Nov 7, 2019

Puerto Rico Enacts Protection for Employees’ Credit History

Credit History, Credit Report, Credit Rating

On October 8, 2019, effective immediately, the Governor of Puerto Rico signed into law Act No. 150, known as the “Act to Protect Employee’s Credit Information” (“the Act”). The Act prohibits employers from looking into the credit history of current or potential employees, including obtaining credit reports from credit agencies, and from making employment decisions based on such credit history.

The Act does not reach all employees or applicants. Notably, positions which are managerial, regulated by the Department of Justice or the judicial branch, or require access to trade secrets, financial, or personal information, are exempt. Additionally, any position in which federal law requires employers to obtain a credit history check is also exempt. If any exemption applies, the employer must still obtain prior written consent from the employee before requesting their credit history.

Noncompliance with the Act subjects employers to administrative penalties of up to $2,500 per violation. Employers should ensure their employment practices comport with the Act to avoid any penalties.

If you have any questions regarding this law or its impact, please contact your Labor and Employment Counsel at Smith, Gambrell & Russell, LLP.

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