85R1928 KKR-F
By: Canales H.B. No. 317
A BILL TO BE ENTITLED
AN ACT
relating to the consideration by certain employers of the consumer
credit reports of certain employees and applicants for employment;
providing administrative penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 52, Labor Code, is amended by adding
Subchapter H to read as follows:
SUBCHAPTER H. CONSIDERATION OF CREDIT REPORT BY EMPLOYER
Sec. 52.081. DEFINITIONS. In this subchapter:
(1) "Applicant" means a person who has made an oral or
written application with an employer, or has sent a resume or other
correspondence to an employer, indicating an interest in
employment.
(2) "Commission" means the Texas Workforce
Commission.
(3) "Consumer reporting agency" means any person that,
for monetary fees or dues or on a cooperative nonprofit basis,
regularly engages in the practice of assembling or evaluating
credit information or other information on individuals for the
purpose of furnishing credit reports to third parties.
(4) "Credit report" means any written, oral, or other
communication of information by a consumer reporting agency that
bears on an individual's creditworthiness, credit standing, or
credit capacity.
(5) "Employee" and "employer" have the meanings
assigned by Section 21.002.
(6) "Employer engaged in or regulating financial
services" means:
(A) a bank, savings and loan association or
savings bank, credit union, or other depository institution or its
subsidiaries or affiliates;
(B) a mortgage banker or residential mortgage
loan company;
(C) a securities firm or registered financial
advisory firm;
(D) a regulated loan company;
(E) an insurance company or insurance agency; or
(F) a state agency responsible for regulating an
entity described by Paragraph (A), (B), (C), or (D).
Sec. 52.082. CREDIT REPORT SUBSTANTIALLY RELATED TO
EMPLOYMENT POSITION. A credit report is considered to be
substantially related to an employee's or applicant's employment
position or prospective employment position if the position:
(1) is a managerial position which involves setting
the direction or control of a business or a division, unit, or
agency of a business;
(2) involves access to customers', employees', or the
employer's personal or financial information, other than
information customarily provided in retail transactions;
(3) involves a fiduciary responsibility to the
employer, including the authority to issue payments, collect debts,
transfer money, or enter into contracts;
(4) provides an expense account or corporate debit or
credit card;
(5) involves access to the employer's nonfinancial
assets valued at $2,005 or more, including museum and library
collections or prescription medications or other pharmaceuticals;
or
(6) provides access to:
(A) confidential or proprietary business
information; or
(B) information, including a formula, pattern,
compilation, program, device, method, technique, process, or trade
secret that:
(i) derives independent economic value,
actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who
could obtain economic value from the disclosure or use of the
information; and
(ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
Sec. 52.083. EFFECT ON OTHER LAW. This subchapter does not
limit or affect the rights, remedies, or procedures available to an
individual who alleges an unlawful employment practice prohibited
under federal law, another state law, or an order or ordinance of a
political subdivision of this state.
Sec. 52.084. PROHIBITED ACTS BY EMPLOYER. An employer may
not require an employee or applicant to consent to a request for a
credit report that contains information about the employee's or
applicant's credit score, credit account balances, payment
history, savings or checking account balances, or savings or
checking account numbers as a condition of employment unless:
(1) the employer is a financial institution or other
employer engaged in or regulating financial services;
(2) consideration of the credit report is required by
law;
(3) the employer reasonably believes that the employee
or applicant has engaged in specific activity that constitutes a
violation of the law related to the employee's employment or
applicant's prospective employment; or
(4) the report is substantially related to the
employment position or prospective employment position of an
employee or applicant and the employer:
(A) has a bona fide employment purpose for
requesting or using information in the credit report; and
(B) discloses in writing to the employee or
applicant:
(i) that the employer intends to consider
the employee's or applicant's credit report; and
(ii) the employment reason for the
employer's consideration of the credit report.
Sec. 52.085. ADMINISTRATIVE PENALTY. (a) An employer
commits an administrative violation if the employer violates this
subchapter.
(b) The penalty for a violation under this section may not
exceed $1,000. In assessing a penalty under this section, the
commission shall consider:
(1) prior violations of this subchapter by the
employer;
(2) the severity of the violation; and
(3) any other factor the commission determines to be
relevant.
SECTION 2. This Act applies only to an adverse employment
action that is taken by an employer against an employee or applicant
for employment or other employer conduct that occurs on or after
January 1, 2018. Action taken by an employer or other conduct that
occurs before January 1, 2018, is governed by the law in effect
immediately before the effective date of this Act, and the former
law is continued in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2017.