New York City Human Rights Law Strictly Limits Employers' Use of Credit Checks in Hiring

May 13, 2015

In follow-up to our April 21 post, New York City Mayor Bill de Blasio signed into law an amendment to the New York City Human Rights Law on May 6, prohibiting employment discrimination on the basis of “consumer credit history.”  The amendment makes it an “unlawful discriminatory practice” for an employer to use an applicant's or employee’s consumer credit history when making hiring and other employment decisions, and to otherwise discriminate against an applicant or employee on the basis of his or her consumer credit history.  The law goes into effect on September 3, 2015, and applies to most private sector employers in New York City. Under this new amendment, most private New York City employers may only consider an applicant's or employee’s consumer credit history for the following types of positions:

  • Positions that are non-clerical and have regular access to trade secrets;
  • Positions with “signatory authority over third party funds or assets valued at $10,000 or more”;
  • Positions that “involve a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer”;
  • Positions where job duties regularly include the modification of digital security systems designed to protect the employer’s or client’s networks or databases;
  • Positions with access to information relating to criminal investigations or national security; and
  • Positions legally required to be bonded.

There are also exceptions for positions in public agencies, and for employers who are legally required to obtain an applicant's or employee’s consumer credit information. “Consumer credit history” is broadly defined as information relating to an individual’s “credit worthiness, credit standing, credit capacity, or payment history,” including information obtained from credit reporting agencies, as well as information gathered directly by the employer from the applicant or employee, such as whether the individual has items in collections, or has filed for bankruptcy. The enforcement and remedy provisions of this new amendment are the same as for other types of discrimination under the New York City Human Rights Law, meaning aggrieved applicants or employees may file a lawsuit for damages in court, or file a complaint directly with the New York City Commission on Human Rights. Private New York City employers who gather and use an individual’s consumer credit history during hiring or when making other employment decisions should revise such policies.  Such information may only be considered when the position held by an employee or sought by an applicant fits into one of the exceptions listed above.