Image via Shutterstock.

Image via Shutterstock.

Under legislation unanimously passed by the D.C. Council Judiciary Committee today, employers would not be able to ask about or otherwise obtain an applicant or worker’s credit history. The Fair Credit in Employment Amendment Act would amend the Human Rights Act of 1977 to include “credit information” as a protected trait.

“Some people falsely believe that [credit history] determines someone’s character or likelihood that they’ll commit a crime,” says Judiciary Chair and Ward 5 Councilmember Kenyan McDuffie, “What we’ve seen in the research is that poor credit stems from negative life events—job loss, medical debt, consequences of historic wealth inequality.”

That, along with the high rates of inaccuracy on credit reports, means “credit history isn’t a reliable way to measure a person’s ability to do a job,” he says.

According to a Society for Human Resource Management report, nearly half of employers check a candidate’s credit history, generally motivated by concerns about theft, embezzlement, and reducing “legal liability for negligent hiring.”

And those checks impact the outcome of the hiring process. One Demos national survey found that 10 percent of unemployed respondents were told that the information in their credit report prevented them from being hired. Those most likely to be affected are low-income people, women, and people of color.

Traits already included in the HRA are race, color, religion, national origin, sex, age, marital status, personal appearance, sexual orientation, gender identity or expression, family responsibilities, genetic information, disability, matriculation, and political affiliation. OHR’s 2015 report shows that sex was the most commonly docketed employment trait, with 116, followed by race at 112, and disability at 106.

“The HRA is always an evolving document,” says Stephanie Franklin, policy director and spokesperson at OHR. “As we go through different changes in society, and as protections are added and considered, we are always ready to educate people about the changes and enforce them.”

When first drafted and introduced in June 2015, the legislation was similar to D.C.’s “Ban the Box” bill, which restricts employers from asking potential hires about their criminal history before making a conditional offer. That bill passed the council in June of 2014.

During OHR’s first full year of enforcing “Ban the Box,” the agency docketed 365 cases alleging violations of the law—one of the highest complaint rates in the country. A case study from the National Law Employment Project attributed that to “the exceptional outreach of OHR and the fine structure.”

However, the Judiciary Committee concluded in a report that credit history was so irrelevant to job suitability that it didn’t make sense for employers to be able to access it even after making a conditional offer. (There is an exception in the bill for federal jobs.)

“We’re really sending a message to employers that using credit as a proxy may give employers a false sense of security,” says McDuffie. “We want people to be considered on the merits. Poor credit is a significant barrier to all kinds of employment.”

One thing that remains from the initial draft is the fine structure. Employers found in violation by the D.C. Office of Human Rights would face a $1,000 fine the first time, $2,500 the second, and $5,000 for each following violation. The bill would also requires OHR to create a public information campaign about the update.

In addition to McDuffie, Ward 4’s Brandon Todd, Ward 7’s Yvette Alexander, Ward 8’s LaRuby May, At-Large Councilmember Anita Bonds, and former At-Large Councilmember Vincent Orange introduced the legislation, with co-sponsors Brianne Nadeau of Ward 1, Ward 6’s Charles Allen, and At-Large Councilmember Elissa Silverman. Judiciary Committee members Jack Evans and Mary Cheh voted for the bill today.

With these numbers, McDuffie says he is hopeful the bill will pass the full council.