On May 6, 2015, New York City Mayor Bill de Blasio signed into law a new bill that prohibits most employers from requesting or considering an applicant’s or employee’s consumer credit history when making employment decisions, such as hiring, compensation, or the terms, conditions or privileges of employment. The law, Intro. 261, coined the “Stop Credit Discrimination in Employment Act,”[i]amends New York City’s Human Rights Law, N.Y.C. Admin. Code § 8-101, et seq., and will go into effect on September 3, 2015.

Notably, the amendment does not cover all applicants and employees. Rather, the Act expressly exempts the following:

  • police officers or peace officers, or those in a position with a law enforcement or investigative function at the department of investigation;
  • applicants or employees subject to background investigation by the department of investigation, if the position is an appointed position in which a high degree of public trust has been reposed;
  • applicants or employees required to be bonded under law;
  • applicants or employees required to possess security clearance under law;
  • applicants or employees in a non-clerical position having regular access to trade secrets, intelligence information or national security information;
  • applicants or employees having signatory authority over third party funds or assets valued at $10,000 or more;
  • applicants or employees having a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer; and
  • applicants or employees with regular duties that allow the employee to modify digital security systems.

The Bottom Line. Because the amendment modifies the Human Rights Law, an applicant or employee will be provided with a private cause of action against an employer that discriminates based on the applicant’s or employee’s consumer credit history. If found liable, the employer could be exposed to damages including back and front pay as well as uncapped compensatory and punitive damages. Thus, employers are encouraged to review, and modify if necessary, their application and screening processes to avoid potential exposure under the amendment.