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New York City Employers Banned from Running Credit Checks on Job Applicants

Employers no longer allowed to consider credit history during hiring process for many positions

Recent changes to New York labor laws have imposed new limitations upon an employer’s ability to consider the credit history of job applicants during the hiring process. While many employers consider an applicant’s credit history as a sign of character, the use of this data has long been viewed as detrimental by the state of New York. The recent alterations to the law clearly reflect that philosophy.

After carefully reviewing the new limitations imposed by the changes to the law, the New York employment law attorneys at Hepworth, Gershbaum & Roth, PLLC expect the new limitations to impact employees and employers alike.

What does this mean for job applicants?

Job applicants may experience the greatest benefit from the changes, especially those with limited or unfavorable credit histories. When such things cannot be considered, an applicant may land a position he or she may have otherwise been passed over for.

On the other side of the coin, there may be negative ramifications for applicants with strong credit histories. When all things are equal amongst applicants, other than credit history, those with strong credit may lose the differentiator they need to land the job.

What does this mean for employers?

Many employers, especially those who have not regularly consider credit histories of applicants, may see little to no impact resulting from the ban. Employers that place value on an applicant’s credit information must alter their procedures and policies regarding the use of such data.

Unfortunately, adherence to these limitations is not always as clear as one might think, especially for organizations filling positions that qualify for an exemption from the new regulations. Determining whether or not an applicant’s credit history can be considered may involve discussions with legal experts or conversations directly with the Department of Labor.

Navigating the gray areas

The new laws do identify specific instances in which an employer may use the results of a credit check while considering an applicant for employment. In many cases, these situations involve applications attempting to gain employment with a public body or governmental organization.

Other cases involve less clear rules. The laws allow employers to conduct credit checks on applicants for positions involving:

  • Responsibility over another party’s funds,

  • Security requirements, including those imposed by a national securities exchange, registered securities association, or a registered clearing agency

  • Access to classified company data

  • Required security clearances

While these rules may seem to be clearly defined at first glance, the do leave much to the interpretation of employers. For example, one employer may find the consideration of a credit check for a financial planner an allowable step under these new laws. Other organizations may view the process differently and avoid the use of credit data during the hiring process of the same or similar positions.

In the end, the Department of Labor has the final say over situations in which the use of credit information is allowable.

Learn more about New York credit check laws during a free consultation with one of our experienced employment lawyers

At Hepworth, Gershbaum & Roth, PLLC our New York employment law attorneys are committed to maintaining an up-to-date knowledge of all state and federal labor laws. Our attorneys are also dedicated to helping clients understand the impact changes to the law may have on their own unique situations. If you have questions regarding the impact the new laws may have on your career, it may be helpful to speak to an attorney. To schedule a free consultation with one of our New York employment lawyers, contact us online or call 212-545-1199.





Contact an employment law attorney in New York today for a free initial consultation and determine whether you have a case. For a free initial consultation, you can contact us online or by phone.

CALL US TODAY! 212-545-1199