NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2611E
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 1: Amends section 380-a of the general business law to add a new
definition of consumer credit history.
Section 2: Amends 380-b of the general business law by relettering
subdivision (d) subdivision (g) and adding three new subdivisions (d),
(e), and (1) to state that it shall be an unlawful discriminatory prac-
tice 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. Also
outlines exceptions for certain employers, employees. These provisions
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 therefor, 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 information 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 3: Directs the division of human rights shall request informa-
tion from state and local agencies and nongovernmental employers regard-
ing 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 4: Effective date. This act shall take effect on the one hundred
twentieth day after it shall have become a law.
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 teems, 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/big 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 indicated 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 determine 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:
2017-18: A.5310A- 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.
