Effective April 18, New York workers have new protections against one of the more quietly invasive hiring practices out there.
If you’ve ever felt uneasy knowing a potential employer was digging into your credit history, you’re not alone. Missed payments, old medical debt, a period of unemployment that led to a collections account — these are common financial struggles that have little to do with whether someone can do their job well. Starting this April, New York State agrees.
What the Law Does
A new state law amends New York’s General Business Law to make it an unlawful discriminatory practice for most employers to:
- Request your credit history as part of a job application
- Use your credit history in making decisions about hiring, pay, or working conditions
- Discriminate against you based on your credit standing, credit score, payment history, bankruptcies, judgments, or liens
“Consumer credit history” is defined broadly. It covers not just formal credit reports and scores, but also information an employer might try to gather directly from you — like asking about your number of credit accounts, late payments, charged-off debts, or items in collections.
In short: your financial past is largely off-limits to your employer.
Why This Matters
Research has long shown that using credit history in hiring decisions has a disproportionate impact on communities of color, people who have experienced medical emergencies, and those who went through periods of unemployment or hardship. A bad credit score is often a reflection of life circumstances — not character, reliability, or job performance.
For workers, the practical stakes are real. Before laws like this, someone could lose out on a job — or even be fired — because of a credit card bill that went to collections years ago. That’s a cycle that punishes people for financial hardship by making it even harder to get back on their feet.
This law takes a meaningful step toward breaking that cycle.
Are There Exceptions?
Yes. The law carves out specific categories of positions where an employer may still consider credit history. These include:
- Positions required by state or federal law to use credit history (certain regulated financial roles, for example)
- Police officers and peace officers, or positions with a law enforcement or investigative function
- Positions subject to state agency background investigation, but only for appointed positions where a high degree of public trust has been formally established by rule
- Jobs requiring bonding under state or federal law
- Jobs requiring a federal or state security clearance
- Non-clerical positions with regular access to trade secrets, intelligence information, or national security information (note: access to client or customer lists does not count)
- Positions with signatory authority over $10,000 or more in third-party funds, or fiduciary authority to enter financial agreements of $10,000 or more on behalf of an employer
- Positions with regular access to modify digital security systems protecting employer or client networks or databases
If your job doesn’t fall into one of these specific categories, your employer generally has no business looking at your credit history.
What About Licensing and Permits?
The law also extends protections beyond employment. State and municipal agencies are prohibited from using credit history when making licensing or permitting decisions — unless a specific state or federal law requires it. There is an exception allowing agencies to consider unpaid taxes, fines, penalties, or fees where liability has been admitted or a judgment has been entered.
What Employers Can’t Ask You
Even in casual conversation or on a job application, an employer generally cannot ask you about:
- The number of credit accounts you have
- Whether you’ve had late or missed payments
- Charged-off debts or accounts in collections
- Your credit limit
- Prior credit inquiries
- Bankruptcies, judgments, or liens
If an employer asks you these questions outside of a lawful exception, that may itself be a violation of the law.
Local Protections Still Apply
It’s worth noting that this law sets a floor, not a ceiling. If your city or municipality has a local law that offers greater protections against the use of credit history in hiring, those local protections still apply. (New York City, for example, has had its own credit check restrictions for years.)
What Should You Do If Your Rights Are Violated?
If you believe an employer has unlawfully used your credit history against you in a hiring or employment decision, you may have a legal claim. Document what happened — save application materials, any communications, and any information you were asked to provide. Then speak with an attorney who handles workers’ rights cases.
