On April 16, 2015, the New York City Council approved the Stop Credit Discrimination in Employment Act, which would ban employers in New York City from using applicants’ and employees’ credit histories in hiring and employment decisions. Council members who support the bill, labor unions, and activist organizations have long argued that reliance on credit checks discriminates against minorities and low-income New Yorkers with poor credit histories. The bill, which Mayor de Blasio is expected to sign in the coming weeks, would amend the city’s Human Rights Law to make it an unlawful discriminatory practice for most employers to request or use applicants’ or employees’ consumer credit history in making hiring and employment decisions. The bill would take effect 120 days after enactment.

The bill differs from “ban-the-box” legislation, which restricts consideration of an applicant’s criminal history until a point after the initial application process, in that it would prohibit employers from considering applicants’ or employees’ credit history in any way at any time. The bill broadly defines credit history to include credit scores, credit reports, details about credit accounts, late or missed payments, charged-off debts, bankruptcies, judgments, or liens.

The bill includes a number of carve-outs that would allow consideration of credit history in certain situations. For example, the bill would not prohibit an employer from using credit histories where required by state or federal law. Employers could also use credit histories when hiring for certain positions that require public trust such as police officers, positions in which employees are required to be bonded by city, state, or federal law, positions with access to trade secrets or national security information, or positions with signatory authority over assets valued at $10,000 or more.

The Stop Credit Discrimination in Employment Act follows other recent pro-employee legislation in New York. Last year, the NYC Earned Sick Time Act went into effect, requiring employers with 15 or more employees to provide five paid sick days to most employees. Employers with fewer than 15 employees are required to provide unpaid time off without penalty to employees. Earlier this year, Governor Cuomo signed a bill that amends New York State’s Wage Theft Prevention Act (“WTPA”) by significantly increasing penalties for wage payment violations.

The legal landscape affecting employers in New York City and New York State has seen many recent changes, and many expect more pro-employee legislation in the coming months. Employers should stay up to date on the law and ensure their compliance with the new requirements.