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New York City Council Tightens Employers’ Use of Credit Information of Applicants, Employees

Legislation being touted as the strictest in the country has been passed by the New York City Council prohibiting employers generally from requesting or using the consumer credit histories of applicants or employees for employment purposes, or otherwise discriminating against applicants or employees with respect to hiring, compensation, or the terms, conditions, or privileges of employment based on their consumer credit history. The enactment follows laws already in effect in numerous jurisdictions, including Nevada, California, and Maryland.

The “Stop Credit Discrimination in Employment Act,” which amends the City Human Rights Law, defines “consumer credit history” to include written and other information obtained through credit reports or credit scores, or other information obtained directly from the applicant or employee, about that individual’s creditworthiness, credit standing, credit capacity, or payment history. 

Passed on April 16, 2015, the law contains no broad exemptions for the financial sector, but does permit employers to request and consider the consumer credit history information of applicants and employees in certain, limited circumstances, as well as in response to any lawful subpoena, court order, or law enforcement investigation. 

Narrow exemptions recognized in the enactment include the following:

  • positions for which employers are required by law, regulation, or a self-regulatory organization to use an individual’s consumer credit history for employment purposes; 

  • certain public safety positions; 

  • positions that require the employee to be bonded under city, state, or federal law; 

  • positions requiring a security clearance under federal or state law; 

  • non-clerical positions that entail regular access to trade secrets (which are the end product of significant innovation and does not include, among other things, access to or the use of client, customer, or mailing lists), intelligence information(compiled for the purpose of criminal investigation or counterterrorism), or national security information; 

  • positions with 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; or 

  • positions with regular duties that allow the employee to modify digital security systems established to prevent the unauthorized use of networks or databases of the employer or the employer’s client.

The Council passed the Act by an overwhelming majority and it is expected to be signed into law by Mayor Bill de Blasio shortly. It would be effective 120 days thereafter.

Jackson Lewis P.C. © 2020National Law Review, Volume V, Number 110

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About this Author

Richard Greenberg, Jackson Lewis, workplace grievances lawyer, arbitrations litigation attorney
Principal

Richard Greenberg is a Principal in the New York City, New York, office of Jackson Lewis P.C. He advises both unionized and union-free clients on a full-range of labor and employee relations matters.

With respect to traditional labor matters, Mr. Greenberg represents clients in collective bargaining negotiations, labor disputes, grievances and arbitrations, proceedings before the National Labor Relations Board, and in state and federal court. Mr. Greenberg also advises clients on the legal aspects of remaining union-free....

212-545-4080
Susan M. Corcoran, Jackson Lewis, fair credit reporting lawyer, Labor Policy Attorney
Principal

Susan M. Corcoran is a Principal in the White Plains, New York, office of Jackson Lewis, P.C. Ms. Corcoran is a seasoned employment counselor and litigator and is often thought of as the “go to” person on national workplace law issues for her clients.

She is one of the leaders of the firm’s Background Check Resource Group, and serves as a resource on fair credit reporting act issues, as well as “ban the box” strategies. She taught a graduate employment law class for many years at Manhattanville College and frequently speaks before different groups on a variety of workplace law issues. She had recently served two terms as NYS SHRM Legislative Director, successfully participating in lobbying efforts to overturn New York’s annual WTPA notice requirement.

914-872-6871
David S. Greenhaus, Jackson Lewis, Title VII lawyer, employment discrimination attorney
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David Greenhaus is a Principal in the Long Island, New York, office of Jackson Lewis P.C. He has a broad area of practice and responsibility with the firm.

Mr. Greenhaus regularly litigates claims for breach of noncompetition agreements, theft of trade secrets and breach of the duty of loyalty, as well as traditional Title VII employment discrimination claims. He has practiced extensively in both state and federal courts, as well as at administrative agencies and before the American Arbitration Association. Mr. Greenhaus...

631-247-4658
Daniel J. Jacobs, Jackson Lewis law firm, Labor Employment Attorney
Shareholder

Daniel J. Jacobs is a Shareholder in the New York City, New York, office of Jackson Lewis P.C. He assists both unionized and union-free clients with a full-range of labor and employee relations matters.
With respect to traditional labor matters, Mr. Jacobs represents clients in collective bargaining negotiations, contingency planning, labor disputes, grievances and arbitrations, proceedings before the National Labor Relations Board, and in state and federal court.
Mr. Jacobs also has experience assisting clients in numerous industries with the...

212-545-4000