New York Bans Use of Credit Reports in Employment Decisions

New York recently passed S3072, which bans the use of credit reports in most employment decisions. The law will take effect April 18, 2026.

Applying to both applicants and current employees, S3072 makes it an unlawful discriminatory practice for an employer, employment agency, or agent to request or use an individual’s consumer credit history for any employment purpose. This includes decisions related to hiring, compensation, or the terms related to an employee’s employment.

As is common with credit check bans in other states, S3072 includes several exemptions:

• Employers required by state or federal law, or by a self-regulatory organization, to use credit history for employment purposes;
• Individuals applying for positions or employed as peace officers or police officers;
• Individuals in positions subject to background investigation by a state agency (provided the position is one in which a high degree of public trust is required);
• Positions in which an individual is required to be bonded under state or federal law;
• Positions in which a security clearance under state or federal law is required;
• Individuals in non-clerical positions that have regular access to trade secrets, intelligence information or national security information;
• Individuals in a position that has signatory authority or funds or assets valued at $10,000 or more, or that involves a fiduciary responsibility to the employer with authority to enter into financial agreements valued at $10,000 or more; or
• Individuals in a position with regular duties that allow the employee to modify digital security systems designed to prevent authorized use of employer or client networks/databases.

Employers should review the legislation in full as it also provides definitions for key terms including trade secrets, along with additional scenarios in which credit history may be requested. S3072 also does not preempt or impact local legislation, so employers impacted by New York City’s Stop Credit Discrimination in Employment Act must still comply with that law as well. There do not appear to be any specific consent requirements under this law for employers that will obtain credit history pursuant to an exemption.

Employers are encouraged to review the law with qualified legal counsel to determine what changes, if any, should be made to their background screening criteria and packages.