On May 6, 2015, New York City enacted the Stop Credit Discrimination in Employment Act (the “Act”), which amends the New York City Human Rights Law to make it unlawful for employers to consider an individual’s consumer credit history in making employment decisions. Not only does the Act prohibit the consideration of an applicant’s or employee’s credit history, but it also prohibits employers from requesting a credit history.

Despite its broad prohibitions, the Act does contain specific exemptions that permit employers to consider an applicant’s or employee’s credit history in certain situations. For example, the Act does not apply to:

• employees with fiduciary responsibility to their employer and the authority to enter into financial agreements on behalf of the employer for $10,000 or more;
• employees with signatory authority over third-party funds valued at $10,000 or more;
• employees with authority to modify the employer’s digital security systems;
• non-clerical employees who have access to trade secrets, intelligence information, or national security information;
• employees required to possess security clearance under state or federal law;
• employers that are required by state or federal law or regulation, or by a self-regulatory organization to use consumer credit history for employment purposes;
• employees required to be bonded under applicable local, state, or federal law;
• police officers; or
• certain employees within the New York City Department of Investigations.

The enactment of the Act follows a growing trend across the United States to prohibit the use of credit histories in employment decisions. The States of California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington have all passed similar legislation. Employers need to remain mindful of changes in state and local laws in the jurisdictions where their employees work to ensure compliance with applicable laws.