New York State Restricts Employers’ Use of Credit Reports in Hiring Decisions

Employers in New York state will face new restrictions on using consumer credit history when making employment decisions, effective April 18, 2026. Amendments to the New York State Fair Credit Reporting Act (NY FCRA), signed into law by Governor Kathy Hochul on December 19, 2025, aim to limit employment-related credit checks and align the state with a growing number of jurisdictions protecting applicants and employees from credit discrimination.

What the New Law Does

The amended NY FCRA makes it an unlawful discriminatory practice for employers, labor organizations, and employment agencies to request or use an applicant’s or employee’s consumer credit history for employment purposes, including hiring, compensation, or determining other terms and conditions of employment.

The law defines “consumer credit history” broadly, encompassing not only traditional credit reports and credit scores but also any information related to an individual’s creditworthiness, credit standing, credit capacity, or payment history. This includes details about credit accounts (number of accounts, late payments, debts, credit limits, inquiries), as well as bankruptcy judgments and liens.

Impacted applicants and employees have the right to bring a private cause of action for actual damages and reasonable attorneys’ fees.

Exceptions to the Rule

The law includes specific exceptions for certain positions. These include:

• Some types of law enforcement positions
• Certain appointed positions
• Positions involving security clearance or access to intelligence information
• Certain fiduciaries – specifically, those with authority to make financial agreements of at least $10,000 on behalf of the employer.

These exceptions are defined narrowly and will be evaluated on a case-by-case basis.

Alignment with Existing Laws

This update brings New York state into alignment with New York City, where the Stop Credit Discrimination in Employment Act (SCDEA) has been in effect since September 3, 2015. New York joins California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, Washington, and Washington, D.C., which have similar laws in place.

Impact on Employers Beyond New York

The NY FCRA applies to all New York residents, even those applying for positions in other states. Employers, particularly those in neighboring states or with remote workers in New York, should update their policies and practices to ensure compliance by the enforcement date of April 18, 2026.

Key Takeaways

• Employers in New York state will be restricted from using consumer credit history in employment decisions starting April 18, 2026.
• The law broadly defines “consumer credit history” to include various forms of credit-related information.
• Specific exceptions exist for certain positions, particularly those involving fiduciary responsibility or security clearance.
• The law applies to all New York residents, regardless of where they are applying for work.