Regular Session 2023-2024 House Bill 2207 P.N. 2970

PRIOR PRINTER'S NO. 2924

PRINTER'S NO. 2970

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

2207

Session of

2024

INTRODUCED BY BOYD, GIRAL, KHAN, SAMUELSON, McANDREW,

SCHLOSSBERG, SMITH-WADE-EL, McNEILL, NEILSON, HOHENSTEIN,

HILL-EVANS, HOWARD, CERRATO, SANCHEZ, WARREN, CONKLIN,

WAXMAN, DALEY, DELLOSO, SCOTT, YOUNG AND GREEN,

APRIL 11, 2024

AS REPORTED FROM COMMITTEE ON LABOR AND INDUSTRY, HOUSE OF

REPRESENTATIVES, AS AMENDED, APRIL 17, 2024

AN ACT

Prohibiting employers from conducting credit check histories on

employees and prospective employees JOB APPLICANTS;

establishing the Employment Credit Check Prohibition

Enforcement Account; imposing duties on the Department of

Labor and Industry and the Secretary of Labor and Industry;

prescribing penalties; and establishing a private right of

action.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Short title.

This act shall be known and may be cited as the Credit Check

in Employment Prohibition Act.

Section 2. Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Account." The Employment Credit Check Prohibition

Enforcement Account established under this act.

<--

"Adverse employment action." A refusal to hire or a

discharge, demotion, suspension, retaliation or unlawful

discrimination against an employee or job applicant.

"Credit check history." A written, oral or other

communication of information by a consumer reporting agency that

bears on a consumer's creditworthiness, credit standing, credit

capacity, character, general reputation, personal

characteristics or mode of living.

"Department." The Department of Labor and Industry of the

Commonwealth.

"Employ." To engage, suffer or permit to work.

"Employee." An individual who:

(1) is employed by an employer;

(2) is not free from the control and direction of the

employer in connection with the performance of the work;

(3) does not perform work outside the usual course of

the employer's business; and

(4) is not customarily engaged in an independently

established trade, occupation or business of the same nature

as that involved in the work performed.

"Employer." The term includes the Commonwealth, its

political subdivisions and their instrumentalities or any

person, association, entity, organization, partnership, business

trust, limited liability company or corporation that directly or

indirectly, or through an agent or any other person, employs or

exercises control over the wages, hours or working conditions of

an employee.

"Employment purpose." Evaluating an employee or job

applicant for employment, hiring, promotion, demotion,

reassignment, adjustment in compensation, adjustment in benefits

20240HB2207PN2970 - 2 -

or retention as an employee.

"JOB APPLICANT." AN INDIVIDUAL WHO IS APPLYING WITH AN

EMPLOYER TO BECOME AN EMPLOYEE.

"Secretary." The Secretary of Labor and Industry of the

Commonwealth.

Section 3. Prohibiting credit checks in employment.

(a) General rule.--Except as provided in subsection (b), an

employer may not obtain or use information contained in a credit

check history for an employment purpose, including refusal to

hire, discharge, demote, suspend, retaliate or otherwise

discriminate against an employee with regard to promotion,

compensation or the terms, conditions or privileges of

employment. OR ADVERSE EMPLOYMENT ACTION.

(b) Exception.--Subsection (a) shall not apply to:

(1) An employer that is a federally insured bank,

savings bank, savings and loan association or credit union.

(2) An employer that is required by Federal, State or

local law or ordinance to use an individual's credit check

history for an employment purpose.

(3) The obtainment or use of information in the credit

check history of an employee OR JOB APPLICANT when the

information in the credit check history is substantially job-

related and the employer's reason for the use of the

information is disclosed in writing to the employee OR JOB

APPLICANT prior to the employer obtaining a credit check

history. The employer shall obtain consent from the employee

OR JOB APPLICANT to obtain a credit check history.

(1) An employer that is identified under subsection (b)

may not use an employee's OR JOB APPLICANT'S credit check

20240HB2207PN2970 - 3 -

<--

history as the sole factor in a decision regarding

employment, compensation or a term, condition or privilege of

employment.

(2) If the employer that is identified under subsection

(b) seeks to obtain or act upon an employee's OR JOB

APPLICANT'S credit check history, the employer shall:

(i) Disclose the reason for the use of the

information to the employee OR JOB APPLICANT.

(ii) Obtain the employee's OR JOB APPLICANT'S

written consent each time the employer seeks to obtain

the employee's OR JOB APPLICANT'S credit check history.

(iii) Not require the employee OR JOB APPLICANT to

pay for any cost associated with obtaining the employee's

OR JOB APPLICANT'S credit check history.

(iv) If an adverse employment action is taken based

in whole or in part upon the credit check history,

disclose the reason for the action in writing.

(3) The employer shall maintain the confidentiality of

the information contained in the employee's OR JOB

APPLICANT'S credit check history and, if the employment is

terminated or the job applicant is not hired, provide the

employee OR JOB APPLICANT with the credit check history or

have the credit check history destroyed in a secure manner

that ensures the confidentiality of the information in the

credit check history.

Section 4. Penalties.

(a) Duty of department.--The department shall establish a

system for adjudicating complaints received under this act. The

system shall be promulgated by the department through

regulations.

20240HB2207PN2970 - 4 -

<--

(b) Right to file complaint.--An employee OR JOB APPLICANT

may file a complaint with the department, on a form and in a

manner prescribed by the department, for an alleged violation of

this act.

violation of this act shall pay an administrative penalty of

$500 for each violation.

(d) Restricted account established.--The penalties collected

under this act shall be paid to the department and deposited

into a restricted account within the General Fund which shall be

known as the Employment Credit Check Prohibition Enforcement

Account. The money in the account is appropriated on a

continuing basis to the department for the purpose of

administering and enforcing this act.

Section 5. Enforcement powers of secretary.

The secretary may take any of the following actions under

this act:

(1) Enter and inspect a worksite or place of business at

any reasonable time to examine and inspect records that

relate to compliance with this act.

(2) Subpoena witnesses, administer oaths, examine

witnesses and copy or compel the production of records,

contracts and other documents that are necessary and

appropriate to the enforcement of this act.

(3) Petition the Commonwealth Court to enforce any

subpoena or order issued by the department under this act.

Section 6. Private right of action.

(a) General rule.--An employee OR JOB APPLICANT who received

an adverse employment decision ACTION based on a credit check

history in violation of this act, or has been discharged, been

20240HB2207PN2970 - 5 -

<--

threatened or has otherwise suffered retaliation, discrimination

or other adverse action as a result of participating in an

investigation or reporting a violation of this act, may bring an

action in a court of common pleas in accordance with established

civil procedures of this Commonwealth.

(b) Limitation.--An action under this section must be

brought within three years from the date that the employee OR

JOB APPLICANT knew of the violation, discharge, threat,

retaliation or discrimination.

under this section, the employee AN EMPLOYEE OR JOB APPLICANT

WHO PREVAILS IN AN ACTION BROUGHT UNDER THIS SECTION shall be

entitled to the following relief:

(1) Reinstatement of the employee without a loss in

seniority status, if applicable.

(2) Reasonable attorney fees and costs of the action.

(3) Other legal and equitable relief the court deems

appropriate.

Section 7. Construction.

Nothing in this act shall be construed to supersede or

preempt a local ordinance or regulation that prohibits an

employer from obtaining a credit check history or similar credit

worthiness report of an employee or prospective employee JOB

APPLICANT consistent with the provisions of this act.

Section 8. Effective date.

This act shall take effect in one year.

20240HB2207PN2970 - 6 -

<--