City Council Approves Law Prohibiting Discrimination Based on Credit History

Law amends Chicago Human Rights Ordinance to prevent poor credit history from being a bar to employment

March 14, 2012, the Chicago City Council passed an amendment to the Chicago Human Rights Ordinance introduced by Alderman Ameya Pawar (47) prohibiting employers from using credit history as a basis for making employment decisions.  The amendment also includes a provision prohibiting job advertisements from including language which bars unemployed persons from applying.

At the February 16, 2012 meeting of the City Council Committee on Human Relations, the committee heard testimony that credit reports reflecting an applicant’s poor credit history are being used as a means to reject job seekers where such information is not relevant to the position applied for. However, the amendment does include provisions exempting certain industries and occupations where handling money or access to personal or confidential information is a requirement of the position.

Testimony at the hearing also revealed the following:

  • 37% of all credit reports contain errors and therefore may improperly affect an employer’s hiring decisions if relied upon.
  • The use of credit history information in employment decisions affects minorities disproportionately, leading to a discriminatory impact on African Americans and Latinos in particular.
  • The use of credit history has an adverse impact on the unemployed or people who have experienced high medical costs of other situations beyond their control. People who have been unemployed for an extended amount of time often have difficulties paying bills on time, which is reflected in their credit reports. As a result, if credit history is a factor in employment decisions, people who are unemployed will have difficulty obtaining jobs. 

The amendment, which goes into effect May 1, will add “credit history” as an additional protected class under the Chicago Human Rights Ordinance enforced by the City’s Commission on Human Relations.  The ordinance currently prohibits discrimination based on race, color, sex, age, religion, disability, national origin, ancestry, sexual orientation, gender identity, marital status, parental status, military discharge status, and source of income.

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