A law effective this July 1 will restrict the the rights of employers in Colorado to conduct background credit checks during the hiring or promotion process except for limited exemptions.

Employers will not be allowed to run credit checks unless they 1) are a bank or financial institution, 2) are required by law to run such a check, or 3) can prove that the credit report is "substantially related to the employee's current or potential job."

Colorado thus joins California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and Washington in restricting employers' use of background credit checks.

An aggrieved individual can file a complaint with the state labor department, which can award civil penalties of as much as $2,500.