Final rules implementing Oregon's new law that will limit employers' ability to request credit histories on applicants and employees have been released by the Oregon Bureau of Labor and Industries (BOLI).

Responding to AOI testimony and concerns, BOLI eliminated a numbers of proposed provisions that would have adversely impacted employers. For example, BOLI scrapped language that would have required burdensome notification and records retention requirements. AOI pointed out in several instances that such notification and records retention requirements would be costly and unrealistic for small employers.

BOLI's final rules are much improved from the original proposed rules. However, the final rules provide very little guidance, other than to give what appears to be a limited definition of when a credit history is "substantially job-related." Under Senate Bill 1045, employers are allowed to continue use of credit histories so long as they are "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…" or if the credit history is necessary in order for the employer to obtain insurance or bonding.

Although on the surface this appears to be a narrow definition of "substantially job-related," many believe that the language provides enough leeway for most employers to continue the practice of using credit histories for positions with access to sensitive financial information of the employer, its employees, its customers or vendors.

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. This can easily be achieved by adding this notice to the FCRA notice already required by federal law. The law and regulations take effect on July 1, 2010.

(You can see BOLI's new credit check regulations here)