Job Applicant Fairness Act (FAQs)- Employment Standards Service (ESS)

What is the Job Applicant Fairness Act?
Does the law apply to all employers?
Are there any circumstances in which an employer covered by the law may consider my credit history?
For what kind of job positions is a job applicant or employee's credit report or credit history substantially job-related?
How will I know if an employer has used my credit report or credit history?
What should an applicant or employee do if they believe that their credit report or credit history has been used in violation of this law?

What is the Job Applicant Fairness Act?
Does the Job Applicant Fairness Act apply to all employers?
If I am an employer covered by the law, are there any circumstances in which I may consider a job applicant's credit report or credit history?
What would be a bona fide purpose that is substantially job-related for an employer to request or use information in a credit report or credit history?
If I am an employer covered by the law, do I need to give a job applicant or employee notice that I am requesting their credit report or credit history?

What happens after a complaint has been filed?
Is there an appeal procedure for an employer who receives an order to pay the civil penalty?
What if after the administrative hearing, the employer fails to pay a final order to pay a civil penalty?
Who should I contact if I would like additional information?

I. FOR EMPLOYEES AND JOB APPLICANTS

1. What is the Job Applicant Fairness Act?
The Job Applicant Fairness Act generally prohibits employers in Maryland from using a job applicant or employee's credit report to determine: (1) whether to hire a job applicant; (2) whether to terminate an employee; or (3) the rate of pay or other conditions of employment for an employee.

2. Does the law apply to all employers?
No. The law does not apply to:

Employers who are required by State or Federal law to consider an applicant or employee's credit report or credit history for the purpose of employment.
Financial institutions that accept deposits that are insured by a Federal agency or an affiliate or subsidiary of that financial institution. For example, most banks have notices on their doors, letterhead, and websites that say "FDIC insured" or "member FDIC." In practical effect, this means most banks and publicly insured credit unions are excluded.
A credit union share guaranty corporation which is otherwise known as a privately insured credit union that is approved by the Maryland Commissioner of Financial Regulation. All privately insured credit unions are required by law to provide notice that they are privately insured on the door of the building and on their letterhead.
Employers and entities registered as investment advisors with the United States Securities and Exchange Commission ("SEC"). To determine if an employer is registered as an investment advisory with the SEC, you may search the SEC's investment advisor public disclosure website.

3. Are there any circumstances in which an employer covered by the law may consider my credit history?
Yes. An employer covered by the law may use an employee or job applicant's credit history or credit report in the following limited circumstances.

An employer may use a credit report or credit history when a job applicant has already been offered the job and the credit report will not be used to determine the job applicant's pay or other terms and conditions of employment.
An employer may use a job applicant or employee's credit report or credit history if the employer has a bona fide reason for requesting or using the information that is substantially job-related and disclosed in writing to the employee or applicant.

4. For what kind of job positions is a job applicant or employee's credit report or credit history substantially job-related?
The law provides some examples of job positions for which an employer may have a bona fide, substantially job-related purpose for using an employee or job applicant's credit report or credit history:

A position that is managerial that sets the direction and control of a business, department, division, unit or agency of a business;
A position that has access to personal information of a customer, employee or employer. Personal information includes an individuals' first name or first initial and last name in combination with a social security number, driver's license number, financial account number, individual taxpayer identification number. Personal information does not include personal information customarily provided in a retail transaction;
A position that involves a fiduciary responsibility to the employer such as the authority to issue payments, collect debts, transfer money or enter into contracts;
A position with an expense account or a corporate debit or credit card;
A position that has access to information such as formulas, programs, methods, techniques or processes that derive independent economic value, whether actual or potential that the employer maintains confidentiality on; or
A position that has access to confidential business information.

5. How will I know if an employer has used my credit report or credit history?
The law requires that an employer notify you in writing if they use your credit report or credit history for a bona fide purpose that is substantially job-related.

Please be aware that the Federal Fair Credit Reporting Act also requires many employers to notify a job applicant or employee if they want to use their credit report for employment purposes and to get the permission of that job applicant or employee before doing so. The Fair Credit Reporting Act also requires covered employers to notify a job applicant or employee if they are taking an "adverse action" against them based on their credit report or credit history. For more information regarding your rights under the Federal Fair Credit Reporting Act, contact the Federal Trade Commission, or contact the Consumer Response Center of the Federal Trade Commission.

6. What should an applicant or employee do if they believe that their credit report or credit history has been used in violation of this law?
An applicant or employee may file a written complaint with the Commissioner of Labor and Industry and describe in detail the nature of the claim with any supporting documents. Download the Credit Check Complaint form (Word), Queja de Informe de Crédito (Word) .

