HRW Alert: New NYC Law Prohibiting Discrimination
Based on Consumer Credit History

By Catherine Reuben, Peter Moser   September 9, 2015

New NYC Law Prohibiting Discrimination Based on Consumer Credit History

A new law took effect on September 3, 2015, which prohibits businesses in New York City from requesting or using “consumer credit history” for employment purposes, and from otherwise “discriminat[ing] against an applicant or employee with regard to hiring, compensation, or the terms, conditions or privileges of employment” based on the applicant’s or employee’s consumer credit history.  Click here for more information.

There are limited exceptions, including an exception for positions with a high level of financial authority within the employer organization, positions in which the employee could modify digital security systems, and an exception for employers that are required by state or federal law or a self regulatory organization to use an individual’s consumer credit history for employment purposes.

Employers in Massachusetts are not prohibited from requiring an employee to submit to a credit check or other consumer report as a condition of employment, provided that the employer complies with the provisions of the Fair Credit Reporting Act (FCRA).  These provisions include (among other things), obtaining a signed authorization form from the employee and sending out certain legally-required notices prior to and after taking any adverse action as a result of the information on the report.  If the consumer report includes a criminal background check, the employer must additionally comply with the Mass. Criminal Offender Record Information (CORI) laws.  Note also that failing to hire an employee due to information on a credit report can give rise to other claims, such as disparate impact discrimination.

The lawyers of HRW are here to help employers comply with federal and state laws related to background checks.  For more information, contact Catherine Reuben or Peter Moser: (617) 348-4300.

To download a PDF copy of this HRW Alert, please click here.

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