New York City Credit Check Law for Hiring and Employment

In New York City, the Fair Credit Reporting Act (FCRA) and the New York City Human Rights Law regulate credit checks for hiring and employment purposes.

Employers in NYC can only conduct a credit check if the position involves managing finances, accessing confidential information, or supervising others.

The FCRA requires employers to provide a written notice to job applicants before requesting a credit report, and to obtain their consent.

Employers must also inform applicants of their rights under the FCRA and provide a copy of the report, if requested.

NYC employers are prohibited from requesting or using a job applicant or employee's consumer credit history to make employment decisions. This includes hiring, compensation, promotions, and benefits.

Employers cannot ask about your credit score, available credit, credit card debt, student loan debt, child support obligations, missed or late payments, judgments, liens, foreclosures, or bankruptcies. You are not required to answer these questions if they are asked.

Even if you voluntarily answer questions about your credit history, you can still bring a claim against your employer or potential employer. Employers may try to get around this prohibition by hiring another company to perform a credit check, but this is also prohibited.

Employers cannot use services, websites, or third-party companies to research an employee or potential employee's credit history. Additionally, even if an employer asks you to sign a document agreeing to a credit check, they violate New York City employment law.

Here are some specific actions that are prohibited:

To stay compliant with NYC's credit check law, employers need to keep an "exemption log" to assist them in responding to information requests by the NYCCHR.

The exemption log should include the name and contact information of the applicant/employee.

Employers should also keep a record of the qualifications of the applicant/employee for the position/promotion.

In addition, the exemption log should note the nature of the credit history information considered and a copy of such information.

Employers must also document how the credit history information was obtained.

The exemption log should also include information on how the credit history impacted any employment action.

Here's a summary of the information that should be included in the exemption log:

NYC employers cannot request or use a job applicant or employee's consumer credit history to make employment decisions, such as hiring, compensation, promotions, or benefits.

Employers must not request an applicant or employee to provide a credit report, either orally or in writing. They also cannot pull an applicant's or employee's credit report from a credit reporting agency.

Employers should audit their hiring practices to comply with all local, state, and federal credit reporting laws. This includes reviewing job descriptions and organizational charts to determine if any positions fit within one of the exemptions.

Employers must instruct recruiters and those who perform background checks to confer with legal counsel on whether consumer credit history may be used in connection with hiring or other employment-related decisions.

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Employers must confirm that employment, placement, and temporary agencies, as well as background check providers, have revised their forms and procedures in compliance with the Credit Check Law for NYC applicants and employees.

The following actions are prohibited:

In New York City, there are strict restrictions on using credit history in employment decisions. Employers cannot request or use a job applicant or employee's consumer credit history to make employment decisions, such as hiring, compensation, promotions, or benefits.

Covered employers are prohibited from requesting an applicant or employee to provide a credit report, either orally or in writing, and from pulling an applicant's or employee's credit report from a credit reporting agency. These actions violate the Stop Credit Discrimination in Employment Act (SCDEA), even if they do not lead to an adverse employment action.

Employers are barred from inquiring about your credit history, including credit score, available credit, credit card debt, student loan debt, child support obligations, missed or late payments, judgments, liens, foreclosures, and bankruptcies. You are not required to answer these questions, and even if you answer them voluntarily, you can still bring a claim against your employer or potential employer.

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The SCDEA defines consumer credit history as an individual's credit worthiness, credit standing, credit capacity, or payment history, as indicated by a consumer credit report or credit score. City law makes it an unlawful discriminatory practice to request or use an applicant or employee's consumer credit history for employment purposes.

Employers cannot request information about applicants' credit, including credit score, credit limit, payment history, number of credit accounts, late or missed payments, charged-off debts, items in collections, prior credit report inquiries, bankruptcies, judgments, or liens. This includes any attempts to get around the prohibition by hiring another company to perform a credit check or asking employees to sign documents agreeing to a credit check.

Certain types of positions are excluded from the amendment's provisions, including police officers, government-appointed positions with a high degree of public trust, positions requiring a bond, security clearance, or access to trade secrets or national security information, and positions with signatory authority over third-party funds or assets valued at $10,000 or more.

Here are some examples of information that is off-limits for employers to request:

Employers should audit their hiring practices to comply with all local, state, and federal credit reporting laws.

Certain jobs in New York City are exempt from the credit check ban. These include positions with a high degree of public trust, such as government-appointed roles.

Police officers and those involved in law enforcement or investigative functions are also excluded. They require background checks and security clearances that involve credit checks.

Positions that require a bond under city, state, or federal law are also exempt. This includes roles that involve managing third-party funds or assets valued at $10,000 or more.

Security clearance under federal law or state law also excludes certain jobs. These roles require access to sensitive information and must undergo thorough background checks.

Digital security systems positions are another exception. They are established to prevent unauthorized use of networks or databases, and require a different level of screening.

Here's a list of the specific exemptions: