Main | Thursday, July 01, 2010

Oregon Bans Credit Checks By Employers

Oregon has become the third state to bar companies from checking the credit records of potential employees.
Under the new law, Oregon employers will no longer be able to use credit history as a factor in hiring, firing, demoting or suspending employees, unless they can establish that it's substantially related to the job. The law originated from a concern that credit histories could be inaccurate or unfairly represent job seekers down on their luck, said Sen. Diane Rosenbaum, D-Portland,who sponsored the bill. Oregon unemployment is hovering around 10.6 percent, and people don't need another factor standing between them and a job, she said. About 35 to 40 percent of employers nationally check credit scores, Bob Estabrook, a state Bureau of Labor and Industries spokesman, estimated. But the percentage is dropping as other states, including Washington and Hawaii, adopt similar laws. When someone is unable to obtain a job because of a couple of missed rent payments, the credit evaluation is "arbitrary ... and people don't get a chance to explain," Estabrook said. Using credit histories can also lead to inadvertent racial discrimination because African Americans and Latinos generally have lower credit scores, he said.
Oregon's Republicans, of course, opposed the bill. Similar laws are under consideration in many other states. The Governator vetoed such a bill for California in 2008 and 2009.

(Tipped by JMG reader Aaron)

Labels: ,

comments powered by Disqus