What Employers and Employees Need to Know About New York’s New Credit History Law
New York has passed a law that limits when employers may review or use an individual’s credit history when making employment decisions. In most cases, the law prohibits employers from checking credit reports or credit scoreswhen hiring, setting pay, promoting, or making other employment decisions. The law aims to promote fairness in the workplace by preventing the use of financial history as criteria for hiring or promotion. New York now joins other states that have similar protections.
1. When does the law take effect?
The law goes into effect on April 18, 2026, which is 120 days after it was signed by the Governor in December 2025.
2. Who must follow this rule?
Most employers in all of New York State have to follow this rule. It also applies to employment agencies, labor organizations, and any individual or entity acting on behalf of an employer.
3. What counts as “credit history”?
Credit history includes things like:
- Credit report or credit score
- Details on credit accounts, debts, late payments, collections
- Bankruptcies, judgments, liens
The restriction applies regardless of whether the information comes from a credit reporting agency or is provided directly by an applicant or employee.
4. What are employers not allowed to do?
Employers cannot:
- Ask for or get credit reports or credit history for employment reasons
- Use credit history information to make decisions about hiring, pay, promotions, or other terms of employment
This applies to both job applicants and current employees.
5. Are there situations where employers can use credit history?
Yes. There are exceptions, including when a law or regulation already requires credit checks. For example:
- Jobs regulated by laws that require credit checks (i.e. financial industry roles regulated by federal law)
- Peace officers or law enforcement jobs
- Positions with high public trust or security clearance
- Jobs that handle large amounts of money, trade secrets, or sensitive systems
Can credit reporting agencies still share credit information with employers?
No. The law prohibits employers from seeking credit information and prohibits background check and consumer reporting agencies from providing it, except in limited circumstances permitted by law.
6. What does this mean for job applicants and employees?
It means that starting April 18, 2026:
- Employers should not check or review credit history or consider it in employment decisions
- Background check companies and consumer reporting agencies cannot provide credit information to employers unless a specific exception applies
- Credit scores, debt levels, or past financial issues should not affect hiring, pay, promotions, or fair treatment in the workplace unless a specific exception applies
What should employers keep in mind?
Employers will need to:
- Update hiring and HR policies so they don’t request credit history (unless exempt)
- Train HR staff to comply with the new rule
- Review contracts with screening companies to make sure they don’t provide forbidden credit information
Failing to comply could lead to legal trouble under the state’s anti-discrimination rules.
CWI resources are for employers, employees, and jobseekers. They are only provided for general informational purposes and are not a substitute for legal advice.
