New York State Prohibits Employers from Using Credit History in Employment Decisions

New York State has amended its Fair Credit Reporting Act to prohibit most employers from using credit history information in employment decisions, with the new restrictions taking effect April 18. Employers should take the necessary steps to reassess hiring and screening practices and ensure compliance.

This development expands existing restrictions and reflects a broader regulatory trend limiting the use of screening tools that are not closely tied to job performance. The amended law reflects increasing scrutiny of employment selection criteria. Employers should reassess hiring frameworks to ensure compliance and defensibility under evolving standards.

New York joins ten other states that have enacted legislation concerning the use of consumer credit history in employment decisions, including: California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington. Additionally, several major cities, including New York City, Chicago, Philadelphia, and Washington D.C., have also enacted similar restrictions.