OREGON: Final credit check rules released

Final rules implementing Oregon’s new law that will limit employers’ ability to request credit histories on applicants and employees have been published by the Bureau of Labor and Industries (BOLI). Unfortunately, the final rules provide very little guidance, other than to give an extremely limited definition of when a credit history is “substantially job-related.” The new rules make it clear that ordinary retail transactions (exchanging cash, checks, credit card numbers or debit card numbers) don’t give an employer a substantially job-related reason to request a credit check on an applicant or employee. Instead, the credit history is substantially job-related if an essential function of the job “requires access to financial information not customarily provided in a retail transaction that is not a loan or extension of credit” or if the credit history is necessary in order for the employer to obtain insurance or bonding. In order to take advantage of this exception, employers must also give a written notice to the individual, explaining why the employer is using the information. The law takes effect on July 1, 2010 (SB 1045, 2010 Or Laws Ch 102).

Tips: If you want to run a credit check but are uncertain whether the new law applies to you, contact your Vigilant staff representative with questions. Make sure you disclose your reasons for requesting a credit check in writing to the applicant or employee. The new rules don’t give any guidance on the timing of the notice, so the simplest approach may be to include it with the initial disclosure that you are already giving under the federal Fair Credit Reporting Act. See our Model Form, “Background Checks: Federal Notices” (5341).