Credit History Discrimination Law Passed in NYC

June 25, 2015

The Mayor of New York City (NYC) Bill de Blasio has signed into law an amendment to the NYC Human Rights Law (Amendment) that will restrict employers from using or requesting an applicant’s or employee’s consumer credit history for employment purposes. This rule applies to most private employers, subject to very limited exceptions. The Amendment takes effect on September 3, 2015.

Consumer Credit Reports

Employers have several tools at their disposal for screening and selecting employment candidates. Many employers conduct background checks to get a better illustration of candidates and their job-related qualities. These background checks may involve obtaining a consumer credit report, which contains information on a candidate’s credit history, employment history, bankruptcies, court disputes, criminal records, payment history, and personal data. Some employers may consider poor credit history to be an indicator of an inadequate sense of responsibility or a high risk of recklessness. They might eliminate a job candidate from consideration based on this data.

The Equal Employment Opportunity Commission (EEOC) has maintained that credit history is a very poor gauge of job-related qualities. The EEOC argues that many aspects of a consumer credit report, including poor credit history, statistically correlate with certain protected minority groups that may not lawfully be discriminated against in employment decisions. The courts have not always sided with the EEOC, which has fought for a blanket rule that restricts employers from using credit history for employment purposes.

Several states and municipalities, like New York City, have begun a trend to prevent employers from considering credit history when making employment decisions. California, Connecticut, Illinois, and Washington are among those that have already enacted similar legislation.

Restricted Information

The Amendment applies to employers, labor organizations, employment agencies, or agents of these entities within New York City. Employers are forbidden from requesting or using consumer credit history for employment purposes or to discriminate against an employee or applicant with regard to terms and conditions of employment.

For the purposes of the statute, “consumer credit history” includes information such as credit score, payment history, and bankruptcies. This restriction extends to information obtained either from a credit reporting agency or from the employee or applicant himself. Employers therefore must filter their use of credit reporting agencies and refrain from inquiring about credit history with applicants or employees.

Exemptions from the Amendment

The Amendment does not apply to any employer who is required by state or federal law to use consumer credit history for employment purposes. Further, the Amendment will not apply to specific employee positions, such as police officers, positions that involve a responsibility over $10,000 or more of a third-party’s assets, or positions that are required by law to be given security clearance. The exemptions in NYC are much more limited than those in other states restricting credit checks.

If an employer finds that its situation falls under one of the exemptions, the employer must still follow the procedures required by the federal Fair Credit Reporting Act (FCRA) to perform a credit check. The FCRA requires giving notice to the applicant or employee that a credit check will be performed and obtaining express consent from the applicant or employee to do so.


The Amendment authorizes a maximum of $125,000 in fines for a violation, or double this amount if the violation is willful. In addition, aggrieved parties may file suit for damages, including punitive damages. These actions are enforced by the City Commission on Human Rights, and can be brought by either the Commission or the private party that was affected. The Amendment does not penalize employers for obtaining credit information for reasons outside of employment decisions. However, the current legal tests make it very difficult to prove that any employment decision made after the receipt of credit information was not made in reliance on it.


Private employers in NYC should become aware of the dangers of obtaining consumer credit history and eliminate its use in employment decisions.

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