Puerto Rico Enacts Restrictions on Use of Credit History in Employment

Seyfarth Synopsis:  With limited exception, Puerto Rico has joined the growing list of states that preclude an employer or prospective employer from procuring an employee’s or applicant’s credit history and/or taking adverse employment action based on credit history.

On October 8, 2019, Puerto Rico Governor Wanda Vázquez Garced signed into law Act 150-2019 (the “Act”), which took effect immediately and prohibits employers (or potential employers) from:

• denying or depriving an individual from receiving benefits or compensation, refusing to hire, refusing to promote, or discriminating against an employee or applicant based upon a credit history report;
• verifying or investigating an employee’s or applicant’s credit history;
• requesting or obtaining from a credit agency an employee’s or applicant’s credit report; or
• taking adverse employment actions based on an employee’s or applicant’s credit history report.

The Act sets forth a list of positions that are exempt (but still require written consent from the employee or applicant), including, but not limited to:

• management positions;
• positions that have access to trade secrets (as defined under Puerto Rico law), financial or personal information, or cash or other goods subject to misappropriation totaling at least $10,000; or
• positions for which a credit report is required by federal law.

Employers that violate the Act may be subject to penalties of up to $2,500 for each violation.

Employer Outlook

Covered employers located in Puerto Rico, and particularly multi-state employers, should ensure that their employment practices are in compliance with the Act, as well as continue to monitor developments in this and related areas of the law, including laws restricting the use of credit history information and applicable fair credit reporting laws.