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Written By ESR News Blog Editor Thomas Ahearn

With New York City passing the nation’s strongest ban on employment credit checks that took effect on September 3, 2015, businesses in the Big Apple need all the help they can get to comply with this new law that strictly prohibits most employers from using credit history to decide whether to hire, fire, or promote an individual.

The Stop Credit Discrimination in Employment Act (SCDEA) amends the New York City Human Rights Law (NYCHRL) – which prohibits discrimination in employment, public accommodations, and housing – by making credit checks an unlawful discriminatory practice for employers and employment agencies.

The New York City Commission on Human Rights (NYCCHR) released enforcement guidance on this new law that bans New York City employers with four or more from requesting or using the credit history of applicants and employees when making employment decisions.

As defined by the NYCCHR enforcement guidance, “credit history” includes credit worthiness, credit capacity, payment history, credit accounts, charged-off debts, items in collections, bankruptcies, judgments, liens, credit card debt, child support obligations, student loans, and home foreclosures.

The NYCCHR enforcement guidance makes clear that the commission plans on interpreting the SCDEA’s restrictions broadly and its exemptions narrowly. The positions that NYC businesses will still be allowed to ask about credit history, do a credit check, and use credit history in an employment decision include:

  • Police and peace officers (not private security guards); and
  • Executive-level jobs with power over finances, computer security, or trade secrets.

NYC employers should inform applicants and employees of any exemption and keep a record of use of exemptions in employment practices for a period of five (5) years from the date an exemption is used to help them respond to NYCCHR requests for information. These “exemption logs” should include:

  • Which exemption is claimed;
  • How the applicant/employee fits into the exemption;
  • Qualifications of the applicant/employee for the position/promotion;
  • Name and contact information of applicant/employee;
  • Nature of the credit history information considered and a copy of such information;
  • How the credit history information was obtained; and
  • How credit history impacted employment action.

Employers who violate the NYCHRL may have to pay lost wages and other damages to the employees affected and may be subject to civil penalties of up to $125,000. A willful violation may be subject to a civil penalty of up to $250,000. Additional information is available at

More Information about Credit Checks from ESR

Employment Screening Resources® (ESR) – ‘The Background Check Authority®’– offers employers information about states with laws regulating credit checks for employment, blogs about credit checks, and a whitepaper about using credit reports for background checks. For more information about ESR, visit

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