Jon Bartholomew, consumer advocate at theÂ Oregon State Public Interest Research Group, writes about a new law in Oregon protecting job applicants’ privacy when it comes to their credit reports. (Last month, the Examiner reported that Washington, D.C. is considering banning employers from checking the credit of job applicants, with some exceptions.) Bartholomew writes:
Today, Oregon Governor Kulongoski signed SB 1045, the Job Applicant Fairness Act, which prohibits most employers from using credit reports in their applicant screening process.
OSPIRG supported SB 1045 for a variety of reasons.
Working families in Oregon face the worst economic crisis since the Great Depression. Unemployment is at a twenty-six year high, foreclosure rates have skyrocketed and have not even peaked yet, and those who have jobs are facing lost hours and wage cuts. Even families with years of savings are now struggling to get by due to job loss, outstanding medical bills, home loan rate resets, and faltering retirement plans.
Many employers are using credit reports to screen job applicants. According to the most recent membership survey conducted by Society for Human Resource Management, 60% of employers conduct credit checks on job applicants.
The use of credit in employment is a Catch-22 for job seekers, many of whom canâ€™t pay their bills because they donâ€™t have a job, but now canâ€™t find a job because they canâ€™t pay their bills. In this bad economy, poor credit says nothing about an applicantâ€™s work ethic or character. Even TransUnion, which sells credit reports to employers, admitted in a recent informational hearing that it has no research to show a statistical correlation between credit history and job performance. […]
Credit reports can still be used in employment if the information is directly related to an occupational qualification. This bill only restricts the use of credit reports to deny employment to otherwise qualified applicants who have, at some point in their lives, fallen on hard times.