Ten states, the city of Chicago, and now, New York City will soon bar most New York City employers from using credit checks and credit history to deny hiring according to an amendment to the city’s human rights law. This new category of employment discrimination may usher in a wave of changes nationwide.
The rationale, according to its supporters, is that applicants’ consumer credit history bears no correlation to their future job performance, and can be used to discriminate. They argue that those most likely to have poor credit are people of color. City Councilman Brad Lander stated, “Credit checks for employment unfairly lock New Yorkers out of jobs for a whole set of unfair reasons: divorce, health care debt, student loans, identity theft, simple errors.” Although Mayor DiBlasio has not signed the law yet, his spokeswoman said, “Credit discrimination is oftentimes an unnecessary obstacle to New Yorkers getting jobs.” In opposition, Councilman Mark Weprin likened the restrictions to those of a “nanny state,” adding that it would be difficult to prove definitively that credit problems were the reason an applicant was rejected.
There are exemptions to the law. Positions excluded are chief financial officer-like jobs with authority over company or third-party funds, or assets worth over $10,000, police officers, elected officials, and others who must report their finances to the Conflicts of Interest Board, as well as those with access to intelligence, national security information, or trade secrets. Additional compromise language was included in an effort to protect the interests of businesses and consumers. New York City’s law is tougher on the financial industries than other similar laws nationwide.
Nonetheless, we can expect similar measures to increasingly pop up across the nation as states and other municipalities attempt to address this growing concern over employment decisions being based on credit history and/or credit problems.
If you have questions or encounter issues or problems with this or any employment-related matter, call the Gilbert Law Group at 631.630.0100.