NYCCHR Issues Guidance on Credit Check Law

The New York City Commission on Human Rights (the “Commission”) has just issued guidance in respect of the Stop Credit Discrimination in Employment Act (the “SCDEA”), which goes into effect today and modified the New York City Human Rights Law to place limitations on employers’ ability to conduct credit checks on employees and applicants for employment. See our previous posts on the new law here and here.

Key takeaways from the guidance include the following:

• No exemption applies to an entire employer or industry. Rather, exemptions apply to positions or roles.
• The exemptions will be read narrowly. The Commission indicates in “Frequently Asked Questions” accompanying the guidance that “the exemptions do not include most entry-level, non-salaried employees” and indicates that “bank tellers, cashiers, salespeople, clerical workers, administrative staff, restaurant and bar workers, and private security employees” are not covered by an exemption. In addition:
  • With respect to the exemption for employers who are legally required to consider credit history for employment purposes:
    • FINRA members (and members of other self-regulatory organizations) are exempt only when making employment decisions about “covered persons” and must comply with the law when making decisions regarding positions that are not identified as “covered” under FINRA rules. The guidance defines “covered persons” to include “senior management, supervisors, managers, and others responsible for approving or authorizing work . . . and other people with the authority or discretion to materially commit a FINRA member’s capital [] or bind a FINRA member in contract.”
    • The only New York law requiring evaluation of consumer credit history applies to licensed mortgage loan originators.
    • The claimed exemption;
    • Why the claimed exemption covers the exempted position;
    • The name and contact information of all applicants or employees considered for the exempted position;
    • The job duties of the exempted position;
    • The qualifications necessary to perform the exempted position;
    • A copy of the applicants or employee’s credit history that was obtained pursuant to the claimed exemption;
    • How the credit history was obtained; and
    • How the credit history led to the employment action.

    Evandro Gigante is a partner in the Labor & Employment Law Department and co-head of the Employment Litigation & Arbitration group and the Hiring & Terminations group. He represents and counsels clients through a variety of labor and employment matters, including allegations of…

    Evandro Gigante is a partner in the Labor & Employment Law Department and co-head of the Employment Litigation & Arbitration group and the Hiring & Terminations group. He represents and counsels clients through a variety of labor and employment matters, including allegations of race, gender, national origin, disability and religious discrimination, sexual harassment, wrongful discharge, defamation and breach of contract. Evandro also counsels employers through reductions-in-force and advises clients on restrictive covenant issues, such as confidentiality, non-compete and non-solicit agreements.

    With a focus on discrimination and harassment matters, Evandro has extensive experience representing clients before federal and state courts. He has tried cases in court and before arbitrators and routinely represents clients before administrative agencies such as the Equal Employment Opportunity Commission, as well as state and local human rights commissions.