Should NH bar employers from using credit history in employment decisions?

In the coming weeks the New Hampshire House of Representatives will vote on HB 1385, a bill that aims to prohibit employers from using credit history in employment decisions. This is not the first time the New Hampshire Legislature has voted on this idea; similar bills got a vote in 2020, 2019, 2017, 2015, and 2014. Each year, opponents argued that employers should be able to use credit history as a measure of a person’s responsibility. Advocates argue the practice unjustly locks low-income residents into a cycle of debt.

A proposal to limit the use of credit history

HB 1385 is written to generally ban the practice of looking at a person’s credit history when considering a job application, promotion, compensation, or any other terms of employment.

The bill carves out several exceptions. An employer could look at credit history if it is required by other state or federal law. An employer could also consider credit history if the job duties involve financial management or responsibility. Lastly, the bill includes a broad exception for any employer that has “a bona fide purpose” for looking at a person’s credit history that is “substantially related” to the job.

These carve-outs are intended to cover a broad range of employers that have expressed concern about how this law might impact their hiring processes, from jewelry stores to the majority owner of the nuclear power plant in Seabrook.

Arguments around the use of credit history

Supporters of HB 1385 argue that credit history is not an indicator of personal character, so allowing employers to look at credit history is an unfair invasion of privacy. Someone might fall into debt after a medical emergency or a messy divorce. If bad credit stops them from getting a new job, it becomes more difficult to pay off debt and improve credit, starting a vicious cycle.

The many exceptions in HB 1385 still give employers flexibility to consider credit history if a person would be involved in financial duties.

Opponents of HB 1385 argue that employers should always have the option to consider credit history as a measure of a person’s responsibility.

During committee work on HB 1385, legislators also suggested that the bill would barely have an impact with so many exceptions. The Department of Labor expressed some concern that “a bona fide purpose” to check credit history was so broad that enforcing the law would be difficult.

Eleven states – including California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington – restrict the use of credit history in employment decisions.

Next steps for HB 1385

HB 1385 will face a vote from the full House of Representatives in the coming weeks. If you have an opinion on the bill, reach out to your representatives and share it. You can find who represents you here.

Update: The House killed HB 1385.

There are many other bills related to the rights of employers and employees. Visit the Labor Laws topic page to browse these proposals.