January 31, 2024 — Press Release

Bill to reduce barriers to employment takes another step toward the Governor’s desk

BOSTON The Fair Chance in Employment Act (S.1144 & H.1434), filed by Sen. Mike Barrett and Rep. Josh Cutler respectively, was recently reported favorably out of the Joint Committee on Labor and Workforce Development. The bill aims to regulate the use of credit reports by employers by barring employers from considering an employee or job applicant’s credit report in hiring or employment decisions.

“Credit reports should not be a part of the hiring process. They don’t predict job performance, they are riddled with errors, and the scores blatantly reflect racial inequities and injustices,” said Chi Chi Wu, senior attorney at the National Consumer Law Center. “We are encouraged to see the FCEA clear its latest legislative hurdle, and look forward to working with lawmakers to ensure Massachusetts joins a growing list of states that restrict the use of credit reports in hiring.” 

About half of all employers obtain credit reports on at least some of their job applicants, despite the failure of these reports to predict job performance. Even if credit reports did predict job performance, a Federal Trade Commission study found 20% of consumers had verified errors in their reports and 5% had errors so serious it could cause them to be denied credit or a job. Credit reports are too unreliable for employers to be allowed to rely on them.  

“Massachusetts has moved one step closer to ending employment credit check discrimination,” said Rep. Josh Cutler (D-Duxbury), outgoing chair of the Joint Committee on Workforce Development and incoming Undersecretary of Apprenticeship, Work-based Learning, and Policy in the Executive Office of Labor and Workforce Development. “I’m proud of the progress we’ve made towards eliminating needless barriers to employment for otherwise qualified employees and am confident my colleagues will see this bill through to the finish line.”

The economic consequences of the nation’s long history of racial discrimination are reflected in the data in credit reports. As a result, credit scores are often lower in communities of color—in Boston, 91 points lower in non-white areas than in predominantly white areas. Using credit data for jobs amplifies and perpetuates these inequities. 

“Credit reports are not representative of the value of someone’s work,” said Michael Best, senior attorney at the National Consumer Law Center. “It’s time to reduce barriers to employment unfairly imposed on qualified applicants.” 

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