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Oregon Employers Can’t Use Your Credit Report Any More When Deciding Whether to Hire You

Sept. 30, 2010

On July 1, 2010, Oregon’s Job Applicant Fairness Act went into effect, saving workers from one of the meanest Catch-22s of this Great Recession: after not being able to pay their bills because they don’t have a job, then not being able to get a job because they can’t pay their bills! This law made it illegal for most employers to use a job applicant’s credit history in making hiring decisions.

The passage of this law puts Oregon near the head of the class on this front. Washington and Hawaii have passed similar laws, and no less than 13 other states have related laws pending.

This new law doesn’t just apply to job applicants—even though the title sounds like it does. It also applies to promotion and similar decisions about all ongoing employees as well. An employer cannot “discharge, demote, suspend, retaliate or otherwise discriminate against an . . . employee with regard to promotion, compensation or the terms, conditions or privileges of employment based on information in the credit history of the . . . employee.”

There are some important exceptions. The law does NOT apply to:

  • federally insured banks and credit unions (which includes just about all of them)

  • employers which “are required by state or federal law to use individual credit history for employment purposes”

  • police and other public employers hiring for law enforcement and airport security

One more very important exception: when credit record information “is substantially job-related,” AS LONG AS the applicant or employee is told in writing about the “reasons for the use of such information.” This exception is probably not as big as it sounds. It is not enough that the position involves handling money, but only includes positions where an “essential function of the position” “requires access to financial information not customarily provided in a retail transactions.” It makes some sense that if you’re going to be handling the financial affairs of a business, that employer ought to look at your credit report before hiring or promoting you into that position.

Last thing: to put some teeth into the new law, it gives you two choices if you’ve been hurt by an employer violating this law. You can either 1) file a complaint with the state Bureau of Labor and Industry, or 2) sue in court. If you win in court, you can get up to two years of back pay. And the employer would have to pay your attorney fees and costs, plus maybe punitive damages—punishment for violating the law.

Portland Bankruptcy Law Group has the experience and knowledge to handle your case. Our bankruptcy lawyers are extremely familiar with and are well versed in all aspects of bankruptcy law. Contact us today!