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Oregon Bans Credit History Checks by Employers

Posted By Jim On 07/02/2010 @ 9:17 am In NEWS | 191 Comments

The Oregon Legislative Assembly has passed House Bill 1045 [3], which would prohibit the use of credit history for use in employment purposes (it was actually signed by the governor in late March [4]). In other words, employers in Oregon cannot use the information they collect in a credit report to make am employment decision such as hiring, firing, or demoting an employee. The law, obviously, goes into greater detail but the writing on the wall is clear – you cannot use credit checks to make any sort of employment decision.

My take on this is that it’s about time a state stepped up and stopped this practice. Not many employers do it, only about 35-40% according to [5] an Oregon Bureau of Labor and Industries spokesman, but that’s far too many.

The law does allow exclusions for:

  • Employers that are federally insured banks and credit unions;
  • Employers that are required by state or federal law to use credit history for employment purposes;
  • The employment of a public safety officer who is a member of a law enforcement unit;
  • Employers if that information is “substantially job-related and the employer’s reasons for the use of such information are disclosed to the employee or prospective employee in writing;”

If employers violate this law, employees or prospective employees are able to file a complaint and receive damages, compensatory damages or $200, whichever is greater; plus punitive damages.

We need a federal law mandating this so we can save state legislatures some time.

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[3] House Bill 1045: http://www.leg.state.or.us/10ss1/measpdf/sb1000.dir/sb1045.en.pdf

[4] signed by the governor in late March: http://gov.oregonlive.com/bill/SB1045/

[5] according to: http://www.oregonlive.com/politics/index.ssf/2010/06/new_law_prohibits_credit_check.html

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