United States: NYC Commission Issues Guidance On The Citywide Bill Restricting Employers From Using Credit Information In Employment Decisions

As previously reported, on May 6, 2015, New York City Mayor Bill de Blasio signed the "Stop Credit Discrimination in Employment Act" (Act), which makes it unlawful for most employers to use an applicant's or employee's credit history for employment purposes, except in certain circumstances.1  The New York City Council intended it to "be the strongest bill of its type in the country prohibiting discriminatory employment credit checks," and joined the growing list of states and cities that have enacted similar laws, such as California, Chicago, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont and Washington.2 

Three days before the Act went into effect on September 6, 2015, the New York City Commission on Human Rights (NYCCHR), which is responsible for enforcing the Act, issued its "Legal Enforcement Guidance on the Stop Credit Discrimination in Employment Act" (the Guidance).  According to the Guidance, the Act "reflects the City's view that consumer credit history is rarely relevant to employment decisions, and consumer reports should not be requested for individuals seeking most positions in New York City" (emphasis added).  In light of the NYCCHR's narrow view of the exemptions, New York City employers should carefully review their practices to ensure they do not run afoul of the Act. 

What the Act Requires

By way of background, the Act makes it generally unlawful for an employer of four or more employees to request or use an applicant's or employee's "consumer credit history" for employment purposes.  This includes hiring, compensation and other decisions concerning the terms or conditions of employment.  The Act defines "consumer credit history" as "an individual's credit worthiness, credit standing, credit capacity, or payment history, as indicated by: (a) consumer credit report; (b) credit score; or (c) information an employer obtains directly from the individual regarding (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."  The term also includes "any written or other communication of any information by a consumer reporting agency that bears on a consumer's creditworthiness, credit standing, credit capacity or credit history."

The Guidance Confirms the Wide Breadth of the Act

According to the Guidance, impermissible requests for, or use of, an applicant's or employee's "consumer credit history" for employment purposes will be considered unlawful even if they did not lead to an adverse employment action. 

In addition, the Guidance confirms that the limited exemptions in the Act should be construed narrowly and that the employer bears the burden of proving an exemption applies.  Moreover, exemptions will not be applied to "an entire employer or industry.  Exemptions apply to positions or roles, not individual applicants or employees." 

Limited Exemptions

When required by federal or state law or self-regulatory securities organizations

The law allows consideration of one's credit history for employment decisions when required by state law, federal law, regulations, a national securities exchange, registered securities association, registered clearing agency, or other "self-regulatory organization" (as defined in section 3(a)(26) of the Securities Exchange Act of 1934).  The Guidance adds that members of the Financial Industry Regulatory Authority (FINRA) may consider one's credit history when making employment decisions if the individual is required to register with FINRA.  For all other positions, including those requiring the employee to "perform functions that are supportive of, or ancillary or advisory to, 'covered functions' or engage solely in clerical or ministerial activities," the Act's prohibitions will apply.  While the Guidance does not address any specific federal laws requiring consideration of one's credit history for employment purposes, it notes "the only New York law requiring the evaluation of a current or potential employee's consumer credit history applies to licensed mortgage loan originators."

For non-clerical roles with "regular access to trade secrets," intelligence information3 or national security information4 

The new law defines the term "trade secrets" as "information that: (a) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use; (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; and (c) can reasonably be said to be the end product of significant innovation."  In the Guidance, the NYCCHR clarified that "trade secrets" do not include "recipes, formulas, customer lists, processes, and other information regularly collected in the course of business or regularly used by entry-level and non-salaried employees and supervisors or managers of such employees."  It likewise excludes employee handbooks, policies, and other general information that may be proprietary.

In terms of positions with access to "intelligence information," the Guidance states that this exemption shall be "narrowly construed to include those law enforcement roles that must routinely utilize intelligence information."  With respect to "national security information," the Guidance advises that this exemption will apply only to "those government or government contractor roles that require high-level security clearances."  The Guidance states that both exemptions "encompass those few occupations not already subject to exemptions for police and peace officers or where credit checks are required by law."

Jobs entailing signatory authority over third-party funds or assets valued at $10,000 or more, or involve "a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer"

According to the Guidance, this exemption includes only executive-level positions with financial control over a company, including, but not limited to, chief financial officers and chief operations officers.  It does not encompass all of the staff in a finance department.

Jobs in which the regular duties "allow the employee to modify digital security systems established to prevent the unauthorized use of the employer's or client's networks or databases"

According to the Guidance, this exemption applies only to positions at the executive level, such as a chief technology officer or a senior information technology executive who controls access to all parts of a company's computer system.  It "does not include any person who may access a computer system or network available to employees, nor does it include all staff in an information technology department."

Police officers or peace officers, or those in a position with a law enforcement or investigative function at the "department of investigation"

The Guidance explains that only positions for police or peace officers, which are defined by New York law, are exempt, and reinforces the Act's application to civilian positions.

Those subject to background investigation by the "department of investigation for certain public trust positions"

According to the Guidance, for those positions within the City of New York in which the Department of Investigation (DOI) checks the applicant's consumer credit history, the City agency interviewing or hiring the job applicant may not request or use that credit history in making employment decisions unless the position is (1) appointed, and (2) requires a high degree of public trust.     

