NYC Strictly Limits Employers from Using Credit Checks in Employment Decisions and Mandates Increased Use of Secret Testers in Employment and Housing Discrimination Investigations
Credit Checks Limited
On May 6, 2015, New York City Mayor Bill de Blasio signed into law a bill that prohibits employers and employment agencies from using or requesting job applicant’s consumer credit history, and prevents management from discriminating against an applicant or employee based on their credit history. In a press release explaining the new legislation, which amended New York City’s Human Rights Law, the Mayor’s Office contended that “using credit checks during the hiring process to screen applicants disproportionately affects low-income applicants and applicants of color.” There are several exceptions to the ban on credit checks in the new law, including for law enforcement and other professions involving a high level of public trust or access to sensitive information, and for employers who conduct credit history checks pursuant to state and federal laws or regulations. However, the City Council declined to enact a general exemption for financial services industry employees.
Because the new law amended the New York City Human Rights Law, employees claiming violations can file a complaint with the New York City Commission on Human Rights or commence a private action in a New York court. The City’s Human Rights Law provides significant remedies to an employee who prevails, including hire, reinstatement, back pay, front pay, unlimited compensatory and punitive damages, and attorneys’ fees. The new law will take effect on September 2, 2015 and will apply to all New York City employers with four or more employees.
Use of Secret Testers Mandated
On April 20, 2015, Mayor de Blasio also signed into law a set of bills aimed at strengthening the transparency of the New York City Human Rights Commission in its efforts to enforce the City’s Human Rights Law. One bill, Intro. 421-A, requires the Commission to report additional information related to its investigations of discrimination, including the total number of investigations and the number of investigations that result in an enforcement action. A second bill, Intro. 689-A, requires the Commission to test for housing discrimination, and a third bill, Intro. 690-A, requires the Commission to test for discrimination in employment practices. These tests would involve sending a pair of testers who have similar qualifications, but differ in a characteristic such as race or gender, who would apply for housing or employment to determine if discriminatory practices are being used. These new laws also require the Commission to report the results of these tests, and to refer any incidents of discrimination, to the Commission’s Law Enforcement Bureau for assessment.
This year long testing program, which must begin before October 1, 2015, marks the first time that legislation has mandated the Commission to seek out discrimination, instead of simply investigating claims of discrimination filed with the Commission. Although the new laws require the Commission to perform at least five of these tests each year with regard to employment and with regard to housing, there is no limit on the number of tests that the Commission may perform. In view of the 25 percent budget increase that the Mayor is seeking for the Commission, employers and landlords can expect the frequent use of testers, as well as more aggressive enforcement efforts overall by the Commission.
In light of the Supreme Court’s recent decision and the newly enacted New York City laws, employers should review their current hiring and employment practices and policies. The attorneys in the Sills Cummis & Gross P.C. Employment and Labor Law Group can assist employers and landlords in dealing with these new employment and housing discrimination developments.