Diserio Martin O'Connor & Castiglioni LLP

New York City’s Stop Credit Discrimination in Employment Act

October 19, 2015

On September 3, 2015, the New York City Commission on Human Rights (“Commission”) effectuated the Stop Credit Discrimination in Employment Act (“SCDEA”). The SCDEA amends the New York City Human Rights Law to prohibit employment discrimination on the basis of consumer credit history. More specifically, it is now an unlawful discriminatory practice for employers, labor organizations and employment agencies to request or use the consumer credit history of an applicant or employee for the purpose of making any employment decisions, including hiring, compensation, and other terms and conditions of employment.     


The following acts now constitute separate chargeable violations of the SCDEA:

  1. Requesting consumer credit history from job applicants or potential or current employees, either orally or in writing;

  2. Requesting or obtaining consumer credit history of a job applicant or potential or current employee from a consumer reporting agency; and

  3. Using consumer credit history in an employment decision or when considering an employment action.

All of the above constitute unlawful discriminatory practices even if their use does not lead to an adverse employment action.  While the question of whether or not an adverse employment action has occurred as a result of reviewing one’s credit history can be considered by the Commission when determining damages or penalties, it is not relevant to finding liability under the SCDEA. If an employer is found to have violated the law, it can face up to $125,000 in civil penalties and up to $250,000 for violations that are the result of willful, wanton or malicious conduct on its part.


Employers with four or more employees (including owners) must comply with this new law. The employees need not all work in the same location or, instead, in New York City. Furthermore, the law protects not only regular, full-time employees, but also part-time workers, undocumented workers, interns, many independent contractors, and probationary workers.   

It is an employer’s burden to show that a position falls within one of the law’s exemptions. If an employer believes a certain position is exempted, that fact should be well documented by the employer with reference to the job description for that position. Also, exemptions apply to specific positions or roles, not individual applicants or employees. No exemption applies to an entire employer or industry. The following positions are exempted from the SCDEA:

  1. Members of the Financial Industry Regulatory Authority (“FINRA”) who make employment decisions about people who are required to register with FINRA.

  2. Police officers, peace officers, or positions with a law enforcement or investigative function at the NYC Department of Investigation (“DOI”).

  3. Positions with the City of New York that are subject to a DOI background investigation. Such positions must be appointed and require a high degree of public trust (e.g., Commissioner titles, Counsel titles, Chief Information Officer and Chief Technology Officer titles, and any position reporting directly to an agency head).

  4. Positions legally requiring bonding under federal, state, or City law or regulation.

  5. Positions legally requiring security clearance under federal or state law.

  6. Non-clerical positions having regular access to trade secrets, intelligence information, or national security information.

  7. Executive-level positions involving financial control over a company and responsibility for funds or assets worth $10,000 or more (e.g., Chief Financial Officers and Chief Operations Officers). 

  8. Executive-level positions involving digital security systems and control over access to all parts of a company’s computer system (e.g., Chief Technology Officers).


Employers should carefully review all forms used in their hiring and reassignment processes to ensure that they do not require individuals to consent to a credit check or disclose information about their consumer credit history for all positions that do not fall clearly within the scope of one of the SCDEA’s exemptions.  For those that the employer maintains are covered by an exemption, the reasons for that conclusion should be documented.  In this way, the employer will be prepared to respond in the face of an employee complaint or Commission investigation.

While no such prohibition yet applies to employers outside New York City or Connecticut employers, employers generally would be wise to narrowly apply their use of employee or applicant credit histories in making employment decisions only to positions where credit history would have some logical relevance to one’s qualifications to perform the job, as for example, jobs relating to company financial matters, security or trade secrets.      ­­­­­­­­­­­­­­

Attorneys in our Employment Law Group can assist employers in complying with this new law.

For more information, please contact Scott S. Centrella, Chair of DMOC’s Employment Law Group, at 203-358-0800 or SCentrella@dmoc.com.