NYC Bans Employment Credit Checks

As reported in our blog on April 21, 2015, New York City (NYC) introduced a bill that if passed would prohibit an employer from asking job applicants or current employees questions regarding their credit history. On May 6, 2015, NYC Mayor Bill de Blasio passed the Stop Credit Discrimination in Employment Act. The law became effective September 3, 2015.

Employers with four or more employees are prohibited from running a credit check, asking questions regarding credit history, and using credit history to make employment decisions, such as firing, hiring, or promoting an individual. Credit history is defined in the law as an individual’s credit worthiness, credit standing, credit capacity, or payment history as indicated in a consumer credit report, credit score, or information obtained from an employer directly from the individual. There are job positions exempt from the provisions. Exemptions apply to police officers, peace officers, positions subject to background investigation by the department of investigation, position where employee is required to be bonded under the City, state or federal law, position where employee is required to possess security clearance under federal law or state law.

Employers who violate the Stop Credit Discrimination in Employment Act may have to pay lost wages and other damages to affected employees and may be subject to civil penalties of up to $125,000. Willful violations may result in penalties of up to $250,000. Employers must review their credit check practices. For more information, make sure to visit NYC Commission on Human Rights’ website

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