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Another State Restricts Use of Credit Reports in Employee Background Screening

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On March 29, 2010, Oregon Governor Kulongoski signed legislation (S.B. 1045) that specifically prohibits employers from using credit history in making hiring, discharge, promotion, and compensation decisions unless the applicant or employee is given advanced written notice and the credit history is substantially job-related. Although the proposed legislation was to be effective July 1, 2010, the Governor declared the legislation effective immediately.

Oregon joins Washington and Hawaii as one of three states that have effectively banned workplace credit checks. There is also pending legislation in Illinois that recently passed the House of Representatives, which would impose similar restrictions. This trend underscores the importance of employers being aware of state law restrictions pertaining to credit and background checks,  particularly in multistate businesses.

There are four exceptions to the Oregon law:

  1. Bank and credit union employers
  2. Employers that are required by state and federal law to use credit histories for employment purposes
  3. Public safety officer employers
  4. Employers that can demonstrate that credit information is “substantially job-related” and that provide written disclosure of the reasons for the use of the credit check

The statute does not further define what “substantially job-related” means, nor has the Oregon Bureau of Labor and Industries (BOLI) adopted rules to inform employers on how it will be applied.

In the absence of clear rules or guidance from BOLI, employers that intend to continue utilizing credit histories after March 29th, 2010, should proceed with caution and consult legal counsel to determine whether they fit into one of the statute’s exceptions. If they do not fit within an exception, employers should develop alternatives to current practices to avoid penalties and civil liability. A violation of the new law is an unlawful employment practice, and an aggrieved individual can file a complaint with BOLI and a civil lawsuit for injunctive relief, reinstatement or back pay, and attorney’s fees.

Compliance steps for Oregon Employers:

  • Do not run credit reports for employees or applicants, unless your company fits into one of the four exceptions.
  • Seek counsel to determine if credit information is “substantially job-related.”
  • You can still run other types of background checks (criminal record searches, employment and education verifications, etc.) as you did before this law.

Sources:  Seyfarth Shaw, Davis Wright Tremaine LLP

Photo credit: Neubie

Q&A On Using Social Networks For Background Screening

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I found an excellent Q&A regarding employee background screening on Human Resource Executive Online.

Question:

Can you provide the parameters for HR in the use of information discovered on the Web, such as Facebook, as it applies to job applicants?

Answer:

Social networks and blogging sites can provide an inexpensive and easy way for employers to gather a plethora of information about potential job applicants. However, employers should think twice about using information found on social-networking sites to make employment decisions because the use of such information could lead to the potential risk of employer liability.

This is because these sites contain information about job applicants that employers would not be permitted to ask about during any job interview. Therefore, using, and in some cases, simply accessing these pages for employment purposes can result in violations of various anti-discrimination statutes, privacy laws, state “off-duty” conduct statutes, and federal and state Fair Credit Reporting Acts.

For the complete article click here.

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Photo Credit: webtreats

Best Employee Screening Articles For October & November 2009

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In case you missed any of our employee screening articles for October and November, here’s a quick recap of our most popular:

Smart, Compliant Hiring Decisions Made Easy

FYI Screening offers a wide array of customized background screening solutions to meet any need. Human Resources and Loss Prevention Professionals in numerous industries worldwide trust FYI’s screening solutions every day to make smarter, safer and more cost effective hiring decisions.

Genes and Jobs: Can Employers Use Your DNA For A Background Check?

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Psychology Today has an excellent article on this subject titled “Genes and Jobs.”

The Genetic Non-Discrimination Act (GINA) comes into full effect this Saturday, November 21st.

Employers need to take note, and employees should be aware of their rights

Congress passed GINA almost unanimously, and President Bush signed it on May 21, 2008. Described by the late Senator Ted Kennedy as “the first civil rights bill of the new century of the life sciences,”

GINA protects individuals from genetic information discrimination in health insurance and employment

Even some well-informed commentators seem to have missed this landmark piece of legislation. So have some employers. The University of Akron (UA), for example, adopted a policy as recently as August that could require any candidate for employment to submit a DNA sample.

Read more about Genes and Jobs.

The Coalition for Genetic Fairness also gives the following guidelines for employers on how to comply with The Genetic Non-Discrimination Act (GINA).

GINA outlines the following activities as unlawful employment practices and discriminatory on the basis of genetic information:

  • The use of genetic information in making decisions regarding hiring, promotion, terms or conditions, privileges of employment, compensation, or termination.
  • Limiting, segregating, or classifying an employee, or depriving that employee of employment opportunities, on the basis of genetic information.
  • The request, requirement, or purchase of genetic information of the individual or a family member of the individual except in rare cases, as outlined in the drop-down section below.
  • The use of genetic information in making decisions regarding admission to or employment in any program for apprenticeship or training and retraining, including on-the-job training.

Furthermore, employers should be aware that it is unlawful for an employment agency, labor organization, or training program to fail or refuse to refer an individual for employment on the basis of genetic information, nor may the agency or labor organization attempt to cause an employer to discriminate against an individual on the basis of genetic information.

Related Post From FYI Screening:

How To Protect Your Company When Googling Job Applicants

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Earlier this week I wrote how 100% Of Companies Will Be Using Social Networks As Part Of Their Employee Screening Program By 2012.

Jon Hyman from the Ohio Employer’s Law Blog read this post and offers some advice on how employers can protect themselves when they use social networks to screen applicants.