S 2324Labor Relations

Labor and Labor Relations - Consumer Credit History Employment Protection Act - Deceptive Trade Practices

Employers are banned from using credit checks for hiring, except for specific security or financial management roles.

Held for study

Population
Affected

Introduced Jan 23, 2026Committee Senate Labor & Gaming

Plain-English Summary

This bill prohibits employers from asking about a job applicant's credit history or using credit checks to make hiring decisions. There are specific exceptions for positions involving national security, access to trade secrets, digital security, or signatory authority over funds exceeding $10,000. If an exception applies, the employer must notify the applicant and obtain written consent before running the check. The bill establishes penalties for violations, allowing applicants to file complaints with the Department of Labor and Training or sue in court for damages up to $10,000.

For younger readers

This rule stops bosses from looking at a person's history of paying bills (called a credit history) when deciding whether to give them a job. The idea is that having trouble paying bills in the past shouldn't stop someone from getting a job to earn money. However, there are some special jobs where the boss is still allowed to look. These are jobs where the worker would be in charge of a lot of money or keeping important secrets safe. If a boss breaks this rule, they might have to pay a fine.

Who & Where It Applies

Impacted groups

Job ApplicantsEmployersDepartment of Labor and TrainingHuman Resources ProfessionalsAttorneys

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

None

Estimated revenue

Employers: Up to $5,000 per violation (50% of assessed penalty)

Bill Analysis

Both viewpoints

For Progressives

Removes a significant barrier to employment for low-income individuals and minority communities who are statistically more likely to have lower credit scores due to systemic economic inequality.
Prevents the "poverty trap" where individuals cannot get a job to pay off debts because they have debt, thereby allowing people to achieve financial stability through work.
Empowers workers by providing a clear legal pathway to sue employers for discriminatory hiring practices related to financial history, with damages and legal fees covered.
The exceptions for "trade secrets" and "signatory authority" over $10,000 could be interpreted broadly by corporations to continue running checks on mid-level employees, limiting the bill's effectiveness.
The $10,000 maximum penalty may be viewed as a negligible "cost of doing business" for large corporations, failing to act as a true deterrent against illegal background checks.
Relying on individual applicants to file complaints or lawsuits places the burden of enforcement on vulnerable workers who may not have the resources or knowledge to navigate the legal system.

For Conservatives

Protects the privacy of individual citizens by preventing companies from intruding into personal financial lives that are irrelevant to most job functions.
Includes sensible exemptions for high-stakes positions involving large sums of money or trade secrets, acknowledging that businesses have a right to protect their most critical assets.
Ensures that hiring is based on merit and capability rather than a third-party credit score, potentially expanding the labor pool for businesses.
Interferes with the free market by dictating what information a private business can and cannot use to vet potential employees, eroding the freedom of contract.
Creates a new administrative burden on businesses to navigate complex exceptions and obtain written consent forms, increasing red tape and compliance costs.
Expands the power of the administrative state by authorizing the Department of Labor and Training to levy fines and interferes with business operations through government oversight.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 48 additions · 3 deletions

SECTION 1. Title 28 of the General Laws entitled "LABOR AND LABOR RELATIONS" is hereby amended by adding thereto the following chapter: 28-6.15-1. Prohibition of the use of credit history in hiring process. Employers are prohibited from asking questions about a job applicant's financial past during job interviews or posing questions about the applicant's credit history on its job application. Employers shall not seek or use credit checks while making a hiring decision. 28-6.15-2. Exceptions.

(a) The prohibitions contained in § 28-6.15-1 shall not apply to employment which:

(1) Requires a credit check, pursuant to the provisions of federal or state law;

(2) Requires a national security clearance;

(3) Has signatory authority over third-party funds or assets, worth ten thousand dollars ($10,000) or more;

(4) Are non-clerical positions, with regular access to trade secrets, intelligence information or national security information; or

(5) Are positions with regular duties allowing the employee to modify digital security systems, which are established to prevent the unauthorized use of the employer's or client's networks or databases.

(b) If the available position falls within one of the exceptions, listed in subsection (a) of this section, prior to conducting a credit check on the applicant, an employer shall:

(1) Provide notice to the job applicant that the employer shall seek their credit report; and

(2) Obtain written authorization/consent from that job applicant, authorizing the credit check. 28-6.15-3. Administrative investigations and penalties.

(a) Whenever a job applicant alleges a violation of this chapter, the applicant may file a complaint with the department of labor and training, which describes in detail the nature and basis of the applicant’s claim, along with providing any supporting written documentation.

(b) Pursuant to an adjudicatory proceeding, the department shall investigate the alleged violations, and may impose an administrative penalty of up to ten thousand dollars ($10,000) for each violation. During its penalty determination phase, the department shall be guided by the following factors:

(1) The severity of the violation;

(2) The existence of prior violations;

(3) The employer's size, considering both the total number of employees and its revenue; and

(4) The employer's actual or constructive knowledge of this chapter.

(a) Any employee or former employee, or any organization representing such an employee or former employee who is aggrieved by a violation of this chapter may, within three (3) years after the occurrence of the alleged violation, file a civil action in any court of competent jurisdiction to obtain relief. An aggrieved party shall be entitled to recover up to ten thousand dollars ($10,000), in presumed damages, as well as reasonable attorneys' fees and court costs.

(b) In assessing what damages to award, a court shall consider the factors enumerated in § 28-6.15-3(b).

(c) A civil action filed under this section may be instituted instead of, but not in addition to, the director of labor and training enforcement procedures authorized by § 28-6.15-3.

SECTION 2. Section 6-13.1-21 of the General Laws in Chapter 6-13.1 entitled "Deceptive Trade Practices" is hereby amended to read as follows: 6-13.1-21. Credit reports — Notice to individual — Requirements of users of credit reports.

(a) No person or business shall request a credit report in connection with a consumer’s application for credit, ~~employment,~~ or insurance unless a consumer is first informed that a credit report may be requested in connection with the application.

(b) Whenever credit or insurance for personal, family, or household purposes~~, or~~ ~~employment~~ involving a consumer is denied or the charge for that credit or insurance is increased either wholly or partly because of information contained in a credit report from a credit bureau, the user of the credit report shall advise the consumer against whom the adverse action has been taken and supply the name and address of the credit bureau making the report.

SECTION 4. This act shall take effect upon passage.