be directed against that person, but could be directed at opposing conduct perpetrated against others. Anti-retaliation provisions like this one are common in other non-discrimination statutes and the body of law in those areas is well-developed.

Section 25 allows for injunctive relief and money damages. Thus, if an employee is terminated, he could seek back pay (viz. lost earnings from the date of termination to the date of judgment) as well as front pay (viz. earnings that could have been earned in the future minus any interim earnings). If an employee suffers emotional or psychological harm, the employee could recover compensatory damages as well. Such damages would include past medical expenses, future medical expenses, past pain and suffering and future pain and suffering. Section 25 makes no express mention about a remedy seen in Title VII, which is reinstating the employee to the position previously held. Reinstatement is an alternative to awarding front pay. One could argue that reinstatement is not allowed since it is not expressly provided for under the Act. This is in contrast to section 8A-104(c) of the IHRA (775 ILCS 5/8A-104) which expressly mentions reinstatement.

If you have questions about this Act or other labor/employment matters, please contact Don Rothschild: (630) 655-6000.

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