S. 2798: Equal Employment for All Act of 2025

This bill, known as the Equal Employment for All Act of 2025, proposes changes to the Fair Credit Reporting Act to restrict the use of consumer credit checks in employment decisions. Below are the key points of the bill:

Key Provisions

• Prohibition on Credit Checks: The bill would prohibit employers from using consumer reports that contain information about creditworthiness, credit standing, or credit capacity when making hiring or other employment-related decisions.
• Scope of the Prohibition: This prohibition applies to both prospective employees (applicants) and current employees when employers are making adverse decisions, such as terminations or other disciplinary actions.
• Consent Irrelevant: The ban applies even if the individual gives consent for the credit check or agrees to allow the employer to obtain a consumer report.
• Exceptions to the Prohibition: Employers would still be allowed to use consumer reports in certain situations:
  • When hiring for positions that require national security clearance.
  • When required by law.

Amendments to Existing Law

The bill also proposes amendments to clarify the existing provisions of the Fair Credit Reporting Act, ensuring that the new restrictions are effectively integrated into the current legal framework. Specifically:

• The bill redesignates several subsections of the Fair Credit Reporting Act to accommodate the new rules.
• It clarifies obligations regarding consumer notification and disclosure when credit reports are used for permissible purposes.

Impact on Employment Processes

The proposed legislation aims to protect individuals from potential discrimination based on their credit history when seeking employment. Supporters argue that such information does not necessarily reflect an individual's capability to perform job responsibilities and may disproportionately affect certain groups of people.

Implementation and Compliance

Once enacted, employers would need to adjust their hiring processes to comply with the new law. This may involve training for human resources teams and updating employment policies to reflect the changes in allowable background checks.

Relevant Companies

• ADP - As a major payroll and human resource management company, ADP may need to revise their background check procedures in accordance with the new law.
• IBM - IBM, which conducts employment screenings for its workforce, may need to review its practices related to credit checks based on the bill's provisions.
• UPS - UPS may also be affected, particularly in how they screen applicants for positions that previously utilized credit reports.