Have you been fired, demoted, or denied a job based on your credit history in New York City? If so, you may be entitled to compensation. The Stop Credit Discrimination in Employment Act (SCDEA) makes it illegal for employees to use or request the consumer credit check of a job applicant or employee to make employment decisions. 

At Lipsky Lowe LLP, we hold New York City employers accountable when they discriminate against employees based on their credit history. Contact us today to learn how we can help protect your employment rights and seek just compensation.

NYC Employers Cannot Check Your Credit History

In 2015, New York City joined California, Hawaii, Illinois, Washington, and other states in prohibiting credit reports in employment. The SCDEA amended the New York City Human Rights Law (NYCHRL) to prohibit employer credit checks in certain situations. Employers cannot request or use a job applicant or employee’s consumer credit history to make employment decisions, such as:

  • Hiring
  • Compensation
  • Promotions
  • Benefits

Covered employers are prohibited from:

  • Requesting an applicant or employee to provide a credit report (orally or in writing). 
  • Pulling an applicant’s or employee’s credit report from a credit reporting agency. 

Such actions violate the SCDEA, even if they do not lead to an adverse employment action. 

What Does Credit History Discrimination Look Like?

Suppose an applicant applies for an insurance adjuster position. The employer requests a consumer credit history from the applicant on the phone. The employer receives the credit history and refuses to hire the candidate. While the employer’s request for the credit history constitutes a violation of the SCDEA, proving that they took an adverse employment action against the employer can be challenging.

This makes having informed legal representation essential. That’s where Lipksy Lowe steps in. Our employment lawyers have comprehensive knowledge of the SCDEA and NYCHRL and a proven ability to hold employers accountable for discriminating against job applicants and employees based on their credit profile.   

What Employees Are Covered Under the SCDEA?

The SCDEA prohibits New York City employers from using an applicant or current employee’s consumer credit history to discriminate against them. However, the law exempts certain positions, such as:

  • Positions in law enforcement–This includes police officers, peace officers, and other law enforcement positions that require a credit check by law.
  • High-level financial responsibility roles–Positions with financial authority over assets, including signing authority over $10,000 or the ability to modify digital security systems.
  • Specific roles at financial institutions–Positions with banks, credit unions, or other financial institutions where credit checks are required by state or federal law.
  • Employees required by law to have security clearance–Roles that mandate national or state security clearance.
  • Positions involving access to trade secrets–Jobs that allow access to highly confidential information or trade secrets as defined by the NYC Human Rights Law.
  • Non-clerical roles in the Department of Investigation – Positions directly supporting or working within this department or its responsibilities.

These exemptions are to be construed narrowly. The employer has the burden of proof to show that the exemption applies. 

Proving an Exemption Applies

The SCDEA exemptions do not apply to entire industries or employers but to specific positions or roles, not individual applicants or employees. It’s the employer’s responsibility to prove that an exemption applies, not the employee’s. If an employer claims an exemption to avoid liability, they must show that it applies by a preponderance of the evidence.

When an employer claims an exemption, they must demonstrate that the position falls within one of the listed exemptions. They must inform the applicant or employee that the position is exempt from SCDEA rules. Additionally, employers must keep a record of the exemption for at least five years, including details about the job’s duties and the qualifications needed for the position.

Employers Cannot Ask About Your Credit History

Employers are barred from inquiring about your credit history, including:

  • Credit score
  • Available credit 
  • Credit card debt
  • Student loan debt
  • Child support obligations
  • Missed or late payments
  • Judgments
  • Liens
  • Foreclosures
  • Bankruptcies

Your employer may try to ask you about your credit history or bring the topic up in a casual conversation. You are not required to answer these questions. Even if you answer questions about your credit history voluntarily, you can still bring a claim against your employer or potential employer.

Does the NYC Human Rights Law Protect Me?

The NYC Human Rights Law covers most NYC employees, including part-time employees. It applies to employers with four or more employees. The law typically protects employees such as:

  • Salespeople
  • Clerical staff
  • Administrative staff
  • Restaurant servers
  • Bartenders 
  • Bank tellers
  • Movers
  • Fast-food workers

Interns, most independent contractors, domestic workers, undocumented workers, and probationary employees are not protected under this law. If you aren’t sure whether the law binds your employer or potential employer, our employment lawyers can advise you of your rights.

What Is a Consumer Credit Report Under the SCDEA?

The SCDEA defines a consumer credit report as “any written or other communication of any information by a consumer reporting agency that bears on a consumer’s creditworthiness, credit standing, credit capacity or credit history.”

A consumer reporting agency also includes companies that provide reports containing the following information:

  • Information about consumer’s payment history to creditors.
  • The amount of a consumer’s credit and credit consumption.
  • Information from debt buyers and collectors.

In short, any person or business that assembles or evaluates consumer credit information for monetary fees, dues, or on a cooperative nonprofit basis is considered a consumer credit reporting agency. Unlike the New York State Fair Credit Reporting Act (“FCRA”), the SCDEA doesn’t require a person or entity to regularly assemble or evaluate consumer credit histories to be considered a consumer reporting agency. 

How NYC Employers Violate SCDEA

Some employers have tried to get around this prohibition by hiring another company to perform a credit check on employees or potential employees. Employers cannot use services, websites, or third-party companies to research an employee or potential employee’s credit history. Additionally, even if an employer asks you to sign a document agreeing to a credit check, they violate New York City employment law.. Employers should audit their hiring practices to comply with all local, state, and federal credit reporting laws. 

Which Agency Enforces the SCDEA?

The New York City Commission on Human Rights enforces the SCDEA. Employees can file a complaint with the commission within one year of the discriminatory act occurring or pursue a lawsuit within three years of the act occurring.

Penalties and Available Damages Under the SCDEA

Employers who violate the SCDEA face significant fines and penalties:

  • First-time violation: A civil penalty of up to $125,000.
  • Repeat, willful, or malicious violation: The fine for violations considered willful or harmful can reach $250,000.

Additionally, affected employees may seek damages, including back pay, front pay, and other compensatory damages.

How Our Firm Can Help

At Lipsky Lowe LLP, we understand how damaging it can be when employers make decisions based on your credit history. The Stop Credit Discrimination in Employment Act protects you from this form of discrimination. Our experienced employment law attorneys are here to help you navigate the legal process and hold employers accountable.

Do you suspect you were denied a job, fired, or demoted because of your credit history? You can depend on us to thoroughly evaluate your case, gather the necessary evidence, and build a solid legal strategy to protect your rights. We will leverage our knowledge of the SCDEA to fight for the compensation you deserve.

We will prioritize your best interests, whether negotiating a settlement or taking your case to court. Don’t let credit discrimination go unchecked—let us help you seek justice and protect your rights.

Contact an NYC Credit History Lawyer Today

Credit should not be the reason an otherwise qualified employee is denied employment. Thankfully, the SCDEA provides employees with broad protections from consumer credit checks, and state and federal laws offer employees throughout New York additional legal protections. The sooner you discuss your claim with a skilled employment lawyer, the better. You only have a limited amount of time to file a compensation claim. Contact Lipsky Lowe LLP to schedule your initial consultation.