Effective Oct. 31, 2017, it became illegal for public and private employers of any size in New York City to ask about an applicant’s salary history during the hiring process, including in advertisements for positions, on applications, or in interviews. Rather than rely on an applicant’s previous salary, employers and job can now engage in salary negotiations focused on the applicant’s qualifications and requirements for the job to set a salary.

The Stop Credit Discrimination in Employment Act (“SCDEA”) amended the New York City Human Rights Law by making it an unlawful discriminatory practice for employers, labor organizations, and employment agencies to request or use the consumer credit history of an applicant or employee for the purpose of making any employment decisions, including hiring, compensation, and other terms and conditions of employment. The SCDEA also makes it an unlawful discriminatory practice for a City agency to request or use, for licensing or permitting purposes, information contained in the consumer credit history of an applicant, licensee, or permittee.

It is New York City’s position that consumer credit history is rarely relevant to employment decisions, and consumer reports should not be requested for individuals seeking most positions in New York City. In enacting the SCDEA, the City Council intended for it to “be the strongest bill of its type in the country prohibiting discriminatory employment credit checks.”

According to the New York City Commission on Human Rights:

“The SCDEA is intended to stop employers from using consumer credit history when making employment decisions—a practice that has a disproportionately negative effect on unemployed people, low income communities, communities of color, women, domestic violence survivors, families with children, divorced individuals, and those with student loans and/or medical bills. The City Council noted that multiple studies have failed to demonstrate any correlation between individuals’ credit history and their job performance.”

There are positions exempted from the SCDEA’s anti-discrimination positions, such as:

⦁Licensed mortgage loan originators (and other positions required by state or federal law or regulations, or by a self-regulatory organization to use an individual’s consumer credit history for employment purposes);
⦁Police officers, peace officers, or positions with a law enforcement or investigative function at the Department of Investigation;
⦁Positions subjected to a Department of Investigation background investigation;
⦁Positions requiring security clearance under state or federal law;
⦁Non-clerical positions having regular access to trade secrets, intelligence information, or national security information;
⦁Positions requiring bonding under federal, state, or City law or regulation;
⦁Positions involving responsibility for funds or assets worth $10,000 or more; and
⦁Positions involving digital security systems.

The SCDEA is relatively new, and individuals or employers who need legal advice on asserting it, or implementing it, should seek legal advice promptly.

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