Employment, Benefits & Labor

Action Item: New York City employers should evaluate their application and employment policies to ensure compliance with a new law regarding the request and use of applicant and employee consumer credit history that will go into effect on September 3, 2015.

New York City Mayor Bill de Blasio recently signed into law Int. No. 261-A, which prohibits employment discrimination based on an applicant’s or employee’s consumer credit history. The new law, which becomes effective on September 3, 2015, makes it unlawful “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.”

The New York City law is the latest in a growing nationwide array of city and state laws that prohibit employers from conducting consumer credit checks on employees. The New York City law defines “consumer credit history” to mean “an individual’s credit worthiness, credit standing, credit capacity, or payment history,” and provides examples of such credit history.  However, the law is not all-encompassing. By its terms, the law does not apply to employers that are “required by state or federal law or regulations . . . to use an individual’s consumer credit history for employment purposes.” The law also provides for numerous position-specific exemptions, including (a) “police officers or peace officers,” (b) employees who are “required to possess security clearance under federal law or the law of any state,” (c) employees in a “non-clerical position having regular access to trade secrets, intelligence information or national security information,” (d) employees having “signatory authority over third party funds or assets valued at $10,000 or more” or in a position “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," and (e) positions “with regular duties that allow the employee to modify digital security systems established to prevent the unauthorized use of the employer’s or client’s networks or databases.”