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Mayor de Blasio Approves Restrictions on Employer Use of Credit History

By Michael Klazema on 5/20/2015

The ordinance applies to employers with four or more employees in New York City. It includes employers, labor organizations, employment agencies, and agents thereof. It also protects individuals employed as independent contractors that work for an employer’s business enterprise who are not themselves employers.

Employers are restricted from requesting or using information pertaining to an individual’s credit worthiness, credit standing, credit capacity, or payment history, as indicated by a consumer credit report, credit score, or information an employer obtains directly from the individual regarding details about credit accounts or bankruptcies, judgment, or liens. A consumer credit report 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.

Exceptions to the new ordinance are as follows:

  1. An employer or its agent that is otherwise required by law to use an individual’s consumer credit history for employment purposes.
  2. Police or peace officers, or other positions with a law enforcement or investigative function at the department of investigation.
  3. Positions that are subject to background investigations by the department of investigation if the position is an appointed one in which a high degree of public trust has been reposed;
  4. Positions for which the law requires an employee to be bonded;
  5. Positions that require security clearance under federal or any state law;
  6. Non-clerical positions that have regular access to trade secrets, intelligence information, or national security information.
  7. Positions that have a signatory authority over third party funds or assets valued at $10,000 or more, or that 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;
  8. Positions 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; and
  9. Employers when responding to a subpoena, court order, or law enforcement investigation.

You can review backgroundchecks.com's original compliance update on this subject dated April 24, 2015 here: http://www.backgroundbiz.com/compliance/complianceupdate_04232015.html.

You can view New York City’s ordinance 261-A here: http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=1709692&GUID=61CC4810-E9ED-4F16-A765-FD1D190CEE6C&Options=&Search=

What This Means for You:

  • Determine whether you have positions in New York City for which you run credit checks.
  • If so, determine whether one of the exceptions in the law applies to you.
  • If not, contact your account manager to talk about setting up background screening packages without credit checks for New York City positions.

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