BOSTON – The Joint Committee on Labor and Workforce Development will hold a hearing that includes analysis of the Fair Chance in Employment Act (FCEA): S.1144 and H.1434. Together, the bills, filed by Sen. Mike Barrett and Rep. Josh Cutler respectively, aim to regulate the use of credit reports by employers and reduce barriers to employment. Advocates at the National Consumer Law Center, MassPIRG, a representative from Eastern Bank, and lawmakers will testify in support of the bills to ensure that employers cannot consider an employee’s or job applicant’s credit report in hiring or employment decisions.
“I’m proud to sponsor this bill to end employment credit check discrimination in Massachusetts,” said Rep. Josh Cutler (D-Duxbury), chair of the Joint Committee on Workforce Development. “Pre-employment credit checks can create needless barriers for otherwise qualified employees. There’s little credible evidence that they’re an accurate barometer of worker suitability or future job performance. Credit reports may also contain inaccuracies and systemic financial inequities that can perpetuate discriminatory hiring practices.”
“As the pandemic emphasized, a bad credit score is often the result of unavoidable circumstances like illness or being laid off,” says State Senator Mike Barrett, chief sponsor of the Senate bill. “These types of setbacks shouldn’t be a barrier for employment.”
“Credit reports should not be a part of the hiring process. They don’t predict job performance and are riddled with errors, and the scores reflect racial inequities and injustices,” said Chi Chi Wu, senior attorney at the National Consumer Law Center. “Massachusetts should join the 11 states that have already restricted the use of credit reports in hiring to eliminate a barrier to employment that has fallen primarily on low-income workers and workers of color.”
“Credit reports are built on a foundation of racial and economic injustices, like redlining and poverty, and have no bearing on the value of someone’s work,” said Rep. Tram T. Nguyen (D-Andover). “The Fair Chance in Employment Act gives Massachusetts an opportunity to build a fairer, more equitable economic future, while helping employers hire and retain the best candidates. Everybody wins.”
“Even after decades of promises by the credit bureaus to eliminate errors on consumers’ credit reports, as many as 1 in 3 credit reports contain errors,” said Deirdre Cummings, legislative director for MASSPIRG. “You simply cannot base employment decisions on something so fraught with errors.”
Many employers have already changed their credit-checking policies, including Eastern Bank. A representative of Eastern Bank will testify on how its policy to not review the credit histories of potential employees has improved the lives of current and prospective employees and benefited the bank.
“Credit checks don’t predict employee behavior or fraud and the use of them creates a difficult hurdle for people who are rebuilding their lives, returning to the workforce, or negatively impacted by incorrect information on their credit report—and, ultimately, credit check policies restrict businesses from tapping talent that can make valuable and vital contributions to their companies,” said Nancy Huntington Stager, executive vice president, Eastern Bank. “This bill eases barriers of entry for people and helps them get to work, which is good for business and our communities.”