New York City joined a growing number of jurisdictions that limit the use of credit checks in employment. The Stop Credit Discrimination in Employment Act (the “Act”) becomes effective in New York City on September 2, 2015. The Act prohibits employers with four or more employees from requesting or using for employment purposes the consumer credit history of an applicant or employee, or to otherwise discriminate against an applicant or employee regarding hiring, compensation, or the terms and conditions of employment based on a credit history.
As with the California law enacted in 2011, there are many exceptions. Employers may lawfully condition employment or continued employment on good credit history for positions that involve (i) security clearance required by law; (ii) signatory authority over third party funds or assets of $10,000 or more; (iii) fiduciary responsibility to the employer with the authority to enter into financial agreements of $10,000 or more on behalf of the employer; (iv) regular duties that allow the employee to modify digital security systems established to prevent the unauthorized use of the employer’s or client’s networks or databases; and (v) for non-clerical positions, regular access to trade secrets (not including general proprietary company information such as handbooks and policies or access to or use of client, customer, or mailing lists). The law recognizes other exemptions — here is a link to the text of the Act.