Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Pre-Employment Credit Checks Are Now Prohibited in NYC

Author: Scarinci Hollenbeck, LLC

Date: July 7, 2015

Key Contacts

Back

New York City recently joined the growing list of jurisdictions that prohibit employers from conducting pre-employment credit checks.

On April 16, 2015, the NYC City Council passed the law that will prohibit pre-employment credit checks, “Stop Credit Discrimination in Employment Act”. The new law will become effective 120 days after being signed into law by Mayor Bill de Blasio.

The Stop Credit Discrimination in Employment Act

The anti pre-employment credit checks law, which applies to businesses with four or more employees, would amend the New York City’s Human Rights Law to make it an unlawful discriminatory practice for an employer to use an individual’s consumer credit history in making employment decisions. As with other violations of the law, workers would be able to pursue a private cause of action.

The broad employment law defines “consumer credit history” as “information bearing on an individual’s credit worthiness, credit standing, or credit capacity, including, but not limited to, an individual’s credit score, credit account and other consumer account balances, and payment history.” Information about prior bankruptcies, judgments, or liens and details regarding the number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limit or prior credit report inquiries is also off limits.

In addition to banning the use of consumer credit histories in the hiring process, the law also makes it illegal to consider such information when making decisions regarding “compensation, or the terms, conditions or privileges of employment.”

The NYC employment law does include several notable exceptions from pre-employment credit checks , which were added to the law in its final stages. For instance, it does not apply to employers required by state or federal law or regulation, or by a self-regulatory organization, to use consumer credit history for employment purposes.

Exemptions

In addition, the following are also exempted from pre-employment credit checks :

  • Positions in public safety and law enforcement;
  • Positions in which employees must be bonded under city, state, or federal law;
  • Positions requiring employees to posses security clearance under federal or state law;
  • Non-clerical positions with regular access to trade secrets, intelligence or national security information;
  • Positions with signatory authority over third party funds or assets valued at or involving fiduciary responsibility to the employer of $10,000 or more; and finally,
  • Positions with regular job duties authorizing the modification of digital security systems protecting the employer or client’s network or databases.

The Stop Credit Discrimination in Employment Act reflects the growing trend of restricting the use of consumer credit checks to screen potential job candidates. California, Maryland, Connecticut, Hawaii, Illinois, Washington, Oregon, Vermont, Colorado and Nevada already have similar measures in place. Accordingly, it is imperative for employers to review their policies and procedures to maintain compliance in this rapidly evolving legal landscape.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Jorge R. de Armas or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Dissolving Your Business: Essential Legal Steps to Protect Your Interests post image

Dissolving Your Business: Essential Legal Steps to Protect Your Interests

If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]

Author: Christopher D. Warren

Link to post with title - "Dissolving Your Business: Essential Legal Steps to Protect Your Interests"
The Role of Corporate Restructuring in Mergers & Acquisitions post image

The Role of Corporate Restructuring in Mergers & Acquisitions

Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]

Author: Dan Brecher

Link to post with title - "The Role of Corporate Restructuring in Mergers & Acquisitions"
Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public post image

Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public

Cryptocurrency intimidates most people. The reason is straightforward. People fear what they do not understand. When confusion sets in, the common reaction is either to ignore the subject entirely or to mistrust it. For years, that is exactly how most of the public and even many in law enforcement treated cryptocurrency. However, such apprehension changed […]

Author: Bryce S. Robins

Link to post with title - "Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public"
Understanding Chattel Paper: A Key Component in Secured Transactions post image

Understanding Chattel Paper: A Key Component in Secured Transactions

Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]

Author: Dan Brecher

Link to post with title - "Understanding Chattel Paper: A Key Component in Secured Transactions"
Crypto Compliance: A Comprehensive Guide post image

Crypto Compliance: A Comprehensive Guide

For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]

Author: Bryce S. Robins

Link to post with title - "Crypto Compliance: A Comprehensive Guide"
Supreme Court and Title VII: Implications for Reverse Discrimination post image

Supreme Court and Title VII: Implications for Reverse Discrimination

Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]

Author: Matthew F. Mimnaugh

Link to post with title - "Supreme Court and Title VII: Implications for Reverse Discrimination"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!