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Massachusetts Moves to Ban Employment Credit Checks

Massachusetts Moves to Ban Employment Credit Checks

Massachusetts is on the verge of passing a law that would make it illegal for employers to use credit reports for employment decisions, except in very limited cases. This proposed legislation aims to reduce employment barriers and is among the most stringent in the nation. If enacted, it would amend the Massachusetts Consumer Protection Law to prevent employers from inquiring about or utilizing an applicant's or employee's credit information for employment-related purposes, including hiring, promotions, or retention. Notably, there are a few exceptions, such as for positions requiring national security clearance or where federal or state law dictates the use of consumer reports. The law would also carry strong anti-retaliation measures to protect those who report or oppose violations. Employers found violating the law could face significant monetary damages. Massachusetts joins a growing list of jurisdictions that limit employer credit checks, though with narrower exemptions. Employers should prepare for compliance by the projected effective date of January 1, 2025.

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