NYC to Ban Employer Credit Checks

New York City Mayor Bill de Blasio signed into law the Stop Credit Discrimination in Employment Act. The new law prohibits most New York City employers from using or requesting an applicant’s consumer credit history, and prevents them from discriminating against an applicant or employee based on their credit history.

The law was signed by de Blasio on May 6 and will go into effect on Sept. 3.

The mayor’s office noted the law has several exceptions, including for law enforcement and other professions involving a high level of public trust or access to sensitive information.

Bennett Pine, chair of law firm Anderson Kill’s employment and labor law group, explained that the ban on credit checks does not apply to:

• police, law enforcement, public safety and other appointed positions subject to background investigations;
• bonded and financial services positions, and non-clerical jobs providing access to trade secret or national security/intelligence information;
• jobs with signatory or fiduciary authority over funds valued at $10,000 or more;
• jobs where security clearance is required by law; and positions allowing the employee access to modify digital security systems designed to prevent the unauthorized use of networks or databases.

Pine said the new law adds New York City to a list that includes 10 states (California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont and Washington) and the city of Chicago, all of which currently ban the use of credit checks of job applicants. Chicago, and several of the states, allow credit checks to be performed for jobs involving money handling.

When asked if certain exceptions could apply for insurance sector jobs, Pine said it would depend on the functions of the position. “For example, are they bonded or actually working in a financial services position? Do they have actual signatory or fiduciary authority over $10,000 in funds?” said Pine.

He said positions such as clerical, maintenance, sales or support jobs might not reach that threshold for the exceptions.