We are continuing to see local and state officials take stronger actions to protect job applicants, making it increasingly difficult for employers to stay current on the ramifications of practices such as using credit histories in decisions. New York Mayor Bill De Blasio’s Stop Credit Discrimination in Employment Act (SCDEA) went into effect in early September, prohibiting employers from using an individual’s consumer credit history when making employment decisions about applicants or current employees.
The New York City Commission on Human Rights (NYCCHR) issued enforcement guidance on the SCDEA that reflects the NYCCHR’s intent to adopt an expansive view of the Act and to construe its exemptions narrowly. Current exemptions in the act are quite restrictive. A few of the limitations include situations when a local, state or federal agency or regulation requires a credit check, when the candidate is applying for a position of public trust or that involves confidential data, networks, databases and other sensitive assets, and when the candidate has signatory authority over third-party funds or assets valued at $10,000 or more. Employers that misuse the exemptions could be penalized with fines of up to $125,000 — up to $250,000 for “willful, wanton or malicious” violations that are–in addition to other legal judgements that might result.
As a result of this guidance, New York City organizations should tread very carefully and give this matter immediate consideration. For employers in other cities around the country, it should remind them that the landscape is always changing, and that changes in recent years have usually not favored the employer.
For more information or to discuss an evaluation of your company’s current screening processes, we invite you to give us a call at (765) 932-5917.