New York State is changing the rules on employment credit checks.
Beginning April 18, 2026, most employers in New York will no longer be permitted to request or use consumer credit history when making hiring, promotion, or employment decisions.
For organizations that rely on background screening as part of their hiring process, this is a significant compliance development.
Here’s what you need to know.
What Is Changing?
New York has amended its Fair Credit Reporting Act (FCRA equivalent) to largely prohibit employers from:
- Requesting a credit report
- Reviewing a credit score
- Considering credit history information
- Using credit-related information to make employment decisions
This applies to decisions involving:
- Hiring
- Promotion
- Compensation
- Discipline
- Termination
In short, credit history can no longer be part of the employment screening process in most cases.
What Counts as “Credit History”?
The law defines consumer credit history broadly. It includes:
- Credit reports from consumer reporting agencies
- Credit scores
- Information about debt, late payments, collections
- Bankruptcies
- Judgments or liens that appear in a credit file
If it comes from a consumer credit report, it’s covered.
Are There Exceptions?
Yes — but they are limited and apply only to specific roles.
While the law broadly restricts the use of consumer credit history for employment purposes, it does include several exemptions where credit checks may still be permitted. These exemptions generally apply to positions involving regulatory requirements, financial authority, or heightened security responsibilities.
Employers may still use credit history when screening candidates for positions such as:
Roles where credit checks are required by state or federal law, or by a self-regulatory organization
Law enforcement or investigative positions, including peace officers or police officers
Positions of high public trust that are subject to a background investigation conducted by a state agency
Roles requiring state or federal security clearance
Positions where the employee must be bonded under state or federal law
Non-clerical roles with regular access to trade secrets, intelligence information, or national security information
Positions with financial authority, including those with signatory authority over third-party funds or assets valued at $10,000 or more, or roles involving fiduciary responsibility with authority to enter financial agreements of $10,000 or more on behalf of the employer
Positions with regular duties that allow modification of digital security systems, such as those that protect company or client networks and databases from unauthorized access
Importantly, these exemptions are narrow and role-specific. In most cases they apply to particular job functions rather than to an entire employer or industry.
For the vast majority of positions, employers should expect that consumer credit history will no longer be permitted as part of the hiring process once the law takes effect.
What About New York City?
New York City has prohibited most employment credit checks since 2015 under the Stop Credit Discrimination in Employment Act.
The 2026 state law expands similar restrictions across the rest of New York State, creating more uniform compliance expectations statewide.
What Employers Should Do Now
Even though the law takes effect in 2026, now is the time to prepare.
1. Audit Your Screening Packages
Review whether credit reports are included in any default background screening packages for New York roles.
2. Evaluate Role Justification
For positions where credit checks are currently used, determine whether a valid exemption applies.
3. Update Policies and Offer Letters
Ensure employment applications and disclosure forms are aligned with the new requirements.
4. Train Hiring Managers
Decision-makers should understand that financial history will no longer be available in most cases.
The Bigger Picture
Across the country, states and municipalities continue to refine what information employers may consider during hiring.
The trend is clear: Compliance complexity is increasing. Screening practices must evolve with it.
Employers who proactively adjust their processes now will reduce risk, avoid disruption, and demonstrate a commitment to fair and compliant hiring.
Need Help Reviewing Your Screening Process?
If you hire in New York, now is a smart time to review your background screening program to ensure alignment with upcoming changes.
We’re here to help you navigate the details and keep your hiring process compliant, efficient, and defensible.
