What is this about:

New York State recently enacted S.3072/A.1316, a law that broadly prohibits employers, staffing agencies, labor unions, and their agents from requesting or using “consumer credit history” in employment decisions, covering hiring, firing, promotions, compensation, and other terms of employment unless a narrow statutory exemption applies.

Effective date:

Signed by Governor Hochul on December 19, 2025, the law takes effect on April 18, 2026.

What this means:

Employers cannot use credit history for hiring, firing, promotions, or compensation decisions unless an exemption applies, e.g., legal requirement, public trust roles, access to sensitive systems, or authority to bind contracts over $10,000. Except for these exemptions, any such use is classified as an “unlawful discriminatory practice” under General Business Law § 380-b.

The definition of “consumer credit history” in the new state law mirrors the definition in the New York City Stop Credit Discrimination in Employment Act (SCDEA), and means an individual’s credit worthiness, credit standing, credit capacity or payment history, as indicated by: 

  • a consumer credit report;
  • credit score; or
  • information an employer obtains directly from the individual regarding (i) details about credit accounts, including the individual’s number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limit or prior credit report inquiries, or (ii) bankruptcies, judgments or liens.

As in the SCDEA, a “consumer credit report shall include any written or other communication of any information by a consumer reporting agency that bears on a credit capacity or credit history.”

Unlike the SCDEA, the NYS law does not require a written notice to the candidate specifying the exemption under which credit information is obtained. However, employers should maintain internal documentation to justify the exemption.

Why this matters:

This development aligns New York State with similar protections in NYC (since 2015), and places it among eleven states limiting credit checks in employment. Credit histories are frequently inaccurate and disproportionately affect economically vulnerable and minority applicants—this law helps reduce those biases.

 

Disclaimer: This communication is for general informational purposes only and does not constitute legal advice. The summary provided in this alert does not, and cannot, cover in detail what employers need to know about the amendments to the Philadelphia Fair Chance Law or how to incorporate its requirements into their hiring process. No recipient should act or refrain from acting based on any information provided here without advice from a qualified attorney licensed in the applicable jurisdiction.