A new law restricting the pre-employment process takes effect in New York City today, September 3, 2015 (the Law).  As we previously reported, the Law bars most employers in NYC from requesting or considering, for employment purposes, a prospective or current employee’s “consumer credit history” – which means the creditworthiness, credit standing, credit capacity, or payment history of an individual (together, Credit) – as indicated by:

  • Such individual’s consumer credit report or credit score, or
  • Information an employer obtains directly from such individual regarding:
    • Details about credit accounts, including the individual’s number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limit, and prior credit report inquiries, or
    • Bankruptcies, judgments, or liens

Nevertheless, the Law does contain a few narrow exemptions, including that employers are permitted to consider the Credit of individuals applying for or occupying positions with regular access to trade secrets and other sensitive information, and positions “(i) having signatory authority over third party funds or assets valued at $10,000 or more; or (ii) that involve[] a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer.”

For NYC employers that perform credit checks on job candidates and/or current employees, an immediate review of existing policies and procedures regarding such credit checks – as well as a review of job positions to determine those that are exempt from the Law – is a must.  This is especially so because the Law enables aggrieved individuals to pursue private rights of action, through which they may recover the same broad damages and remedies as those available for all other claims under the employee-friendly NYC Human Rights Law. Working with experienced counsel now to align your pre-employment and other relevant practices with the Act will result in fewer headaches down the road.