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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.

Employer Tips

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.

© Copyright 2017 Sills Cummis & Gross P.C.

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About this Author

David I. Rosen, Sills Cummis Gross, Wrongful Dismissal Lawyer, Labor Arbitration Attorney
Member

David I. Rosen has practiced labor and employment law on behalf of management clients since 1977. He handles employment litigation in the federal and state courts, before administrative agencies and through arbitration and mediation, and has broad experience with wrongful dismissal and employment discrimination claims, having successfully defended employers following jury and bench trials. His litigation experience extends to the enforcement and defense of restrictive covenants, NLRB unfair labor practice trials and appellate advocacy. Mr. Rosen also represents employers in labor...

(973) 643-5558
Galit Kierkut, Employment Litigation Attorney, Sills Cummis Gross, Social Media Matters Lawyer
Member

Galit Kierkut concentrates her practice on employment litigation and counseling. She conducts human resources audits, performs management and employee training in all areas, including sexual harassment, social media and electronic communications use, and counsels clients regarding compliance with state and federal employment laws, including discrimination laws, the Fair Labor Standards Act (FLSA), family and medical leave, and the Worker Adjustment and Retraining Notification (WARN) Act. She also reviews and drafts employee handbooks, social media policies and employment contracts, including restrictive covenants and severance agreements. Her employment litigation practice is primarily focused on resolving claims in the areas of discrimination, sexual harassment, restrictive covenants, whistleblowing and employment contract disputes in state and federal courts and before the Department of Labor and the Equal Employment Opportunity Commission (EEOC).

973-643-5896
Charles Kaplan, Sills Cummis Gross, Labor Employment Attorney, Affirmative Action Matters Lawyer
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Charles H. Kaplan is a Member of the Sills Cummis & Gross Employment and Labor Practice Group and is resident in the Firm’s New York Office.  Mr. Kaplan represents employers in federal and state trial and appellate courts, as well as before enforcement agencies, including the U.S. Equal Employment Opportunity Commission, the National Labor Relations Board, the Office of Federal Contract Compliance Programs of the U.S. Department of Labor, the New York State Division of Human Rights, the New York State Department of Labor and the New York City Commission on Human Rights.

212-500-1563