Robinson Brog Leinwand Greene Genovese & Gluck, P.C. - New York City Business Litigation Attorneys


Employment-Related Background Checks - Is Your Company in Compliance?

by Felicia Ennis

As we detailed in an earlier post, a new law known as the Stop Credit Discrimination in Employment Act (“SCDEA”), became effective on September 3, 2015, prohibiting most New York City employers from inquiring into or considering a prospective or current employee’s credit history when making employment decisions.  Employers with four or more employees cannot inquire about payment history or credit worthiness, credit standing, or credit capacity. That includes credit card debt, child support, student loans, a foreclosure, missed or late payments, bankruptcies, judgments, and liens. Although the law contains a number of exemptions, it is considered one of the most restrictive laws to date prohibiting an employer’s use of credit checks to make employment decisions.   

On October 27, 2015, a new law restricting employment-related criminal background checks will become effective in New York City.  The new law, called the Fair Chance Act, prohibits most employers from inquiring into or considering a prospective employee’s pending arrest or criminal conviction history until after a conditional offer of employment has been extended and requires employers to provide a written copy of the inquiry, analysis, and supporting documentation to applicants.  If an employer denies someone a job based on his or her criminal record, the employer must do so in writing and connect the criminal record history to job duties or show it creates an unreasonable risk.  The employer must also hold the job open for 3 business days to allow the individual an opportunity to respond to any incorrect information contained in the report.  Additionally, employers who conduct background checks through consumer reporting agencies must ensure compliance with the Fair Credit Reporting Act (“FCRA”).

The Fair Chance Act includes exemptions for public and private employers who are required by law to conduct criminal background checks, and for several City agencies including the Police Department, Fire Department, Department of Correction, and Department of Probation.  

Private Right of Action for Employees

With regard to enforcement, both the SCDEA and the Fair Chance Act permit employees to pursue a private right of action and seek the same broad remedies as any other claims asserted under the NYC Human Rights Law.


Employers in New York City that use background reports or related information should evaluate and reassess their practices and procedures to ensure compliance with these initiatives.