With “little to no evidence” indicating a correlation between credit history and job performance, a new law will ban employers, labor organizations or employment agencies from conducting consumer credit checks on employees or potential new hires.
In today’s job market, the majority of large employers use credit checks as part of their hiring process and in how they treat their existing employees, the bill’s text states, adding that in addition to lacking any such meaningful correlation, a Federal Trade Commission study indicates that as many as one in four consumers may have a “material error” in their credit report.
Signed into law by Gov. Kathy Hochul, the text of the bill states that because millions of Americans have errors in their credit reports, it puts them in a lower credit risk tier, whether they are aware of any errors or not.
Many New Yorkers, through no fault of their own, have less than ideal credit histories that may stem from issues completely unrelated to their job performance or capabilities, making them disadvantaged because employers are using credit reports to determine if they are worthy of a job or a promotion, according to the bill.
Further, the bill states that there is “little to no evidence that shows a correlation between credit history and job performance.”
Effective April 18, 2026, New York state will not allow employers, labor organizations or employment agencies to conduct consumer credit checks on most employees or potential new hires.
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