Employment Tip of the Month – April 2026

Q: What do employers need to know about the new amendments to the New York Fair Credit Reporting Act?

A: Beginning April 18, 2026, New York employers, with few exceptions, will be prohibited from accessing or using a client’s personal credit score or credit history during or after hiring. In particular, Governor Kathy Hochul has made it an “unlawful practice of discrimination” for an employer or prospective employer to use a candidate’s or employee’s credit score for any employment purpose, and it is an unlawful practice of discrimination to ask for credit scores from affected individuals.

If I am hiring for a job that requires financial trust and ability, are there any exceptions I can use?
Amendments to the New York Fair Credit Reporting Act also include several relevant exceptions for employers including:

• People in non-clerical positions who have regular access to trade secrets,¹ intelligence issues, or national security issues
• People in the position of:
  • (A) Signatory power over third party funds or property valued at $10,000 or more
  • (B) Professional liability for an employer who has the authority to enter into financial transactions valued at $10,000 or more on behalf of the employer.

For employers who wish to continue using credit scores, the law provides only limited and narrowly defined exceptions for employees who do not fall into the above categories, such as:

• An employer required under state or federal law, or a private organization²using the customer’s credit history for employment purposes
• Candidates and current employees who work as peace officers, police, and similar law enforcement and investigative positions.
• People in elected positions with high public trust are subject to background checks by government agencies.
• Individuals in a position that requires no bond under state or federal law
• Individuals in a position requiring security clearance under state or federal law
• People in positions where their normal duties involve modifying digital security systems

How do these restrictions apply to indirect credit checks by credit bureaus? What if the employer voluntarily provides their credit information?
The provisions are clear: employers cannot, except under the exceptions listed above, use an individual’s credit score for any employment purpose. Consumer reporting agencies are not permitted to provide employee reports that contain information related to a consumer’s creditworthiness, credit status, creditworthiness, or credit history. In other words, consumer credit bureaus cannot provide employers with an individual credit report. Additionally, employers are specifically prohibited from using any information obtained directly from an individual regarding their consumer credit history.

How do these amendments relate to the New York City credit check ban?
On September 3, 2015, the Stop Credit Discrimination in Employment Act (SCDEA) went into effect in New York City and largely covers the same topics as the new state law changes. In fact, the SCDEA and the state law amendments are very similar, but the SCDEA may be stricter and narrower than its state law counterpart. For example, SCDEA limits the $10,000 exemption by defining it as limited to senior employees, such as a chief financial officer or chief operating officer. Similarly, the release of digital systems is aimed at managers who control full access to the company’s computer systems. Given that city discrimination protections are often considered broader than state law mirrors, it is not surprising that city law is narrower and more onerous than state law in this area.

How should employers proceed?
Employment and labor laws are constantly changing and changing, requiring employers to stay on top of adapting to these changes. For employers who already operate under SCDEA, these government changes will not change anything. Employers should make every effort to avoid asking credit-related questions in interviews and at the office, continue to narrowly define all of the above exemptions, and keep records of exemptions for at least five years. For employers not covered by the SCDEA that will now be covered by federal amendments, these same steps will be key to ensuring compliance.

These new amendments provide an opportunity for employers to take the time to ensure they are up-to-date and compliant with the latest changes to New York state employment law. Employers who currently use a consumer’s credit history for any employment purpose, whether hiring or in day-to-day operations, need to ensure that the individual falls under the appropriate exemption, maintain accurate records of the exemption for at least five years for safekeeping, and ensure that any use of the consumer’s credit history outside of these regulations is terminated.
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^{1 “Trade secrets” means the following information: (A) that derives independent economic value, actual or potential, from not being generally known, and not easily accessible by appropriate means by other persons who may derive economic value from their disclosure or use; (B) is a matter of reasonable efforts under circumstances to maintain its confidentiality; and (C) can reasonably be said to be the end product of a significant invention. The term “trade secrets” does not include general proprietary company information such as books and policies. The term “regular access to trade secrets” does not include access to or use of customer, customer or mailing lists.}

^{2 FINRA (“Financial Industry Regulatory Authority”) is considered a typical example of an independent agency that may be exempt.}