II. FOR EMPLOYERS

2. Does the Job Applicant Fairness Act apply to all employers?
No. The law does not apply at all to:

Employers who are required by State or Federal law to consider an applicant or employee's credit report or credit history for the purpose of employment.
Financial institutions that accept deposits that are insured by a Federal agency or an affiliate or subsidiary of that financial institution. In practical effect, this means most banks and publicly insured credit unions.
A credit union share guaranty corporation, otherwise known as a privately insured credit union, that is approved by the Maryland Commissioner of Financial Regulation. All privately insured credit unions are required by law to provide notice that they are privately insured on the door of the building and on their letterhead.
Employers and entities are registered as investment advisors with the United States Securities and Exchange Commission ("SEC"). To determine if an employer is registered as an investment advisory with the SEC, you may search by the SEC's investment advisor public disclosure website.

3. If I am an employer covered by the law, are there any circumstances in which I may consider a job applicant's credit report or credit history?
Yes. An employer may request or use a job applicant's credit report or credit history under two limited circumstances:

First, an employer may request or use a job applicant's credit report or credit history if the applicant has (a) received an offer of employment; and (b) the credit report will not be used to deny employment or to determine compensation or the terms and conditions of employment.
Second, an employer may request or use a job applicant's credit report or credit history if the employer has a bona fide purpose for requesting or using the information that is substantially job-related and disclosed in writing to the applicant.

4. What would be a bona fide purpose that is substantially job-related for an employer to request or use information in a credit report or credit history?
The law provides some examples of job positions for which an employer may have a bona fide substantially job-related purpose for using an employee or job applicant's credit report or credit history:

A position that is managerial that sets the direction and control of a business, department, division, unit or agency of a business;
A position that has access to personal information of a customer, employee or employer. Personal information includes an individuals' first name or first initial and last name in combination with a social security number, driver's license number, financial account number, individual taxpayer identification number. Personal information does not include personal information customarily provided in a retail transaction;
A position that involves a fiduciary responsibility to the employer such as the authority to issue payments, collect debts, transfer money or enter into contracts;
A position with an expense account or a corporate debit or credit card;
A position that has access to information such as formulas, programs, methods, techniques or processes that derive independent economic value, whether actual or potential that the employer maintains confidentiality on; or
A position that has access to confidential business information.

Employers are cautioned that the substantially job-related exception should be treated with care and interpreted narrowly. For example, a job applicant or employee's credit history is not substantially job-related to a position that only involves possible or incidental exposure to personal financial information, such as in the case of a housekeeper, receptionist, clerk, or building custodian. In contrast, a job applicant or employee's credit information may arguably be substantially job-related if an essential function of a position involves handling highly confidential financial information, such as in the case of a building manager who routinely reviews financial statements of potential renters, or an accountant or tax preparer.

5. If I am an employer covered by the law, do I need to give a job applicant or employee notice that I am requesting their credit report or credit history?
The Job Applicant Fairness Act requires employers to provide job applicants or employees with written notice if they use their credit report or credit history for a bona fide, substantially job-related purpose.

In addition, employers should also be aware that the Federal Fair Credit Reporting Act contains various requirements for employers to follow, including that job applicant or employee give permission before obtaining a copy of their credit report or credit history. The Federal Fair Credit Reporting Act also requires covered employers to notify a job applicant or employee if they are taking an "adverse action" against them based on their credit report or credit history. For more information regarding your obligations under the Federal Fair Credit Reporting Act, contact the Federal Trade Commission, or call the Consumer Response Center of the Federal Trade Commission.

III. GENERAL GUIDANCE

1. What happens after a complaint has been filed?
The Commissioner of Labor and Industry will conduct an investigation. If the Commissioner determines that the employer has willfully or negligently violated this law, the Commissioner will work to resolve the matter informally.

If the Commissioner is unable to resolve the matter informally, the Commissioner may assess a civil penalty of up to $500 for the first violation and up to $2,500 for subsequent violations. The Commissioner will send an order to pay the civil penalty to the individual who filed the complaint and the employer.

2. Is there an appeal procedure for an employer who receives an order to pay the civil penalty?
Within 30 days of receiving an order to pay a civil penalty, the employer may file a written request with the Commissioner of Labor and Industry for an administrative hearing.

3. What if after the administrative hearing, the employer fails to pay a final order to pay a civil penalty?
The Commissioner of Labor and Industry or the individual who filed the complaint may bring an action in circuit court to enforce the final order to pay a civil penalty.

4. Who should I contact if I would like additional information?
For additional information, contact the Employment Standards Service within the Division of Labor and Industry at (410) 767-2357 or e-mail.

Back to the top

For additional information, contact:
Maryland Department of Labor
Division of Labor and Industry
Employment Standards Service
10946 West Golden Drive, Suite 160
Hunt Valley, Maryland 21031
410-767-2357
e-mail: dldliemploymentstandards-labor@maryland.gov
Ayuda en Español: 410-767-2387, 410-767-2186, 410-767-2384, or 410-767-2371