Oregon’s Legislature is considering a bill that would prohibit pre-employment credit screening unless it is relevant to the job. Hawaii and Washington have enacted similar limits.

The proposed bill allows banks, credit unions, and public safety agencies to continue screening applicants’ credit histories; for the rest of the state’s employers, credit checks could be a thing of the past. Other pre-employment background checks, like criminal records, education verification, and reference checks would still be allowed.

Those speaking in favor of the bill’s passage cite the floundering US economy, saying it’s unfair to conduct credit screening during a recession. Proponents also claim no connection between bad credit and unethical workers.

While the recession has certainly increased the numbers of applicants with questionable credit histories, the Oregon bill seems to assume that employers do not consider anything but credit checks when deciding whether or not to hire an applicant. The employers we hear from use credit screening for cash-handling positions, to protect sensitive confidential data, and as an indicator of judgment and responsibility.

Smart employers take into consideration every aspect of an applicant’s skill, education, and character. In many cases, the credit check is the last step before hiring. Many employers use it as a guide and communication tool for applicants that have already passed several steps in the hiring process. A few blips on a credit report due to medical expenses and job loss would be excused by many employers—and a bad economy doesn’t mean the information should not be available to employers who need it.

Employers need all the tools available to them to make good hiring decisions. Credit checks help many thousands of employers protect their companies, their existing staff and the customers they serve by ensuring only properly screened employees handle cash and sensitive data. Banning credit checks will not lead to higher employment.

Tags: Employee Credit Checks, HR and Employees, Oregon Considers Credit Check Ban for Employers, Pre-Employment Credit Screening

This entry was posted on Wednesday, February 3rd, 2010 at and is filed under Employer Legal Issues. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.