Senate Committee Holds Public Hearing on Bill Prohibiting Employment Discrimination Based on Credit History

Posted on by Hamilton

The Senate Committee on Labor, Elections and Urban Affairs is holding a public hearing tomorrow (Dec. 15) on Senate Bill 275, prohibiting employment discrimination based on credit history. If enacted, SB 275 would subject employers to significant punitive and compensatory damages. Therefore, WCJC is opposes the bill.

Background

The Legislature this year significantly amended the Wisconsin Fair Employment Law (WFEL) (Wis. §§ 111.31 – 111.395) when it enacted 2009 WI Act 20. That law added punitive and compensatory damages for violations of the WFEL. Prior to enactment of Act 20, the WFEL allowed an employee who was discriminated against to seek reinstatement, back pay, attorneys’ fees, and costs, but did not allow an employee to sue for punitive and compensatory damages. Under the new law, punitive and compensatory damages range between $50,000 and $300,000, depending on the number of people employed by the business.

SB 275/AB 367

SB 275/AB 367 would prohibit employment discrimination based on credit history under Wisconsin’s WFEL. The bill provides a narrow exception where circumstances of an individual’s credit history are “substantially related to the circumstances of a particular job or licensed activity.”

Thus, if SB 275 (or AB 367) is enacted, an employer would be subjected to potentially significant punitive and compensatory damages by simply obtaining a job applicant’s credit history. In fact, as currently written, valuable tools for screening potential employees such as salary and employment verification could subject an employer to penalties under the bill.

Wisconsin would join just three other states that have adopted similar legislation, and would have the dubious distinction of having the most stringent penalties in the nation.

In its testimony, WCJC will argue that the Legislature should not burden Wisconsin businesses with greater civil liability, especially during this economic downturn.

SB 275’s companion bill (AB 367) already received a public hearing in the Assembly and passed out of committee on a party-line vote.