On April 16, 2015, the New York City Council passed a bill to amend the New York City Human Rights Law (NYCHRL) to prohibit employers from requesting or using an individual’s credit history in making employment decisions. The bill (Intro. No. 261-A, 2014) would make it an unlawful discriminatory practice under the NYCHRL for any employer, labor organization, or employment agency to request or use the consumer credit history of an employee or an applicant for the purpose of making any employment decisions, including those related to hiring, compensation, or any other terms of employment. The bill defines “consumer credit history” to include an individual’s credit worthiness, credit standing, credit capacity, and payment history as indicated by a consumer credit report, credit score, or any information an employer obtains directly from an individual.

The bill includes an exemption from the credit check prohibition for: (1) positions with signatory authority over third-party funds or assets valued at $10,000 or more; (2) positions with a fiduciary responsibility to the employer and the authority to enter financial agreements on the employer’s behalf valued at $10,000 or more per agreement; (3) employees required to possess security clearance under federal law or any state law; (4) non-clerical positions that have regular access to trade secrets, intelligence information, or national security information; (5) police and peace officers; (6) Department of Investigation (DOI) positions in law enforcement or where investigative functions are involved; (7) appointed positions subject to a DOI background investigation that are deemed to carry a high degree of public trust; (8) employees who are personally required to be bonded under local, state, or federal law; (9) positions that regularly allow an employee to modify digital security systems established to prevent the unauthorized use of the employer’s (or the employer’s client’s) networks or databases; and (10) employees obligated to disclose information to the New York City Conflicts of Interest Board regarding creditors or debts.

The bill will become effective 120 days after New York City Mayor Bill de Blasio signs it into law, which he is expected to do shortly. Although many cities and states have adopted similar legislation, the New York City legislation is viewed as one of the most strenuous in the country, insofar as it creates a private right of action under the NYCHRL. Under the NYCHRL, employers that improperly use employee consumer credit histories may be subject to compensatory damages (including back and front pay), punitive damages, and attorneys’ fees. New York City employers should therefore carefully review their practices to ensure that they do not permit consumer credit histories to be considered in employment decisions, or that the position falls within one of the new law’s exemptions. We will continue to monitor the legislation pending final adoption. The text of the bill may be found here.

Evan B. Citron is an associate in the New York City office of Ogletree Deakins.

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