June 20, 2013

Assembly Passes Credit Privacy in Employment Act to Protect Potential Employees and Limit Adverse Employment Action Based on Credit History

Assembly Speaker Sheldon Silver and Chair of the Consumer Affairs and Protections Committee Assemblyman Jeffrey Dinowitz today announced passage of the Credit Privacy in Employment Act. The legislation would prohibit employers from making employment decisions based upon an individual's credit history (A.7056/Dinowitz).

"Research has shown no correlation between credit history and a person's professional performance, and yet many employers unfairly make work-related decisions based on an employee's or job applicant's credit report," Silver said. "This legislation protects New Yorkers seeking employment or advancement in their career by allowing their qualifications and experience to be the deciding factor, not their credit history. Doing so can only have a positive effect on our communities and our state's economy."

"In light of the recent economic downturn, many New Yorkers, through no fault of their own, have less-than-ideal credit histories," Dinowitz said. "Making or breaking a person's career based on their credit history puts them at a distinct disadvantage, particularly when one considers that a person's credit history does not reflect his or her job performance. The Credit Privacy in Employment Act would put an end to this unfair and harmful practice."

The bill would prohibit employers from using information contained in a consumer's credit report when hiring or making employment decisions, such as compensation, promotion, demotion, termination, or taking employee disciplinary actions. It would also prohibit employers from using such information to set the terms, conditions or privileges of employment. However, employers can still use credit history information if required by state or federal law. The legislation also prohibits an employer's refusal to hire a job applicant if he or she does not give consent for the obtainment of his or her credit report. Any person injured by a violation of the Credit Privacy in Employment Act would be able to file a complaint with the state Department of Labor and, if upheld, may be granted an award set by the court as well as reasonable attorney's fees.

"Credit reports don't reveal a person's character or willingness to work hard -- Bernie Madoff probably had a great credit report," Russ Haven, NYPIRG's legislative counsel said. "They can, however, be used as a basis to discriminate against women, young people and minority group members whose credit histories reflect an unfair marketplace. And of course, credit reports are notoriously inaccurate and by the time a mistake is cleared up, a job opportunity may be long gone. Assemblymember Dinowitz and the Speaker deserve kudos for their leadership on this issue. The next step is to persuade the governor and the Senate leadership to follow their lead."

"The use of credit history by employers puts a growing number of New Yorkers in a 'catch-22' where they are unable to secure a job because of damaged credit, and unable to escape debt and improve their credit because they can't find work," Josh Zinner, co-director of New Economy Project (formerly NEDAP) said. "This Credit Privacy in Employment Act would help remove unfair and discriminatory barriers to employment."