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Effective April 21, 2026, it will be an “unlawful discriminatory practice” for employers in New York to “request or to use” information showing an applicant's or employee's credit worthiness, credit standing, credit capacity or payment history for employment purposes, whether for hiring, compensation determinations or setting other terms and conditions of employment. Exceptions are many, but include:
- Employers who are required by state or federal law or the SEC to use such information
- Law enforcement agencies
- Employers whose employees must be bonded under state or federal law
- Employees who are required by state or federal law to possess security clearances
- “Non-clerical” employees with access to trade secrets
- Employees with signatory authority over third party funds or assets worth $10,000 or more
- Employees with authority to bind their employers to financial agreements worth $10,000 or more
- Employees with authority to modify access to digital security systems designed to safeguard the employer's computer systems and databases.
The law places additional “use” restrictions on state and municipal government agencies.
The law amends New York's Fair Credit Reporting Act (New York General Business Law sections 380-a and 380-b). The law allows harmed applicants or employees to bring a lawsuit against the employer to recover actual damages and attorneys' fees, as well as punitive damages if the applicant or employee can establish that the violation was knowing or willful.
On its face, the law appears to apply broadly to any individual whose information was unlawfully requested or used in New York. This stands in contrast to New York's general antidiscrimination law, the New York State Human Rights Law, which has been interpreted by New York courts to apply only where the alleged discriminatory conduct has sufficient “impact” within the state. Any employers based in New York or conducting credit history checks for applicants or employees that may work or live in New York should consult with legal counsel about whether their current practices comply with the law.
New York's law follows similar laws in New York City, California, Illinois, Maryland and Oregon.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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