Starting Saturday (April 18), employers in New York state will no longer be allowed to use consumer credit history in most employment decisions.

The law, signed by Governor Kathy Hochul in December, amends the New York State Fair Credit Reporting Act.

New York is now one of 11 states that prohibit credit checks for employment decisions.

This law prohibits an employer, or potential employer, from using a consumer credit report in their decision to “hire, terminate, promote, demote, discipline, compensate, or in setting the terms, conditions, or privileges of employment.”

The law also prohibits state or municipal agencies from requesting or using “for licensing or permitting purposes, information contained in the consumer credit history of an applicant, licensee, or permittee for licensing or permitting purposes.”

But the law does not apply to agencies required by state or federal law to use an individual’s consumer credit history for licensing or permitting purposes.

The law places the burden on employers to demonstrate that an exception applies before accessing credit information.

According to the New York State Legislature’s summary of the law, “there is little to no evidence that shows a correlation between credit history and job performance.”

Still, “the majority of large employers are now using credit checks in the hiring process and in how they treat existing employees,” according to the summary.

“In addition to lacking any such meaningful correlation, the Federal...

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