A new employment law in Oregon was enacted by the legislature during its February session. This law, Senate Bill 1045, makes it an unlawful employment practice for most employers to obtain or use for employment purposes information contained in the credit history of a job applicant or an employee. The bill was signed into law by Governor Kulongoski on March 29, 2010, and became operative on July 1. The law also makes unlawful the refusal to hire, the discharge, demotion or suspension of, or the retaliation or discrimination against, an applicant or employee based on information in the person’s credit history.
The provisions of SB 1045 apply to all Oregon employers, except:
- Federally insured banks and credit unions,
- Employers required by state or federal law to use individual credit history for employment purposes,
- Employers of a public safety officer who is part of a law enforcement unit (note that the law does not mention applicants in this exception), is commissioned by a particular government entity and is responsible for enforcing criminal laws or airport security, and
- Employers who first disclose to the applicant/employee in writing the reasons for using the information and are able to demonstrate that the need is "substantially job-related" as defined in the administrative rules.
The exception for positions where credit history information is substantially job-related has been clarified in BOLI administrative rules. The substantially job-related test requires an evaluation of the position to determine (1) if the essential job functions include access to financial information beyond just cash, check or credit and debit card information required in ordinary retail transactions, or (2) if the job requires credit history in order for the employer to obtain insurance or a bond.
If either condition is met, and the written disclosure has been made to the applicant/employee, the restrictions of the law do not apply. However, the burden of proving the disclosure rests with the employer.
The term "credit history" is defined in the law as any communication of information by a consumer reporting agency that bears on a consumer’s creditworthiness, credit standing or credit capacity. That information cannot be obtained or used by employers for purposes of making employment decisions about applicants or employees and cannot be the basis for discrimination or retaliation against them. Applicants and employees harmed by such unlawful practices may file a complaint with the Civil Rights Division of the Oregon Bureau of Labor and Industries or they may file a civil action in circuit court. The result may be the award of an injunction against the employer and any other appropriate equitable relief, including back pay and other monetary damages, and the court is authorized to award attorneys’ fees and costs to the prevailing party.
By following the restrictions of this new law carefully and making sure that, if credit histories are used it is under one of the limited exclusions provided in the law, Oregon employers may ensure that they will not be ordered to pay these damages.
For additional information on other topics of interest to Oregon employers, visit our website at www.oregon.gov/boli/ta, or call (971) 673-0824.