Beginning April 18, employers screening or employing workers in New York are prohibited from using credit history information in employment decisions, subject to certain exceptions.
Outside of specific circumstances, it will be considered discrimination to use someone’s credit history against them while considering hiring, firing, compensation, or promotion decisions.
There are some exceptions to the rule. Employers can check credit history if the position requires security clearance, is in law enforcement, involves financial authority, or includes regular access to trade secrets.
Governor Kathy Hochul signed the law late last year, aimed at making hiring decisions more equitable. It takes effect statewide on April 18, reflecting a broader regulatory trend limiting the use of screening tools that are not closely tied to job performance.
New York joins 10 other states that have enacted legislation concerning the use of consumer credit history in employment decisions, including: California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington. Additionally, several major cities, including New York City, Chicago, Philadelphia, and Washington D.C., have also enacted similar restrictions.
“This new prohibition generally expands New York City’s Stop Credit Discrimination in Employment Act, which has banned New York City employers from engaging in similar practices since 2015, subject to limited exemptions,” said Catherine Weiss Butto, an...
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