The New York City Commission on Human Rights amended the New York City Human Rights Law (“NYCHRL”) by adding the Stop Credit Discrimination in Employment Act (“SCDEA”). The SCDEA went into effect on September 3, 2015 and makes it unlawful and discriminatory for employers, labor organizations, and employment agencies to request or use the consumer credit history of an applicant for the purpose of making any employment decisions, including hiring, compensation, and other terms and conditions of employment. N.Y.C. Admin. Code §§ 8-102(29), 8-107(24). The SCDEA also makes it unlawful and discriminatory for a city agency to request or use, for licensing or permitting purposes, information contained in the consumer credit history of an applicant, licensee or permittee. N.Y.C Admin. Code § 8-107(9)(d)(1).
The idea behind this Act is that an applicant’s credit history is not relevant to employment decisions. No correlation has been found between credit history and job performance.
Under the SCDEA, consumer credit history means a person’s “credit worthiness, credit capacity, or payment history, as indicated by: a) a consumer credit report; b) credit score or c) information an employer obtains directly from the individual, including (1) Details about credit accounts, including the individual’s number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limit, prior credit report inquiries, or (2) bankruptcies, judgments or liens.” N.Y.C. Admin. Code § 8-102(29).
Requesting or using consumer credit history of an applicant or employee for employment decisions is discriminatory even if the use does not lead to a negative outcome.
The only exceptions to this Act are: Employers required by state or federal law or by the Financial Industry Regulatory Authority (“FINRA”) to use an individual’s consumer credit history for employment purposes; Police Officers, peace officers, or positions with a law enforcement or investigative function at the Department of Investigation (“DOI”); Positions subject to a DOI background investigation; Positions requiring bonding under federal, state, or City law or regulation; Positions requiring security clearance under federal or state law; Non-clerical positions having regular access to trade secrets, intelligence information, or national security information; Positions involving responsibility for funds or assets worth $10,000 or more; and positions involving digital security systems. These exemptions only apply to positions and not to the actual applicants or employees.
Using consumer credit history for employment purposes can have penalties up to $125,000 for violations and up to $250,000 for violations that are caused by willful, wanton, or malicious conduct if the claim is prosecuted by the NYC Human Right Commission. If a lawsuit is filed in court, available remedies include back pay, front pay, compensatory damages, attorneys’ fees and punitive damages for employees or applicants who succeed with their claims under the SCDEA.
The New York City employment lawyers at Fitapelli & Schaffer, LLP are strongly committed to protecting the rights of hard working employees. If you believe a credit check was performed, or you have been discriminated against by your employer or a prospective employer, please contact us at (212) 300-0375, or visit our website at www.fslawfirm.com.