New York employers now face a major change in hiring and employment compliance rules. As of April 2026, most employers across New York State are no longer allowed to request or use an applicant’s or employee’s credit history when making employment-related decisions. This includes hiring, compensation, promotions, transfers, retention, and other terms of employment.
For many employers, this represents a major shift in how background screening is handled. Businesses that once treated credit checks as a routine part of the hiring process must not rethink when and whether that information can legally be used.
While New York City employers have operated under similar restrictions for years, the law now applies statewide. Employers outside the city that previously relied on credit checks as part of their screening process should ensure their practices have already been updated to comply with the new requirements. This is especially important for multi-location employers with remote employees throughout New York.
What counts are “consumer credit history?”
The law broadly defines consumer credit history. It includes more than just credit reports and credit scores.
Employers generally may not consider information related to:
- Credit accounts or balances
- Payment history
- Late or missed payments
- Charged-off debts
- Collections activity
- Bankruptcies
- Judgments or liens
- Prior credit inquiries, and
- Credit limits or credit worthiness.
Exceptions
Credit checks may remain permissible for certain positions where they are legally required or where the nature of the role justifies additional financial screening. These may include law enforcement and investigative positions, roles requiring security clearance or bonding, certain public appointments, positions with authority over significant third-party funds, fiduciary responsibilities involving major financial transactions, and select cybersecurity-sensitive roles.
However, employers should not assume a position automatically qualify as an exception. Some categories are narrower than they may appear. For example, access to general company information or customer lists may not be enough to satisfy the trade exemption.
What Employers Need to Do
Now that the law is in effect, employers need to review hiring procedures, job applications, background screening practices, vendor instructions, and internal policies to confirm that credit history is no longer being requested where prohibited. Employers need to also carefully evaluate which roles, if any, legitimately fall within one of the law’s exceptions and ensure job descriptions and screening procedures accurately reflect those distinctions.