Oregon Issues New Rules on Use of Credit History for Employment Decisions

By Lester Rosen, President of ESR, & Thomas Ahearn, ESR News Staff Writer

As noted previously on ESR, the state of Oregon recently passed a law preventing most employers from using the credit histories of job applicants or employees for employment-related decisions by prohibiting an employer from using credit history for employment purposes unless that credit history information is “substantially job-related” and the reasons for using credit information are disclosed to the employee or applicant in writing.

The new Oregon law — which took effect July — establishes any violation as an unlawful employment practice enforceable by the Civil Rights Division of the Bureau of Labor and Industries (BOLI). According to a BOLI press release, the final rules for employer use of credit histories were completed quickly to protect employees and assist employers. These rules prohibit employment discrimination by employers on the basis of worker’s credit history information with an exception for information that is “substantially job-related.”

In a document titled Employer Obtainment or Use of Credit History Information available on the BOLI website at http://www.oregon.gov/BOLI/, the determination of whether credit history information is substantially job-related must be evaluated with respect to the position for which the individual is being considered or holds and that credit history information of an applicant or employee is substantially job-related if:

  • An essential function of the position at issue requires access to financial information not customarily provided in a retail transaction that is not a loan or extension of credit (Financial information customarily provided in a retail transaction includes information related to the exchange of cash, checks, and credit or debit card numbers); or
  • The position at issue is one for which an employer is required to obtain credit history as a condition of obtaining insurance or a surety or fidelity bond.

Oregon’s new rules on credit history use by employers also define Unlawful Discrimination by stating it is an unlawful employment practice for an employer to obtain or use for employment purposes information contained in the credit history of an applicant for employment or an employee, or to refuse to hire, discharge, demote, suspend, retaliate or otherwise discriminate against an applicant or an employee with regard to promotion, compensation or the terms, conditions or privileges of employment based on information in the credit history of the applicant or employee.

In addition to the new rules available online at http://www.oregon.gov/BOLI/LEGAL/docs/RulesSoS0052010.pdf, Oregon has also provided a Technical Assistance for Employers hotline at 971-673-0824 for further assistance.

For more information about use of credit history for employment screening, visit Employment Screening Resources (ESR) at http://www.esrcheck.com.

Sources:

http://www.oregon.gov/BOLI/LEGAL/docs/RulesSoS0052010.pdf

http://www.oregon.gov/BOLI/docs/06.01.10_BOLI_Release_-_SB_1045_Rules.pdf