Find out what the new employment law means to New York City businesses.
Most employers in New York City will no longer be able to use credit checks to screen job applicants and evaluate employees, thanks to a new bill signed into law by New York City Mayor Bill de Blasio.
What does the bill mean to employers?
The bill will make it unlawful for many businesses to request or use a “consumer credit history,” which is defined as “an individual’s credit worthiness, credit standing, credit capacity, or payment history,” from applicants or current employees. This means that consumer credit reports, credit scores, and even information provided by the applicant or employee are off limits to employers. It also prohibits employers from basing any hiring, compensation, promotion or other employment-related decisions on the basis of a person’s credit history. The bill will become law September 3, 2015.
Are there any exceptions, and do you qualify?
The bill contains some exemptions for certain employers, including:
- Employers who are required by state or federal rules to use a person’s consumer credit history for employment decisions
- Positions that require employees to have a security clearance
- Employees in non-clerical roles who have access to trade secrets, intelligence information or national security information
- Positions that have signatory authority over assets valued at $10,000 or more
- Employees in roles that allow them to modify digital security systems established to prevent the unauthorized use of networks or databases
What happens if you don’t comply?
The bill will become part the New York City Human Rights Law, making it possible for employees to sue you for damages including back pay, front pay, emotional distress, attorney fees and punitive damages.
Is this only happening in New York City?
While this law is specific to employers in New York City, it is indicative of a nationwide trend to eliminate barriers to entry into the workforce. California, Chicago, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont and Washington all have similar laws on the books.
Alcott HR strives to keep all of our clients informed and compliant with the latest rules and regulations. Learn more about our regulatory compliance and risk management services.