New York Becomes 11th State to Ban Most Credit Checks by Employers during Hiring Process
In New York employment law news, Gov. Kathy Hochul signed Senate Bill S3072 into law on December 19, 2025, amending the New York State Fair Credit Reporting Act to prohibit employers from reviewing most candidates’ and employees’ credit history while making hiring or compensation decisions. Modeled on New York City’s “Stop Credit Discrimination in Employment” act, the law brings these noteworthy restrictions to employers in Westchester, Rockland, and the rest of the state.
How the Law Treats Credit Checks and Employment Practices
Under the new law, it is now considered an unlawful discriminatory practice for an employer to request or use consumer credit history when making employment decisions. “Consumer credit history” refers to consumer credit reports, credit scores, or information obtained directly from the individual regarding credit accounts, payment history, charged-off debts, items in collections, credit limits or bankruptcies, judgments, or liens. The law will go into effect on April 18, 2026, giving employers 120 days after its signing to review current hiring practices, retrain staff, and update HR manuals to account for the amendment.
New York employers who staff multi-state teams must maintain anti-discriminatory hiring practices in accordance with the definitions of each state or jurisdiction in which their employees work. New York is now the 11th state to ban consumer credit checks for employment decisions, joining California, Colorado, Hawaii, Illinois, Maryland, Oregon, Vermont, and Washington. Several major cities (including New York City, Philadelphia, Washington D.C., and Chicago) also maintain jurisdictional restrictions to the same end.
Nevertheless, the scope of this amendment is not limited to New York employers. Because the law amends the New York Fair Credit Reporting Act (as opposed to Human Rights Law), any employer who is hiring or employs a resident of New York State must comply.
Exemptions for Positions of Public Trust, Security, or Signatory Power
Limited exemptions exist under this law. Employers may only request or review credit history for positions that require high degrees of public trust (including law enforcement or government roles with state-required background checks); involve security clearance considerations, whether state, federal, or private (like those relating to digital security systems and infrastructure); or if the individual has signatory power over $10,000 or more in third-party or employer funds or assets.
If the employer is required to obtain or consider credit information under state or federal law, or by a self-regulatory organization as defined by the Securities Exchange Act of 1934, then they are also statutorily exempt.
Recommended Actions for Westchester Employers
To prepare for the upcoming April deadline, employers should consider the following actions to bring hiring and employment practices into compliance with the new statute:
- Revise Background Check Forms: Remove credit check authorizations from standard job application packages unless the role meets a specific statutory exception.
- Train HR Personnel: Ensure hiring managers understand that even “informal” credit inquiries during interviews are now prohibited.
- Audit Exempt Positions: Document why specific roles are still subject to credit checks to prepare for potential Department of Labor audits.
These are just a few recommended actions and do not represent the full scope of necessary adjustments. A legal expert is best positioned to advise on how to stay compliant with labor laws in all states. Contact Bleakley Platt & Schmidt’s Employment Discrimination Practice Group to review how this amendment impacts your firm’s hiring and employment practices. As always, the best defense against allegations of employment discrimination is to implement policies that prevent it from occurring.