The law makes it an “unlawful discriminatory practice” for an employer, labor organization, employment agency, or any agent of those entities to request or use the consumer credit history of an applicant or employee for employment purposes. “Employment purposes” covers the full lifecycle of the employment relationship: hiring, termination, promotion, demotion, discipline, compensation, and the terms, conditions, or privileges of employment.

In practical terms, this means that after April 18, 2026, most New York employers cannot pull your credit report as part of a job application, cannot ask you about your credit history during an interview, and cannot use credit information to decide whether to promote, discipline, or fire you.

The law also prohibits consumer reporting agencies from furnishing credit information to employers for employment purposes unless the position falls within one of the law’s narrow exceptions. This means the restriction operates on both sides of the transaction: employers cannot request the information, and consumer reporting agencies cannot provide it.

The law takes effect on April 18, 2026. It applies to employment decisions made on or after that date and covers both job applicants and current employees.

The definition is broad. “Consumer credit history” includes an individual’s creditworthiness, credit standing, credit capacity, or payment history, as indicated by any of the following: a consumer credit report; a credit score; or information an employer obtains directly from the individual regarding details about credit accounts (including the number of accounts, late or missed payments, charged-off debts, items in collections, credit limits, or prior credit report inquiries), bankruptcies, judgments, or liens.

This last category is important. Even if an employer does not pull a formal credit report, it cannot ask you directly about your credit accounts, payment history, bankruptcies, or related financial information and then use that information in making an employment decision. The law covers both formal credit checks and informal inquiries about credit history.

A “consumer credit report” is further defined to include 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.

Yes. The law includes eight categories of positions for which employers may still request and use consumer credit history. These exceptions are narrow and defined by the nature of the position, not the employer’s general preferences:

1. Positions where the use of credit history is required by state or federal law, or by a self-regulatory organization as defined in the Securities Exchange Act of 1934. This primarily covers financial services positions where regulatory requirements mandate credit screening.
2. Peace officers, police officers, or positions with a law enforcement or investigative function in a law enforcement agency.
3. Positions that are subject to a background investigation by a state agency, but only if the position is an appointed position in which a high degree of public trust has been reposed. The mere fact that a position is subject to a state background check does not automatically authorize the use of credit history.
4. Positions in which the employee is required to be bonded under state or federal law.
5. Positions in which the employee is required to possess security clearance under federal or state law.
6. Non-clerical positions with regular access to trade secrets, intelligence information, or national security information. The law defines “trade secrets” narrowly: the information must derive independent economic value from not being generally known, must be subject to reasonable secrecy efforts, and must be the end product of significant innovation. General proprietary company information such as handbooks and policies does not qualify. Client, customer, or mailing lists do not constitute “regular access to trade secrets.”
7. Positions with signatory authority over third-party funds or assets valued at $10,000 or more, or positions involving a fiduciary responsibility to the employer with authority to enter financial agreements valued at $10,000 or more on the employer’s behalf.
8. Positions with regular duties that allow the employee to modify digital security systems established to prevent unauthorized use of the employer’s or client’s networks or databases.

If none of these exceptions applies to your position, your employer cannot request or use your credit history.

No. The fact that a position involves handling money does not, by itself, bring it within any of the exemptions. The relevant exception requires either signatory authority over third-party funds or assets valued at $10,000 or more, or a fiduciary responsibility with authority to enter financial agreements of $10,000 or more on behalf of the employer. The answer depends on the specific authority your position carries, not simply whether you handle money in the course of your work. If you are unsure whether your position falls within one of the law’s exemptions, an attorney experienced in credit reporting and employment law can help you evaluate your situation.

New York City already has its own credit check restriction: the Stop Credit Discrimination in Employment Act, which has been in effect since 2015. The new state law does not override or weaken the city law. The statute explicitly provides that it does not preempt local laws that offer greater protection to employees or job applicants. If you work in New York City, you continue to be protected by whichever law provides stronger protections in any given situation.

Workers in New York City should also be aware of the Fair Chance Act, which separately restricts employer use of criminal history in hiring decisions. The Fair Chance Act is a New York City protection that does not apply statewide.

The primary practical impact of the new state law is for workers and employers outside New York City. Employees in Westchester, Long Island, upstate New York, and the rest of the state will now have protections that were previously available only to workers in the city.

