What do the New York City Human Rights Law (NYCHRL) and the New York State Human Rights Law (NYSHRL) say about conducting criminal background checks on job applicants? Under the NYSHRL, employers are prohibited from inquiring about any pending convictions and/or arrests from potential employees and job applicants until they have a conditional employment offer. Similarly, under the NYCHRL, employers are prohibited from asking about a job applicant’s convictions that have been sealed, youthful offender adjudications, or arrests that did not result in a conviction or are not currently pending. However, employers are prohibited from using an applicant’s criminal history as a basis for denying employment unless the offenses in question pose an unreasonable risk to persons and/or property or directly relate to the individual’s ability to perform the job they are applying for.
So, what does New York Law say about running credit checks on employees and job applicants?
New York City Law on Running Credit Checks on Job Applicants
Employers in New York must be cognizant of the numerous legal limitations and requirements imposed by New York City’s Stop Credit Discrimination in Employment Act (SCDEA), New York’s Fair Credit Reporting Act, and the Fair Credit Reporting Act (FCRA) on requesting consumer credit history information.
For starters, employers in New York City are generally prohibited from requesting consumer credit history from employees or job applicants. As codified under N.Y.C. Admin. Code § 8-107, subd. 24(a), employers may not, with narrow exceptions, request or use consumer credit information for the purposes of employment pursuant to the SCDEA (the statute through which the NYCHRL was amended). Thus, employers must understand that even if no action is taken based on any consumer credit information provided, it is a violation of the SCDEA to merely ask for such report(s).
Additionally, as codified under N.Y.C Admin. Code § 8-102, the SCDEA is applicable to all employers covered by the NYCHRL since the former is an amendment of the latter. This implies that, including any undocumented workers, unpaid interns, or part-time employees, the SCDEA covers all New York City employers with at least four employees.
However, employers should also be aware that none of the SCDEA’s narrow exemptions applies to an entire industry or employer despite the existence of such provisions. Rather, the exceptions apply with regard to the position or nature of the role of consideration for the prospective employee. For instance, pursuant to N.Y.C Admin. Code § 8-107, subd. 24(b) and as defined in the statute, prospective employees who have regular access to an employer’s trade secrets can be subjected to such credit checks.
Notably, the statute also exempts certain executive-level financial officers, such as chief operations officers or chief financial officers. This goes without saying that employers should take proactive measures to understand the full range of exempted positions, as provided by the New York City Commission of Human Rights.
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Isaac T.,
Legal Writer, Author, & Publisher.