Law: New York City recently amended the New York City Human Rights Law (NYCHRL) to prohibit, with limited exceptions, employers from using consumer credit history to make employment decisions. The amendment defines “consumer credit history” to include consumer credit reports, credit scores and information obtained directly from an individual regarding details about credit accounts, bankruptcies, judgments or liens. The NYCHRL provides for a private cause of action and the award of unlimited punitive damages, compensatory damages and attorneys fees to successful plaintiffs. The law goes into effect on September 3, 2015.
Impact: New York City joins a growing number of jurisdictions and the EEOC in limiting the ways in which employers can request and use applicant and employee credit histories. These jurisdictions and the EEOC (in joint guidance with the Federal Trade Commission issued in early 2014) have expressed concerns that credit histories are of limited relevance to performance for many jobs and that their use as an applicant screening tool can have an adverse discriminatory impact on certain groups. New York City’s law is among the most restrictive of the laws in this area, allowing for employer use of credit history in only a limited number of circumstances. Private employers with employees in New York City should review their credit check policies to ensure compliance with the new law.