The federal Fair Credit Reporting Act does regulate how employers use credit reports, but it does not prohibit the practice. Under the federal FCRA, an employer must provide a standalone written disclosure to the applicant, obtain written authorization before requesting a consumer report, and follow specific procedures (including providing a copy of the report and a summary of rights) before taking adverse action based on the report’s contents. 

The new New York law goes significantly further. Instead of merely regulating the process, it bans the practice entirely for most positions. Even if an employer provides all the disclosures and obtains written consent required by the federal FCRA, it still cannot use credit history in employment decisions unless one of the narrow state-law exceptions applies.

The two laws operate on different levels: the federal FCRA governs how credit checks for employment are conducted; the new New York law determines whether they can be conducted at all.

The legislation reflects three core concerns that have been building for years.

First, credit reports are frequently inaccurate. The Federal Trade Commission’s congressionally mandated study found that one in five consumers had an error on at least one of their three major credit reports that was corrected after being disputed. The bill’s sponsors cited research indicating that as many as one in four consumers may have a material error in their credit files. When employers rely on credit reports to make hiring decisions, they are basing those decisions on information that may be wrong.

Second, there is very little evidence that credit history predicts job performance. Credit reports were designed to help lenders assess borrowing risk. They measure whether someone has paid bills on time, not whether they will be a competent, reliable, or honest employee. The bill’s sponsors noted in the legislative record that there is “little to no evidence” of any meaningful correlation between credit history and how well someone performs at work. Research cited in support of the legislation also raised concerns that credit checks disproportionately screen out Black and Latino applicants, given documented disparities in average credit scores.

Third, employer credit checks have the potential of creating a vicious cycle. A worker who loses a job may fall behind on bills despite their best intentions. The missed payments damage the worker’s credit. When the worker applies for a new job to get back on their feet and make good on their financial commitments, the damaged credit becomes a barrier to getting hired. The worker is trapped: they cannot fix their credit without income, and they cannot earn income because of their credit. The same dynamic affects people who have experienced financial setbacks from medical emergencies, divorce, or other circumstances beyond their control. The law recognizes that penalizing people for financial hardship by locking them out of employment traps them in the very situation they are trying to escape.

Yes, and identity theft victims have some of the strongest reasons to welcome this law. When someone’s identity is stolen, the thief may open fraudulent accounts, run up debts, and default on obligations, all of which can appear on the victim’s credit report. Even after the victim discovers the fraud and begins the process of disputing the fraudulent information, cleaning up a credit report after identity theft can take months or even years. During that time, the victim’s credit history may show collections, charge-offs, and delinquencies that have nothing to do with the victim’s actual financial behavior.

Under the new law, most employers cannot use that damaged credit history against the victim. This is particularly significant because identity theft victims are already dealing with the financial and emotional consequences of the crime itself. Losing employment opportunities on top of that compounds the harm.

If you are an identity theft victim dealing with credit reporting problems, Schlanger Law Group has extensive experience representing victims in these cases. Our free guide, Fighting Back: A Consumer’s Guide to Identity Theft, explains the steps you can take to protect yourself and repair the damage.

The law provides a private right of action, meaning you can file a lawsuit against an employer that violates its provisions. The remedies depend on whether the violation was willful or negligent.

For willful and knowing violations, under New York General Business Law Section 380-l, a consumer can recover actual damages sustained as a result of the violation, punitive damages in an amount the court considers appropriate, and the costs of the lawsuit together with reasonable attorney’s fees.

For negligent violations, under New York General Business Law Section 380-m, a consumer can recover actual damages and the costs of the action together with reasonable attorney’s fees.

The availability of attorney’s fees is significant because it means that a qualified attorney can take these cases even when the individual consumer’s out-of-pocket damages are modest. The employer, not the employee, bears the cost of the legal fees if the case succeeds. 

Yes. A separate provision of the law prohibits state and municipal agencies from requesting or using consumer credit history information for licensing or permitting purposes. This prohibition has its own limited exceptions: it does not apply to agencies that are required by state or federal law to consider credit history for licensing or permitting, and it does not prevent an agency from considering an applicant’s failure to pay taxes, fines, penalties, or fees for which liability has been established by admission, court judgment, government warrant, or lien.

Schlanger Law Group has represented victims of credit reporting violations since 2007, and FCRA claims are one of our core practice areas. We typically represent victims on a contingency fee basis and handle cases nationwide. If you believe a New York employer has requested or used your credit history in violation of this law, or if you are dealing with credit report errors or identity theft that are affecting your employment prospects, contact us today to discuss your options.