The Mayor of New York City (Bill DeBlasio) has signed legislation (Int. 0261-2014) to prohibit the use of credit checks by most employers. The law amends the city’s Human Rights Law and takes effect on September 3, 2015. Affected employers will no longer be permitted to inquire or consider a job applicant or employee’s consumer credit history for employment purposes.
As stated in the bill text, “it shall be an unlawful discriminatory practice for an employer, labor organization, employment agency, or agent thereof to request or to use for employment purposes the consumer credit history of an applicant for employment or employee, or otherwise discriminate against an applicant or employee with regard to hiring, compensation, or the terms, conditions or privileges of employment based on the consumer credit history of the applicant or employee.”
There are exceptions to the law which include the following:
• Positions non-clerical in nature in which the individual has regular access to trade secrets
• Positions having "signatory authority over third party funds or assets valued at $10,000 or more
• Positions that involve a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer
• Positions with regular duties that allow the employee to modify digital security systems that are designed to prevent the unauthorized use of the employer or client networks or databases
• Positions where credit history is required under federal, state or local law
• Positions requiring security clearance under federal or state law
Aggrieved individuals can file a private right of action to seek punitive damages, attorney’s fees/costs, back pay and reinstatement. Employers in New York City state should start preparations ahead of time and review their background check policies and procedures to be in compliance prior to the September 3, 2015 deadline.
Click here to read the full text of the law.