Pending Mayor DeBlasio signing the bill (Int.0261-2014) into law, New York City will join a growing a list
of U.S. localities eliminating credit checks from the background screening process.
The New York City Council passed the bill last Thursday April 16, 2015 by a vote
of 47-3. Ten states (CA, MD, CT, HI, IL, WA, OR, VT, CO, NV) and two cities
(Chicago, IL and Madison, WI) set precedent for NYC’s latest legislature.
One’s credit history, according to the bill, consists of:
- Prior bankruptcies, judgments, or liens
- Number or credit accounts
- Late or missed payments
- Charged-off debts
- Items in collection
- Credit limit
- Prior credit report inquiries
- Items in collections
This bill, an amendment to the NYC Human Rights Law, would make
it an unlawful discriminatory practice for an employer to use an individual’s
consumer credit history in making employment decisions. Due to the sensitive
nature of various employment positions that require additional layers of
security, the bill would provide exceptions to several positions.
Exemptions from the credit check ban include:
- An employer, or agent thereof, that is required by state or federal law or regulations or by a self-regulatory organization as defined in section 3(a)(26) of the securitiesexchange act of 1934
- Police officers or any position with a law enforcement or investigative function
- A position in which an employee is required to be bonded under City, state, or federal law
- A position that requires security clearance under federal or state law
- A non-clerical position having regular access to trade secrets, intelligence information, or national security information
- A position having signatory authority over third party funds or assets valued at $10,000 or more
- A position that involves fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer
- A position with regular duties that allow the employee to modify digital security systems established to prevent the unauthorized use of the employer’s or client’s networks or databases
New York City employers will need to pay close attention as
this unfolds. Should this bill become law, modification of employers’ background
screening policies will be necessary.
