New York’s Ban on Credit Checks in Hiring: What Employers Need to Know

On December 19, 2025, New York Governor Kathy Hochul signed into law S03072, amending the New York Fair Credit Reporting Act to prohibit New York employers from obtaining or using an applicant’s or employee’s credit history in hiring and personnel decisions. This legislation, effective April 18, 2026, expands protections that were already in place for employers in New York City and now applies statewide, creating important compliance obligations for all employers operating in New York. 

Understanding the Law 

Under the new law, employers are generally prohibited from requesting, or considering an individual’s credit history when hiring, compensation, or determining other employment terms such as transfers, raises, and determining availability of leave or job assignments. Credit history includes a wide range of financial information, such as credit reports, credit scores, bankruptcies, liens, judgments, and any other account-level financial data obtained from the individual. 

While there are narrow exceptions for certain positions — for example, roles that are legally required to consider credit history, such as positions in law enforcement or investigative fields, jobs requiring bonding or security clearance, or roles that involve significant financial responsibility — the vast majority of employers and positions are covered by this law. This means that using credit history as a screening tool for general hiring decisions is no longer allowed. 

What Employers Must Do 

To comply with the new law, employers should begin by carefully reviewing all current hiring practices. This includes examining job postings, application forms, and interview procedures to ensure that no questions about credit history remain. Even indirect inquiries, such as asking about bankruptcies or personal financial difficulties, can be considered violations if they influence employment decisions. 

Next, employers should update their internal policies and employee manuals to reflect this change. Policies should explicitly state that credit history will not be used in employment decisions except in the limited situations allowed by law. Clear documentation of these policies is essential, not only for internal consistency but also to demonstrate compliance in the event of audits or complaints. 

Training is also critical. Human Resources personnel, hiring managers, and any staff involved in recruitment or promotion decisions should receive guidance on the new law. These individuals should understand what constitutes credit discrimination and how to evaluate candidates without referencing financial history.  

Employers should maintain records of their compliance efforts, including updated policies, training records, and screening procedures. Proper documentation will help demonstrate a good faith effort to follow the law and reduce the risk of enforcement actions or lawsuits. 

Why Compliance Matters 

Failure to comply with the law can expose employers to administrative penalties, legal claims, and reputational harm. More importantly, compliance ensures fairer and more equitable hiring practices. Credit history can disproportionately affect applicants who have experienced financial hardship due to medical expenses, job loss, or other circumstances outside their control. By eliminating credit-based screening, employers open doors to qualified candidates who might otherwise have been unfairly excluded. 

Moving Forward 

Employers should act immediately to assess their hiring processes, remove credit checks where they exist, train staff, and update policies. By taking these steps, employers not only comply with New York law but also demonstrate a commitment to fair and inclusive employment practices. 

If you have any questions regarding this law, contact Rimon Law for assistance. 

This summary is provided for informational purposes only and is not intended to constitute legal advice nor does it create an attorney-client relationship with Rimon, P.C. or its affiliates.