New York City has enacted the Stop Credit Discrimination in Employment Act, prohibiting most employers in the city from conducting credit checks on employees and candidates, with few exceptions.

The ordinance took effect September 3, and prohibits employers from obtaining a consumer credit report and using it in the hiring process, unless the position falls within specific identified exceptions. Among the exceptions are law enforcement positions, positions which require background checks or security clearances by law, positions involving responsibility for funds or assets worth at least $10,000, and non-clerical positions where the employees have regular access to trade secrets, intelligence information, or national security information.

Employers in New York should review the law before conducting further consumer credit reports on their candidates and employees.  For purposes of the ordinance, a consumer credit report refers to a credit score, credit accounts, and records of bankruptcies, judgments or liens, regardless of the source of the information.

A shout-out to Jeff Brenner of Maragell Corporate Investigations for bringing this new law to our attention.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.