April 28, 2026
As part of a growing trend toward fair-chance hiring practices, New York joins several other states enacting a significant update to its employment screening laws. Effective April 18, 2026, employers across the state are now largely prohibited from using consumer credit history in employment decisions.
Applies to Remote Workers, Too
It’s important to note that this law is not limited to employers physically located in New York. The restriction is based on where the employee works.
This means that remote employees who reside and work in New York are covered by the law—even if the employer is headquartered in another state. Employers with distributed or remote workforces should take particular care to ensure their screening practices are compliant for any New York-based employees.
What Changed?
New York amended its state Fair Credit Reporting Act to prohibit employers from requesting or using an applicant’s or employee’s credit history for employment purposes. This includes decisions related to:
- Hiring
- Promotion
- Compensation
- Other terms and conditions of employment
In practical terms, credit reports, credit scores, and other indicators of financial history can no longer be used in most employment decisions statewide.
What Is Considered “Credit History”?
The law defines consumer credit history broadly, including:
- Credit reports and credit scores
- Payment history
- Bankruptcies, liens, or judgments
- Information about credit accounts or collections
This means even information voluntarily provided by a candidate about their financial standing may fall under the restriction.
Are There Any Exceptions?
Yes—while the law is broad, there are several narrowly defined exceptions where credit checks may still be permitted.
These include roles such as:
- Law enforcement or investigative positions
- Jobs requiring security clearance
- Positions with significant financial authority (e.g., handling $10,000+ in assets)
- Roles with access to trade secrets or sensitive information
- Positions where credit checks are required by federal or state law
Employers must be able to clearly justify that an exception applies before requesting credit information.
Why This Matters
New York joins a growing number of jurisdictions limiting the use of credit history in employment decisions, reflecting concerns that credit data is not a reliable predictor of job performance and may disproportionately impact certain populations.
The takeaway: credit checks should now be treated as the exception—not the rule—in New York hiring practices.
Final Thoughts
This law significantly reshapes how employers approach background screening in New York. Organizations should take immediate steps to audit their current practices and ensure compliance—especially if they employ remote workers based in New York.
As always, we recommend consulting with legal counsel for guidance on how this law applies to your specific hiring practices.
If you have questions about how this impacts your screening program, please reach out to our team—we’re here to help you navigate these changes.
You can also reference the SHRM article: https://www.shrm.org/topics-tools/news/new-york-bans-credit-checks-employment-decisions .
Disclaimer: The information provided is for educational purposes only and does not constitute legal advice. Consult your legal counsel for specific compliance questions.