New York City to Limit the Use of Credit Reports for Employment Purposes

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Credit Reports for Employment Purposes

Special Announcement to all City of New York employers:

The City of New York has passed Int 0261-2014, which limits the use of credit reports for all employers. The bill goes into effect 120 days from enactment, on April 16th, 2015.

The law amends Section 8-107 of the New York City Administrative Code with the following:

24. Employment; consumer credit reports.

(a) Except as provided in this subdivision, it shall be an unlawful discriminatory practice for an employer, labor organization, employment agency, or agent thereof to request or to use for employment purposes the consumer credit reports 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 report of the applicant or employee.

(b) Paragraph (a) of this subdivision shall not apply to:

(1) an employer, or agent thereof, that is required by state or federal law or regulations or by a self-regulatory organization as defined in section 3(a)(26) of the securities exchange act of 1934, as amended to use an individual’s consumer credit report for employment purposes;

(2) persons applying for positions as or employed:

(A) as police officers or peace officers, as those terms are defined in subdivisions thirty-three and thirty-four of section 1.20 of the criminal procedure law, respectively, or in a position with a law enforcement or investigative function at the department of investigation
(B) in a position that is subject to a background investigation by the department of investigation, provided, however, that the appointing agency may not use consumer credit reports for employment purposes unless the position is an appointed position in which a high degree of public trust, as defined by the commission in rules, has been reposed.
(C) in a position in which an employee is required to be bonded to City, state or federal law;
(D) in a position in which an employee is required to possess security clearance under federal law or the law of any state;
(E) in a non-clerical position having regular access to trade secrets, intelligence information or national security information;
(F) in a position: (i) having signatory authority over third-party funds or assets valued at $10,000 or more; or (ii) 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.
(G) 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.

The complete text can be found here: New York City Council Bill 0261-2014 Regarding Credit Reports

This law will require a review of the hiring process in place, including the waiver that all applicants must complete, and may require changes to that process.

In order to comply with this law, Justifacts recommends that you consult with your legal department. This will help your company determine what changes, if any, need to be made to your hiring process.

It is important to note that Justifacts is providing this information as a service to our clients. None of the information contained herein should be construed as legal advice, nor is Justifacts engaged to provide legal advice. We go to great lengths to make sure our information is accurate and useful. We recommend you consult your attorney or legal department if you want assurance that our information, and your interpretation of it, is appropriate to your particular situation.


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