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Maintaining a healthy credit score is an essential prerequisite for obtaining a home, vehicle or personal loan. However, as New York City lawmakers recently pointed out, the individual credit score of a job applicant generally has little to no bearing on that applicant’s ability to perform well on the job, and an employer’s review of this information could unnecessarily disqualify otherwise-qualified applicants from securing gainful employment.

Accordingly, New York City laws now forbid the consideration of a credit score in the hiring process, and businesses could face significant fines and penalties for unlawfully relying on this information.

The Basics of Credit Check Prohibition

In May 2015, New York City Mayor De Blasio signed into law a prohibition on credit checks for most job seeker, with several exceptions. While the law covers a wide range of jobs and industries, employers may still review the credit histories of any top-level executive seeking any position with an inherent fiduciary component. Moreover, the law does not prohibit a credit review of any potential employee slated to manage assets in excess of $10,000.00.

In addition, other exempt positions include those within law enforcement or national security, positions involving trade secrets, or certain jobs in the information technology industry. As well, the law does not trump any state or federal law mandating credit checks for certain positions.

Penalties for Violators

The penalties for engaging in credit history discrimination are steep, and the law does not contain a grace period to allow businesses to get acclimated to the changes. If a potential employee believes he has been discriminated against based on credit history, the maximum possible fine is $250,000, payable to New York City’s Human Rights Commission.

While many businesses have been made aware of these employment law updates, others are concerned that smaller businesses may need additional time to get up to speed, as they may face fines and penalties for inadvertently violating the law.

Nonetheless, the City Council has ramped up its anti-discrimination efforts by sending undercover staff members to apply for jobs with a seemingly discriminatory hiring process (e.g., restaurants hiring “female only” bartenders). After receiving a 25 percent increase in funding from the City Council, Mayor De Blasio ordered an increase in staffing at the Human Rights Commission, as well as additional training and educational opportunities for businesses.

Employee Rights

In addition to the fines imposed by the Human Rights Commission, an employment lawyer can help victims pursue a lawsuit in state court. The law credit check law gives worker the same rights that they have for other types of employment-related violations (e.g., sexual harassment) of the New York City Human Rights Law. The worker may file a complain with the New York City Commission on Human Rights, or file a lawsuit in State court. As with other claims for violations of the New York City Human Rights law, employees may be entitled to lost wages/pay, job reinstatement, and punitive damages. If there is a violation of the New York City Human Rights Law, the worker is also entitled to have the employer pay for the worker’s attorneys’ fees and court costs.

Call a New York City Employment Lawyer to Discuss Your Case Today!

If you were recently denied employment and believe the motive may have been discriminatory in nature, please do not hesitate to contact Hansen & Associates in New York City today: (212) 697-3701.