New York Restricts Use of Credit Checks in Employment - HR ALERTS

New York Restricts Use of Credit Checks in Employment

Effective: April 18, 2026

New York has amended its Fair Credit Reporting Act to significantly limit the use of credit history in employment decisions.

Beginning April 18, 2026, employers are generally prohibited from requesting or using an applicant’s or employee’s consumer credit history, except in limited circumstances.

What This Means

• Employers may not use credit history when making hiring, promotion, or other employment decisions

• “Consumer credit history” includes credit reports, credit scores, and related financial information

• Use of this information is only permitted if a specific exception applies

Exceptions

• The law includes a limited number of exceptions for certain roles or circumstances

• Employers should consult legal guidance before relying on any exception

Additional Considerations

• Local laws may impose stricter requirements

• New York City’s existing restrictions remain in effect and are not changed by this update

Why It Matters

This law expands employee protections and limits a common pre-employment screening practice. Employers should carefully evaluate whether credit checks are being used and if they are still permissible.

What Employers Should Do

• Review hiring and background check practices

• Remove credit check requirements unless a clear exception applies

• Update policies and procedures to reflect the new restrictions

• Train hiring managers and recruiters on compliance requirements

Reference: The New York Fair Credit Reporting Act 

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