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Adapting to Change: Massachusetts Legislation and Background Checks

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In the realm of modern employment practices, the utilization of background checks has emerged as a pivotal component in the hiring process. These checks serve as a critical tool for employers to assess the suitability of prospective candidates, ensuring both workplace safety and regulatory compliance. However, the landscape of employment practices continues to evolve.

The Massachusetts House of Representatives approved a bill on March 14, 2024, which aims to ban employers from acquiring or utilizing credit reports for employment-related decisions. The legislation is anticipated to undergo Senate approval and subsequently be signed into law by Governor Maura Healey. Should it be enacted, the law is slated to become effective on January 1, 2025.

The “An Act Reducing Barriers to Employment Through Credit Discrimination” pertains to details concerning an applicant or employee’s “creditworthiness, credit standing, or credit capacity.” Specifically, the legislation prohibits employers from:

  • Considering information from a credit report as a criterion for assessing eligibility for employment, promotion, reassignment, or retention.
  • Soliciting or obtaining a consumer report for employment purposes.
  • Mandating that an employee or applicant respond to inquiries regarding creditworthiness.
  • credit standing, or credit capacity contained in a background check report; or
  • Requesting that an employee or applicant relinquish their rights under the statute.

Exemptions include employers mandated by federal or state regulations (e.g., financial institutions like banks and credit unions) or the guidelines of a self-regulatory body (e.g., registered securities exchanges and associations) to utilize a consumer report for employment purposes are exempt. Additionally, employees or applicants in roles necessitating national security clearance are exempt from this provision.

While stringent in its scope, this legislation solely pertains to credit checks and does not hinder employers from procuring other forms of background checks from consumer reporting agencies, such as criminal history reports, motor vehicle records, education and employment verifications, and the like.

For more information, click here.

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Hire Image is a division of Orange Tree Employment Screening, uniting our strengths to design a background screening program in your best interest and deliver unmatched client experience.

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