Ban credit history in employment decisions?
For several years New Hampshire lawmakers have debated bills to limit employers’ use of credit history.
Gov. Sununu vetoed a 2019 bill that would ban the use of credit history in employment decisions. The bill included exceptions for some employers, including banks.
The House passed a similar bill in 2020, HB 1221. The bill died after the Legislature shutdown due to the coronavirus.
The economic impacts of the coronavirus may prompt the Legislature to reconsider the issue in 2021.
Arguments to limit the use of credit history
For supporters, credit history is private information and should stay private unless an employee is very involved in financial transactions. There are many reasons people struggle to repay debt, so credit history is not a clear indicator of a person’s reliability or honesty.
HB 1221 would still allow employers to consider credit history if the employee works in finance, has a corporate expense account, is in a management position, etc.
Bad credit may become a more common problem in the wake of the coronavirus. New Hampshire unemployment was 8% in July 2020. Congress has yet to agree on another financial relief package.
Employers argue against limits
Opponents of HB 1221 and similar bills argue that the bills do not have enough exceptions for employers. When Gov. Sununu vetoed a similar bill in 2019, he wrote:
“Employers should be able to appropriately take steps to limit risk in some of the most sensitive and vital operations of their businesses. This bill would remove a tool used to reduce the risk of fraud or theft.”
While the coronavirus has undoubtedly hurt the economy, there have been many programs aimed at helping financially distressed families, from a moratorium on evictions to direct cash payments. If a person is still challenged to repay debt, they can explain that to an employer.
Comments
Login or register to post comments