May 13, 2011
Employers Need to Know
Employment Law Alerts from
Ober|Kaler's Employment Group
LEGAL UPDATE
New Law Prohibits Maryland Employers from Using Applicant and Employee Credit Information
Effective October 1, 2011, Maryland employers, with limited exception, will no longer be able to request or use
an applicant's or employee's credit report or credit history to make employment decisions.
The Job Applicant Fairness Act, passed by the Maryland General Assembly this session, applies to employers
of all sizes. The Act allows an employer to request or use an applicant's or employee's credit information only
after an offer of employment has been extended. Yet, even then, credit information cannot be used to deny
employment, terminate the employee, or determine the terms, conditions and privileges of employment,
including compensation.
However, an employer with a "bona fide purpose" that is "substantially job-related" can continue to request and
use an applicant's or employee's credit information, if such use is disclosed in writing to the applicant or
employee, and the position available, is managerial, allows the employee access to personal information,
involves a fiduciary responsibility to the employer, provides for an expense account, debit or credit card for the
employee or allows the employee access to confidential business information.
The Act does not apply to employers that are (1) required under federal or state law to request an applicant's
or employee's credit information, (2) financial institutions and subsidiaries that accent federally insured
deposits, (3) credit union share guaranty corporations approved by the Maryland Commissioner of Financial
regulation or (4) investment advisors registered with the U.S. Securities and Exchange Commission.
www.ober.com
The Maryland Commissioner of Labor and Industry will enforce this Act. Violators can be assessed a civil
penalty of up to $500 for an initial violation and up to $2500 for repeat violation.
Maryland is the fifth state to adopt this type of statute, after Hawaii, Oregon, Washington and Illinois. Eighteen
other states are considering or have recently considered similar legislation.
For more information on this Act and how it applies to your business please contact your Ober|Kaler
Employment and Labor attorney (www.ober.com/practices/employment-attorneys).
About Ober|Kaler
Ober|Kaler is a national law firm that provides integrated regulatory, transaction and litigation services to
financial, health care, construction and other business organizations. The firm has more than 130 attorneys in
offices in Baltimore, MD, Washington, DC and Falls Church, VA. For more information, visit www.ober.com.
This publication contains only a general overview of the matters discussed herein and should not be construed
as providing legal advice.
Copyright© 2011, Ober, Kaler, Grimes & Shriver
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