Effective April 18, 2026, New York City’s ban on credit searches in connection with employment decisions will now apply to all employers in New York State, unless one of the narrowly construed exemptions applies. See New York State Senate Bill S3072. In adopting a state-wide ban on credit searches for employment purposes, New York State joins ten other states with similar state-wide bans (California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington). As such, employers in New York must prepare for this change in the legal landscape to avoid potential statutory liabilities.
The Ban:
The New York State ban primarily copy-and-pastes the New York City ban that has been in place since 2015: “[I]t shall be an unlawful discriminatory practice for an employer, labor organization, employment agency, or agent thereof to request or to use for employment purposes the consumer credit history of an applicant for employment or employee, or otherwise discriminate against an applicant or employee with regard to hiring, compensation, or the terms, conditions or privileges of employment based on the consumer credit history of the applicant or employee.” Compare NYC Admin. Code § 8-107(24)(a) with NY Gen. Bus. Law § 380-b(d)(1) (as per upcoming amendment).
Credit Check Vendors:
The above language prohibits not only direct credit checks, but any “use for employment purposes [of] consumer credit history.” Therefore, even use of the results of a credit check run by a third-party vendor is prohibited by the New York City and upcoming New York State ban. The New York State ban will also directly prohibit third party vendors from providing employers credit reports that are subject to the ban. See NY Gen. Bus. Law § 380-b(a)(3)(ii) (as per upcoming amendment).
The Exemptions:
The new law adopts the New York City ban’s exemptions:
- Employers who are required by state or federal law or by a self-regulatory organization to use an employee’s consumer credit history for employment purposes;
- Persons applying for peace or police officer positions or other positions within a law enforcement agency that perform an enforcement or investigative function;
- Persons in a position that is subject to a background investigation by a state agency and where the position is appointed and requires a high degree of public trust;
- Persons in a position in which they are required to be bonded under state or federal law;
- Persons in a position in which they are required to possess a security clearance under state or federal law;
- Persons in a non-clerical position in which they have regular access to trade secrets, intelligence information or national security information (as defined in the amendment);
- Persons in a position in which either (a) they have signatory authority over third-party funds or assets valued at $10,000 or more or (b) they are in a fiduciary relationship with their employer and have authority to enter into financial agreements valued at $10,000 or more; and
- Persons in a position with regular duties that allow them to modify digital security systems.
Compare NYC Admin. Code §§ 8-107(24)(b) with NY Gen. Bus. Law § 380-b(d)(2) (as per upcoming amendment).
Utilizing an exemption:
The new law directs the New York State Division of Human Rights (NYSDHR) to monitor employers’ use of exemptions to the ban and report its findings to the legislature. This includes directly requesting information from employers on their application of the exemption and soliciting feedback. The NYSDHR will then report to the New York State Legislature on the data it collects from employers.
Remedies:
Failure to abide by New York’s now state-wide ban can trigger significant liabilities. The ban makes it an “unlawful discriminatory practice” to request or use an applicant’s or employee’s consumer credit history. In addition, failure to comply with the new ban exposes employers to civil liability for violations, including compensatory damages, attorney’s fees and costs, and, for willful violations, punitive damages. See NY Gen. Bus. Law §§ 380-l, and 380-m.