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Last week, New York City Council passed a bill aimed at prohibiting employers from using credit history when making employment decisions. According to law firm Seyfarth Shaw, employers:

  • Cannot use the applicant’s credit history when making employment purposes; and
  • Cannot request the applicant’s credit history for employment purposes.

Additionally, the bill’s protection extends to current employees because employers cannot use credit history when considering “compensation, or the terms, conditions or privileges of employment.

There are exceptions to the law, as referenced in the Seyfarth Shaw blog. They are as follows:

  • Employers required by state or federal law or regulations, or by a self-regulatory organization as defined in Section 3(a)(26) of the Securities Exchange Act to use an individual’s consumer credit history for employment purposes;
  • Police officers, peace officers, or those in a position with law enforcement or investigative function at the department of investigation (or in certain positions subject to background investigation by the department of investigation);
  • Positions requiring the employee to be bonded by City, state or federal law;
  • Positions requiring the employee to possess a security clearance under federal or state law;
  • Non-clerical positions having regular access to trade secrets, intelligence information or national security information;
  • Positions having signatory authority over third party funds or assets valued at $10,000 or more, or positions that involve a fiduciary responsibility to the employer with authority to enter financial agreements on behalf of the employer for $10,000 or more;
  • Positions that allow the employee to modify digital security systems protecting the employer or client’s networks or databases.

The legislation was passed on April 16, 2015, and Mayor Bill DiBlasio is expected to sign it. When the bill is signed, the law will go into effect 120 days later.

Corporate Screening will continue to monitor the progress of the bill and will keep you informed with emerging details, including effect dates.