The Use of Credit Checks by Employers is Under Attack on Many Fronts—Oregon Statute is but One Example

We will be posting with frequency about the various statutory, regulatory, and litigation (disparate impact challenges) attacks on management’s reliance on credit checks to screen or otherwise evaluate candidates for employment. Oregon has enacted a statute that takes effect July 1, 2010, and would prohibit employers from considering for employment purposes any information that bears on credit-worthiness, credit standing, or credit capacity, unless such information is “substantially related” to the individual’s current or potential job. If an employer concludes that credit information meets this job-related standard, the employer must provide the employee or job applicant with the reasons for its determination, and must do so in writing. Federally-insured banks and credit unions are exempt from the statute, as well as those employers who are required by federal or state law to rely on individual credit history reports. Further, the statute does not apply to certain public safety officers. The Oregon Bureau of Labor and Industries recently announced rules implementing the statute with the opportunity to comment by May 3rd.