A01316 Summary:
BILL NO | A01316 |
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SAME AS | SAME AS S03072 |
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SPONSOR | Dinowitz (MS) |
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COSPNSR | Rosenthal, Weprin, Otis, Seawright, Reyes, Taylor, Sayegh, Epstein, Stirpe, Hyndman, Steck, Cook, Glick, Cruz, Fall, Zinerman, Tapia, Raga, Burdick, Lucas, Hooks |
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MLTSPNSR | Simon |
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Amd §§380-a & 380-b, Gen Bus L | |
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Prohibits the use of consumer credit history in hiring, employment and licensing determinations. |
A01316 Memo:
Go to topNEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)   BILL NUMBER: A1316 SPONSOR: Dinowitz (MS)
  TITLE OF BILL: An act to amend the general business law, in relation to prohibiting the disclosure or use of a person's consumer credit history to an employer, labor organization, employment agency or agent thereof for purposes of employment decisions   PURPOSE OR GENERAL IDEA OF BILL: This bill would prohibit an employer or potential employer from using a job applicant or employee's consumer credit report in his or her deci- sion to hire, terminate, promote, demote, discipline, compensate, or in setting the terms, conditions, or privileges of employment.   SUMMARY OF SPECIFIC PROVISIONS: Section one of the bill adds subdivision (w) to § 380-a of the general business law to add a new definition of consumer credit history. Section two of the bill reletters subdivision (d) to subdivision (g) of § 380-b of the general business law and adds subdivisions (d), (e), and (f) to state that it shall be an unlawful discriminatory practice for an employer, labor organization, employment agency, or any agent thereof to request or to use for employment purposes the consumer credit history of an applicant for employment or employee, or otherwise discriminate against an applicant or employee with regard to hiring, compensation, or the terms, conditions or privileges of employment based on the consumer credit history of the applicant or employee. The section also outlines exceptions for certain employers and employees. These provisions also do not preclude an employer from requesting or receiving consumer credit history information pursuant to a lawful subpoena, court order, or specific law enforcement investigation. It shall additionally be an unlawful discriminatory practice for any state or municipal agency to request or use for licensing or permitting purposes information contained in the consumer credit history of an applicant, licensee, or permittee for licensing or permitting purposes. This does not apply to an agency required by state or federal law to use an individual's consumer credit history for licensing or permitting purposes. These provisions should not be construed to affect the ability of an agency to consider an applicant's, licensee's, registrant's, or permittee's failure to pay any tax, fine, penalty or fee for which liability has been admitted by the person liable thereof, or for which judgment has been entered by a court or administrative tribunal of competent jurisdiction, or any tax for which a government agency has issued a warrant, or a lien or levy on property. Further, these provisions shall preclude a licensing agency from requesting, receiving, or using consumer credit history or using consumer credit history infor- mation obtained pursuant to a lawful subpoena, court order, or law enforcement investigation. Lastly, this section allows for any employer, labor organization, employment agency, or agent thereof subject to the provisions of this section from complying with any local law, ordinance, or regulation with respect to the use of consumer credit history for the employment purposes except to the extent that those laws are inconsistent with any provision of this section, and then only to the extent of such incon- sistency. For purposes of this subdivision, a local law, ordinance, or regulation is not inconsistent with this section if the protection such law or regulation affords an employee or job applicant is greater than the protection provided by this section. Section three of the bill directs the division of human rights to request information from state, local agencies, and nongovernmental employers regarding the agencies' and employers' use of the exemptions established by subdivision (d) of 380-b of the general business law for purposes of hiring and employment. Within two years of the effective date of this act, the division of human rights shall submit to the legislature a report concerning the results of such request and any relevant feedback from agencies and employers. Section four of the bill amends paragraph 3 of subdivision (a) of 380-b of the general business law to add language requiring that a consumer report furnished for employment purposes must exclude information that bears on a consumer's credit worthiness, credit standing, credit capaci- ty, or credit history except where authorized pursuant to paragraph (2) of subdivision (d) of this section. Section five of the bill provides the effective date.   JUSTIFICATION: This bill would prohibit an employer or potential employer from using a job applicant's or employee's consumer credit report in his or her deci- sion to hire, terminate, promote, demote, discipline, compensate, or in setting the terms, conditions, or privileges of employment. There is little to no evidence that shows a correlation between credit history and job performance. Nonetheless, in today's job market, the majority of large employers are now using credit checks as part of their hiring process and in how they treat their existing employees. In addition to lacking any such meaningful correlation, the Federal Trade Commission has released a study indicating that as many as one in four consumers may have a "material error" in their credit reports. At a public hearing on the accuracy and use of consumer credit reports, both the credit reporting industry and numerous consumer advocates testified that millions of Americans have errors in their credit reports that put them in a lower credit risk tier, whether they are aware of any such errors or not. Many New Yorkers, through no fault of their own, have less than ideal credit histories that may stem from issues completely unrelated to their job performance or capabilities. These consumers are disadvantaged because employers are using credit reports to deter- mine if an applicant or employee is worthy of a job or a promotion. This bill would put an end to this practice.   PRIOR LEGISLATIVE HISTORY: 2023-24: A.779-C - Third Reading Calendar / S.1731-D - Passed Senate 2021-22: A.1161-A - Referred to Consumer Affairs and Protection / S.2631-A Referred to Consumer Protection 2019-20: A.2611-E - Passed Assembly / S.2884-E - Third Reading Calendar 2017-18: A.5310-A - Ordered to Third Reading Calendar/S.5653B - Referred to Consumer Protection 2015-16: A.2372 - Referred to Consumer Affairs and Protection/S.1545A Referred to Consumer Protection 2013-14: A.7056- Passed Assembly / S.3868-B- Referred to Consumer Protection   FISCAL IMPLICATIONS: None to the State.   EFFECTIVE DATE: This act shall take effect 120 days after it becomes law.