Changes in New York City's Credit Check Laws

In May of this year, New York City Mayor Bill Deblasio signed a bill that amends the City’s Human Rights Law to prohibit “most employers from inquiring into or considering a prospective or current employee’s credit history when making employment decisions.” This law took effect on September 3, 2015.

The law broadly defines credit history to include:

  • Consumer credit reports and scores and
  • Information directly obtained from the applicant or employee regarding his or her
    • Prior bankruptcies, judgement or liens
    • Number of credit accounts
    • Late or missed payments
    • Charged off debts
    • Items in collections
    • Credit limit,
    • Prior credit report inquiries

While credit checks can provide valuable information about the fiscal responsibility of an individual, the law will protect many worthy job applicant who have debt for reasons such as medical crises, prolonged unemployment, or subprime loans. The use of credit checks in employment can have devastating discriminatory effects on the low-income job-seeking population. As the strongest law of its kind in the United States, the New York City law is intended to remedy these problems.

While the ban will have an expansive effect on employers in New York City, the ban will not apply to certain positions such as those with access to trade secrets or national security information, various safety positions, or positions requiring security clearances. The City ensures that aggrieved applicants and employees are entitled to proper remedies if an employer does not comply with the new law, including a private right of action with a “promise of generous remedies.”

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