1. law, govt and politics

New York City Credit History Restrictions
April 16th, 2015, the New York City Council passed a bill that restricts the use of applicants’ credit history for
employment purposes. After Bill 261-A is signed and enacted, NYC will become the second city and 12th jurisdiction
overall to make employers’ consideration of credit history an unlawful discriminatory practice. California, Colorado,
Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, Washington, and Chicago have similar legislation in
place. You can read more about the laws of these jurisdictions by visiting Accurate Background’s Legislative Updates.
What does the law prohibit, in plain English?
Employers cannot request or use a job applicant’s or current employee’s credit history in making an employment
decision. This means an employer shall not procure credit reports as part of its pre-hire screening process, nor shall it
consider current employees’ credit histories with regard to “compensation or the terms, conditions, or privileges of
employment.”
Which employers are affected?
Employers in New York City that employ four or more individuals must comply with the law.
When does the law go into effect?
The New York City Council approved the Bill April 16th, 2015. It is awaiting approval by Mayor Bill DeBlasio and will go
into effect 120 days after Mayoral approval.
Are there exceptions to the law?
Yes. Employers required by Federal law or Federal regulations are exempt from the law’s prohibitions. Law enforcement,
investigative employers, and employers requiring security clearances are also exempt.
Where many other jurisdictions provide broad exemptions for individuals acting in a managerial capacity, NYC takes a
more restrictive approach. The law exempts only positions in which the employee will have authority over $10,000 in
assets, have regular access to trade secrets and/or national security information, or have the ability to modify digital
security systems protecting the employer’s network.
What are the penalties imposed under the law?
The City Commission on Human Rights is tasked with enforcement, and will request from City agencies and nongovernmental employers information regarding their use of the exemptions established under the law. Additionally,
aggrieved individuals may resort to civil action, with the potential for punitive damages and attorneys’ fees.
Where can I read the statutory text?
Intro-261-A can be found on The New York City Council’s website. You can click here to access the bill directly.
Recommendations
We recommend you consult your legal counsel to discuss your organization’s policies and procedures, including your
company’s application, background check components, and adverse action process to ensure compliance with the
changing laws.
Contact Accurate Background
For additional questions, please contact Accurate Background at 800.216.8024. For more information regarding recent
Credit Restriction Laws in other states and jurisdictions, visit our Legislative Updates page.