New York City Prohibits Employers From Considering Credit History When Making Employment Decisions
On May 6, 2015, New York City enacted the Stop Credit Discrimination in Employment Act (the “Act”), which amends the New York City Human Rights Law to make it unlawful for employers to consider an individual’s consumer credit history in making employment decisions. Not only does the Act prohibit the consideration of an applicant’s or employee’s credit history, but it also prohibits employers from requesting a credit history.
Despite its broad prohibitions, the Act does contain specific exemptions that permit employers to consider an applicant’s or employee’s credit history in certain situations. For example, the Act does not apply to:
- employees with fiduciary responsibility to their employer and the authority to enter into financial agreements on behalf of the employer for $10,000 or more;
- employees with signatory authority over third-party funds valued at $10,000 or more;
- employees with authority to modify the employer’s digital security systems;
- non-clerical employees who have access to trade secrets, intelligence information, or national security information;
- employees required to possess security clearance under state or federal law;
- employers that are required by state or federal law or regulation, or by a self-regulatory organization to use consumer credit history for employment purposes;
- employees required to be bonded under applicable local, state, or federal law;
- police officers; or
- certain employees within the New York City Department of Investigations.
The enactment of the Act follows a growing trend across the United States to prohibit the use of credit histories in employment decisions. The States of California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington have all passed similar legislation. Employers need to remain mindful of changes in state and local laws in the jurisdictions where their employees work to ensure compliance with applicable laws.
As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.
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