NYC Credit Check Law Takes Effect

Written by Daniel W. Morris

Earlier this year, we wrote regarding an amendment to the New York City Human Rights Law that makes it unlawful for an employer to use an individual's credit history to make employment decisions. The law goes into effect on September 3.

The law contains a limited number of exceptions where an employer can use credit history to make an employment decision. Those exceptions include:

  • financial institutions required by law to use an individual's credit history;
  • a position in which an employee is required to be bonded under city, state or federal law;
  • a position in which an employee is required to possess security clearance under federal law or the law of any state;
  • a non-clerical position that has regular access to trade secrets, as narrowly defined by the bill; intelligence information; or national security information;
  • a position where the employee has (1) signatory authority over third-party funds or assets valued at $10,000 or more; or (2) fiduciary responsibility and authority to enter financial agreements valued at $10,000 or more on behalf of the employer;
  • a position with regular duties that allows the employee to modify digital security systems established to prevent the unauthorized use of the employer's or client's networks or databases.

New York City employers that currently use credit histories for some or all of their employment decisions should be prepared for the changes to their employment practices that this amendment will require.

If you have questions about this update or integrating this law into your employment practices, please contact the author of this article or an attorney at Clifton Budd & DeMaria, LLP.

About the Author
Daniel W. Morris
Daniel W. Morris serves as Partner at Clifton Budd & DeMaria, LLP. He focuses his practice on employment litigation in...
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