Barclay Damon
Barclay Damon

Legal Alert

New York City Prohibits Discrimination Based on Consumer Credit History

On May 6, 2015, New York City Mayor Bill de Blasio signed a bill prohibiting employment discrimination based on consumer credit history. The legislation amends the New York City Human Rights Law (“NYCHRL”) and makes it unlawful for an employer, labor organization, employment agency, or agent thereof “to request or to use for employment purposes the consumer credit history of an applicant for employment or employee, or otherwise discriminate against an applicant or employee with regard to hiring, compensation, or the terms, conditions or privileges of employment based on the consumer credit history of the applicant or employee.”

The NYCHRL defines an individual’s “consumer credit history” as the individual’s credit worthiness, credit standing, credit capacity, or payment history, as indicated by: (a) a consumer credit report; (b) credit score; or (c) information an employer obtains directly from the individual regarding (1) details about credit accounts, including the individual’s number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limit, prior credit report inquiries, or (2) bankruptcies, judgments or liens.

The amendment to the NYCHRL does not apply to an employer or agent thereof that is required by law, or a self-regulatory organization, to use an individual’s consumer credit history for employment purposes; and to persons applying for positions or employed: 

  • as police officers, peace officers, or in a position with a law enforcement or investigative function at the department of investigation; 
  • in a position that is subject to background investigation by the department of investigation, provided, however, that the appointing agency may not use consumer credit history information for employment purposes unless the position is an appointed position in which a high degree of public trust has been reposed; 
  • in a position in which an employee is required to be bonded under law; 
  • in a position in which an employee is required to possess security clearance under law; 
  • in a non-clerical position having regular access to trade secrets, intelligence information or national security information; 
  • in a position having signatory authority over third-party funds or assets valued at $10,000 or more; or that involves 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 
  • in a position with 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.

Nor does the amendment preclude employers from requesting or receiving consumer credit history information pursuant to a lawful subpoena, court order or law enforcement investigation.

The new law is effective September 3, 2015. New York City is the twelfth jurisdiction in the country to prohibit employers from considering an individual’s consumer credit history for employment purposes.

Additional guidance regarding this new law may be issued. However, employers should carefully review their hiring practices now.

If you have any questions, please contact the Hiscock & Barclay lawyer with whom you normally work or any attorney in our Labor & Employment Practice Area.