Those for which the employee must be bonded under city, state or federal law

The Guidance contains no clarification of this exemption.

Those for which federal or state law requires security clearance

According to the Guidance, this exemption applies only when "the review of consumer credit history will be done by the federal or state government as part of evaluating a person for security clearance, and that security clearance is legally required for the person to fulfill the job duties."  "Security clearance" is defined to mean "the ability to access classified information."  It does not include "any other vetting process utilized by a government agency."

Recording-Keeping and Notice Requirements

Although the Act does not contain any notice or record-keeping requirements, the Guidance suggests that employers (i) inform their applicants or employees of the applicable exemption when requesting or using their credit history for employment purposes, and (ii) maintain related records for a period of five years, specifically an "exemption log," which should state the following:

  • The claimed exemption;
  • Why the claimed exemption covers the exempted position;
  • The name and contact information of all applicants or employees considered for the exempt position;
  • The job duties of the exempt position;
  • The qualifications necessary to perform the exempt position;
  • A copy of the applicant's or employee's credit history obtained by the employer;
  • How the credit history information was obtained; and
  • How the credit history led to the employment action.

Next Steps for Employers

In light of the NYCCHR's emphasis on the breadth of the Act's prohibitions, employers in New York City that still use credit information for employment purposes should consult immediately with an experienced employment attorney.  The New York City law is currently the most restrictive law on employers' use of credit information in the nation and its penalties are steep.  Multi-state employers also may want to revisit their practices to help ensure compliance with the varied laws in all 12 jurisdictions that regulate employers' use of information related to one's credit history. 

Employers should also monitor efforts in Congress to regulate the use of credit history information, as well as advisory guidance from, and litigation initiated by, the U.S. Equal Employment Opportunity Commission in this area.5  In addition, employers should evaluate the sufficiency of the paperwork they use with their screening procedures (e.g., consent forms, disclosure forms, and adverse action notices), and otherwise ensure they are following the requirements of the federal Fair Credit Reporting Act and any state and local counterparts.  This includes obtaining advance, written consent for credit checks and providing specific notices before and when an adverse employment decision is based, in whole or in part, on information concerning an individual's credit history.6


1 See  Jennifer L. Mora, David S. Warner and Rod M. Fliegel,  New York City Council Passes the First Citywide Bill Restricting Employers from Using Credit Information in Employment Decisions, Littler Insight (Apr. 21, 2015).

2 See, e.g., Rod Fliegel and Jennifer Mora,  California Joins States Restricting Use of Credit Reports for Employment Purposes, Littler Insight (Oct. 10, 2011); Rod Fliegel, Philip Gordon, and Jennifer Mora,  Colorado is the Latest and Ninth State to Enact Legislation Restricting the Use of Credit Reports for Employment Purposes, Littler Insight (Apr. 26, 2013); Rod Fliegel and William Simmons, Use of Credit Reports by Employers Will Soon Be Restricted in Connecticut, Littler Insight (July 22, 2011); Philip Gordon and Jeffrey Kauffman, New Illinois Law Puts Credit Reports and Credit History Off Limits for Most Employers and Most Positions, Littler Insight (Aug. 24, 2010); Rod Fliegel, Steven Kaplan, and Emily Tyler, Legislation Roundup: Maryland Law Restricts Use of Applicant's or Employee's Credit Report or Credit History, Littler Insight (Apr. 20, 2011); Rod M. Fliegel, Bruce Young and Jennifer L. Mora,  Nevada is the Latest State to Restrict the Use of Credit Reports for Employment Purposes, Littler Insight (May 30, 2013); Howard Rubin and Jennifer Nelson, New Oregon Law Prohibits Credit Checks, Littler Insight (Apr. 2, 2010); Rod Fliegel and Jennifer Mora,  Vermont Becomes the Eighth State to Restrict the Use of Credit Reports for Employment Purposes, Littler Insight (June 18, 2012).

3 "Intelligence information" means "records and data compiled for the purpose of criminal investigation or counterterrorism, including records and data relating to the order or security of a correctional facility, reports of informants, investigators or other persons, or from any type of surveillance associated with an identifiable individual, or investigation or analysis of potential terrorist threats."

4 "National security information" means "any knowledge relating to the national defense or foreign relations of the United States, regardless of its physical form or characteristics, that is owned by, produced by or for, or is under the control of the United States government and is defined as such by the United States government and its agencies and departments."

5 See  Barry A. Hartstein, Rod M. Fliegel, Jennifer Mora and Carly Zuba,  Update on Criminal Background Checks: Impact of EEOC v. Freeman and Ongoing Challenges in a Continuously Changing Legal Environment, Littler Insight (Feb. 23, 2015).

6 See Rod Fliegel, Jennifer Mora and William Simmons,  The Swelling Tide of Fair Credit Reporting Act (FCRA) Class Actions: Practical Risk-Mitigating Measures for Employers, Littler Report (Aug. 1, 2014).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Rod M. Fliegel
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.