New York City Banning Use of Credit History in Employment Decisions
New York City has enacted a major amendment to its Human Rights Law, banning employers from using credit history to make hiring, pay, or promotion decisions. This legislative shift is driven by the Stop Credit Discrimination in Employment Act, which officially took effect on September 3, 2015 in NYC Credit.
For many years, companies relied on credit scores, credit reports, late payments, charged-off debt, bankruptcies, and account details to filter job candidates or evaluate internal staff. Studies and class-wide discrimination claims have repeatedly demonstrated that this practice disproportionately impacts minority groups, lower-income households, women, caregivers, immigrants, students, and traditionally under-represented applicants. Critics argue that credit reports measure financial history not job performance or workplace risk.
The provision was added as an amendment to the city’s Human Rights Law and goes into effect on September 3, 2015.
What Counts as NYC Credit History Under the Ban
Under the law, the term credit history includes:
- Credit scores and credit reports
- Late or missed payments
- Collection accounts
- Bankruptcy filings
- Civil judgments
- Charged-off or settled debt
- Details about active credit accounts
If your employer asks for this information for a non-exempt role, you have legal grounds to decline.
Employer Exceptions Still Allowed
The law does provide limited exceptions, where credit history may still be screened. The role must fall into one of these categories:
✔ Positions where federal or state law requires credit review
✔ Law enforcement roles or criminal justice positions
✔ Jobs requiring public trust-based background checks
✔ State or federal security clearance roles
✔ Positions with authority over $10,000+ in assets or spending control
✔ Non-clerical roles with access to trade secrets or national intelligence
For all other roles, credit history is legally off-limits for workplace decision-making.
This legislation is largely considered pro-employee and workers should keep it in mind when employers ask for their credit histories. If employees believe that they have been illegally discriminated against based on a credit history issue, they can file a complaint with the New York Commission on Human Rights or file suit against the employer, which can lead to the payment of compensatory damages.
One of our attorneys, Philip Gordon has testified before the House and Senate’s Joint Committee on Labor and Workforce Development in favor of similar laws here in Massachusetts.
If you have any questions about this legislation or if you have faced credit or background checks in your employment, contact us today.
