Effective April 18, 2026, New York employers will largely be prohibited from requesting or using an applicant’s or employee’s consumer credit history when making employment decisions. The new law amends New York’s Fair Credit Reporting Act and extends statewide restrictions that, until now, largely applied only in New York City. Employment credit checks will now be sharply curtailed throughout the State.
Overview of NY FCRA Amendments
The statute makes it an unlawful discriminatory practice for an employer, labor organization, employment agency, or their agent to request or use an individual’s consumer credit history in connection with hiring, compensation, promotion, discipline, or other terms and conditions of employment.
“Consumer credit history” is defined broadly. It includes not only credit reports and credit scores, but also information obtained directly from an individual regarding credit accounts, payment history, bankruptcies, liens, or judgments. As a result, even informal questions about an applicant’s financial difficulties may fall within the scope of the prohibition.
Coverage and Applicability
The law applies to private-sector employers, labor organizations, and employment agencies involved in employment decisions affecting New York applicants or employees. Coverage extends to applicants and current employees, regardless of full-time, part-time, seasonal, or temporary status.
These amendments also affect consumer reporting agencies. Background check providers may not furnish consumer credit history for employment purposes unless an employer certifies that a statutory exemption applies. Employers should expect New York-specific screening packages to change as a result.
Statutory Exceptions to Employment Credit Checks Ban
The statute includes eight narrowly drawn exceptions that largely mirror those already in place under New York City law. Credit history may be requested or used only for positions that fall into one of the following categories:
- Positions where state or federal law, or a self-regulatory organization, requires use of consumer credit history
- Peace officers, police officers, or positions with law enforcement or investigative functions
- Appointed positions subject to background investigation by a state agency involving a high degree of public trust
- Positions requiring bonding under state or federal law
- Positions requiring a security clearance under state or federal law
- Non-clerical positions with regular access to trade secrets, intelligence information, or national security information
- Positions involving signatory authority or fiduciary responsibility over third-party funds or assets of $10,000 or more
- Positions with regular duties allowing modification of digital security systems protecting networks or databases
The statute also includes a limited procedural carve-out allowing employers to request or receive consumer credit history when responding to a lawful subpoena, court order, or law enforcement investigation.
The trade-secrets exception is narrow. “Trade secrets” must derive independent economic value from not being generally known, be subject to reasonable efforts to maintain secrecy, and represent the end product of significant innovation. General proprietary information, such as policies or client lists, does not qualify.
Employers bear the burden of demonstrating that an exemption applies, and state agencies are directed to monitor and report on exemption usage. Overbroad or unsupported reliance on an exemption presents compliance risk.
Relationship to Existing New York City Law
New York City’s Stop Credit Discrimination in Employment Act has restricted most employment credit checks since 2015. The new state law does not preempt local laws that provide greater protections. Employers operating in New York City must continue to comply with the city law and should treat it as the compliance baseline.
The statute also does not displace federal Fair Credit Reporting Act requirements. Employers must ensure that their practices satisfy whichever applicable law provides the greatest protection.
Enforcement and Risk Exposure
The New York Fair Credit Report Act permits private lawsuits by affected applicants and employees. Prevailing plaintiffs can recover actual damages, legal costs, and attorneys’ fees. Punitive damages are also available upon proof of a willful violation.
The statute directs the Division of Human Rights to request information from employers regarding exemption usage, but it does not specify the scope of those requests or expressly require employers to respond. As a result, the provision appears designed to facilitate data collection rather than to impose a new mandatory reporting obligation.
Practical Compliance Guidance
Although the law does not require employers to adopt new policies in any particular form, compliance will require some deliberate housekeeping. Employers should focus less on creating new documentation and more on identifying where credit information may still be entering employment decisions—often by habit, legacy practice, or vendor default. In that context, the following steps are a practical starting point:
- Audit hiring, promotion, and discipline processes to identify where credit information is currently used.
- Eliminate routine credit checks for New York applicants and employees unless a documented exemption applies.
- Identify and document roles that may legitimately qualify for an exemption.
- Update background screening vendor instructions and New York-specific packages.
- Revise job postings, application materials, and offer letters to remove references to credit checks where not permitted.
- Train HR professionals and hiring managers on the new restrictions and narrow scope of exceptions.
- Coordinate multi-state compliance strategies with New York treated as a controlling jurisdiction where applicable.
Effective Date and Timing
The law takes effect on April 18, 2026, which is 120 days after enactment. Employers should begin compliance planning now, particularly given the operational changes required for screening processes and manager training.
Bottom Line for Employers
New York’s statewide employment credit checks ban significantly limits the role of personal financial history in employment decisions. By April 18, 2026, employers must stop requesting or using consumer credit history for New York applicants and employees unless a narrow statutory exception clearly applies. Careful auditing, documentation, and training will be essential to manage compliance risk.
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