Employment Tip of the Month – April 2026
Beginning on April 18, 2026, employers in New York, with few limited exceptions, will be barred from obtaining or using an individual's credit score or consumer credit history during or after hiring of an employee. It is an "unlawful discriminatory practice" for an employer or prospective employer to use a candidate or employee credit score for any employment purpose, and it is an unlawful discriminatory practice to even request a credit score from the relevant individuals.
Several relevant exceptions for employers that include:
Persons in a non-clerical position who have regular access to trade secrets, intelligence information, or national security information.
Persons in a position with:
Signatory authority over third-party funds or assets valued at $10,000 or more
Fiduciary responsibility to the employer with authority to enter financial agreements valued at $10,000 or more on behalf of the employer.
The law provides only limited and narrowly defined exceptions for employees who do not fall within the categories above, such as:
An employer that is required under state or federal law, or self-regulatory organization, to use an individual's consumer credit history for employment purposes.
Candidates and current employees serving as peace officers, police officers, and similarly situated positions in law enforcement and investigation.
Persons in an appointed position bearing a high degree of public trust who are subject to background investigations by a state agency.
Persons in a position that requires bonding under state or federal law.
Persons in a position requiring a security clearance under state or federal law.
Persons in a position whose regular duties include modifying digital security systems.
Employment and labor laws are ever evolving and changing, demanding that employers stay on the cutting edge to adapt before running afoul of these amendments. Employers should make concerted efforts to avoid asking credit-related questions in interviews and in office, continue to construe all the above exemptions narrowly, and keep records of exemptions for at least five years.
These new amendments make for an opportune time for employers to take a moment and assess whether they are up-to-date and in compliance with the most recent changes to New York state employment law. Employers that currently use consumer credit history for any employment purposes, whether in hiring or in day-to-day operations, need to make sure that the individual falls under the proper narrowly defined exemption, keep accurate records of the exemption for at least five years to be safe, and assure that any usage of consumer credit history outside of these exemptions has ceased.
This document is designed for general information only. The information presented in this document should not be construed to be formal legal or tax advice nor the formation of a lawyer/client.
For further information please contact me at www.kmckernanlaw.com kevin@kmckernan.com or 718-317-5007.