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Paul Zimmerman
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Credit Score No More: NYC Job Seekers are No Longer Subject to Credit Score Checks

Credit scores have long been an unrelenting source of frustration for many people. Whether it has prohibited you from obtaining that much-needed loan or driven up the cost of insurance premiums, having poor credit can follow you nearly anywhere. In fact, for some time, those looking to procure employment in New York City have been subject to these same frustrations - that is, until very recently. 

On May 6th, Mayor Bill De Blasio signed Bill Int. No. 261-A into law, which prohibits the use of a job applicant’s consumer credit history by employers in their employment decisions. In addition to credit scores, “the [employee’s] number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limit, prior credit report inquiries, or bankruptcies, judgments or liens” will be among the items employers may not use in hiring, firing, or making any such type of employment decision.

This piece of legislation, aimed at eliminating a form of economic discrimination, will amend the New York City Human Rights Law (NYCHRL) and go into effect on September 3rd, 2015.

Like many of the more recent amendments to the NYCHRL, this law is more favorable to employees than some of its national counterparts. Where all of the other 12 comparable laws in various U.S. jurisdictions merely prohibit the use of credit history, this law is considering it “employment discrimination” to simply request credit history from job applicants or current employees. This unique distinction is a preventative measure that seemingly looks to remedy a situation before an adverse employment action can be taken. As for the actual remedial measures a discriminated employee may possess, the new law will have all the remedies outlined in the NYCHRL; aggrieved employees can obtain reinstatement, back pay, promotions, compensatory damages, punitive damages, attorney’s fees and costs.

But what about those scenarios where job responsibilities might require some level of fiscal responsibility? The new law addresses these scenarios, and others, in a series of exceptions that leave the following employees unprotected by this law: [1]

  • Employees working for employers who are required by state or federal law or regulations to use an individual’s consumer credit history for employment purposes;
  • Employees required to be bonded under City, state or federal law;
  • Employees in a non-clerical position having regular access to trade secrets, intelligence information or national security information;
  • Employees in a position: (i) having signatory authority over third-party funds or assets valued at $10,000 or more; or (ii) that involves a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer.

If you are a New York City employer with four or more employees, and who regularly uses credit history in making employment decisions, you may want to reconfigure your decision making process before the effective date of this amendment, or consult an attorney on whether your employees fit within any of the law’s exceptions before requesting credit information.

[1] For a complete list of all exceptions provided by the law,  click here.

This blog post is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.