New York City Credit Check Law for Employees

New York City is one of several cities across the country that prohibits employment-related credit checks. 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. As a result, it’s illegal for an employer or potential employer to make employment decisions based on your credit history.

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 by filing a claim with the NYC Commission on Human Rights. 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 schedule your initial consultation and learn how we will advocate for your right to compensation.

New York City Employers Cannot Run a Credit History Check

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

  • Hiring
  • Compensation
  • Promotions
  • Benefits
  • Any other terms and conditions of employment

Some employers have tried to get around this prohibition by hiring another company to perform a credit check on employees or potential employees. Hiring a third-party company to run a credit history check is also prohibited by the NYC Commission on Human Rights. Additionally, even if an employer asks you to sign a document agreeing to a credit check, they are violating New York City employment law. Under no circumstances can employers use services, websites, or third-party companies to research an employee or potential employee’s credit history.

Employers Cannot Ask About Your Credit Score

Your employer may try to ask you about your credit history. An employer may try to 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. When employers ask questions about the following type of credit history issues, they are violating New York City law:

  • Credit history
  • Previous bankruptcies
  • Credit standing
  • How much credit you have
  • Child support obligations
  • Credit card debt
  • Foreclosures
  • Student loan debt
  • Missed or late payments
  • Judgments
  • Bankruptcies
  • Liens 

Exceptions to the Prohibition Against Employment Credit Check

There are eight exceptions to the prohibition against employers using an employee’s credit history to make decisions. The New York City Human Rights Commission made it clear that these exceptions should be narrowly construed. Additionally, these exemptions don’t apply to an entire industry or type of employer. 

Instead, they apply to employment positions or roles, not individual applicants or employees. The burden of proving that an exemption exists is on the business, not the employee filing the claim. Employers must prove the requirements for the exemption exist by a preponderance of the evidence. The SCDEA provides the following eight exemptions:

  1. Employers required by state or federal law, or the Financial Industry Regulatory Authority (“FINRA”) to use a person’s consumer credit history for employment purposes
  2. Peace officers, police officer, or positions with an investigative or law enforcement function at the Department of Investigation (“DOI”)
  3. Positions that require a DOI background investigation
  4. Positions that require bonding under city, state, or federal laws or regulations
  5. State or federal-level positions that require a security clearance
  6. Non-clerical positions that involve access to intelligence, information, trade secrets, or national security information
  7. Positions that include responsibility for assets or funds worth $10,000 or more
  8. Positions involving digital security systems

Does the NYC Human Rights Law Protect Me?

Most NYC employees are covered by the NYC Human Rights Law, even when they are part-time employees. Employers with four or more employees must abide by the NYC Human Rights Law. Individual business owners are counted toward this number. The four employees don’t have to all work in New York City for this law to apply. 

Interns, most independent contractors, domestic workers, undocumented workers, and probationary employees are not protected under this law. If you aren’t sure whether your employer or potential employer is bound by the law, the employment lawyers at Lipsky Lowe LLP can advise you of your rights. The NYC Human Rights Law typically protects employees in the following job positions:

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

What Damages Am I Entitled to Under the NYC Human Rights Law?

Many employers claim that they weren’t aware that they couldn’t run credit checks on employees. This excuse isn’t enough to prevent them from paying fines and penalties. The New York City Human Rights Commission will impose penalties of up to $135,000 for violations of the Human Rights Law. When the violation is willful, wanton, or malicious, the Commission can fine the business up to $250,000. Employees who file claims are entitled to the following types of remedies:

  • Back and front pay
  • Compensatory damages
  • Punitive damages in some cases
  • Attorneys’ fees and costs

Contact an NYC Credit History Lawyer Today

If you believe that an employer unlawfully denied you employment because of your credit report, you may have a right to pursue legal action. You may be entitled to back and front pay, attorney fees, and compensatory damages. The sooner you discuss your claim with a skilled New York City employment lawyer, the better. You only have a limited amount of time to file a claim for compensation. Contact the experienced employment lawyers Lipsky Lowe LLP to schedule your initial consultation.