New York Is Limiting How Credit History Can Be Used in Hiring

The law takes effect on April 18, 2026, and for many employers, it changes what’s allowed during hiring, onboarding, and ongoing employment decisions.

If credit checks have been part of your process, this is one update worth slowing down for.

What the Law Actually Does

Under the new law, employers are generally prohibited from requesting, using, or relying on an applicant’s or employee’s consumer credit history when making employment decisions.

That includes decisions around hiring, compensation, and the overall terms or privileges of employment.

The intent is broad. It doesn’t just cover formal credit reports or scores. It also applies to information an employer might obtain directly from an individual, including details about credit accounts, payment history, bankruptcies, judgments, or liens.

In short, if the information reflects someone’s creditworthiness or financial standing, it’s largely off the table.

What Counts as “Consumer Credit History”

The law defines consumer credit history expansively.

It includes credit reports and credit scores, but also reaches into less formal territory—anything that signals an individual’s credit capacity or financial track record.

Even casually obtained details about debts or past financial issues fall under the definition.

That breadth matters, because it limits not just what employers can ask for, but what they can act on.

Where the Law Makes Exceptions

The restriction isn’t absolute. There are specific situations where credit history may still be considered, but they are narrowly defined.

These exceptions apply to roles where credit information is legally required, or where the position involves heightened public trust, security, or financial authority.

That includes certain law enforcement and investigative roles, appointed positions subject to state background investigations, jobs requiring bonding or security clearances, and nonclerical positions with access to trade secrets or sensitive intelligence information.

It also covers roles with significant financial responsibility—such as positions with authority over third-party funds or assets valued at $10,000 or more, or the power to enter financial agreements of that size on the employer’s behalf.

One additional carve-out allows employers to receive credit information when responding to a lawful subpoena, court order, or law enforcement investigation.

Outside of these defined scenarios, credit history should not factor into employment decisions.

Why This Feels Familiar to NYC Employers

For employers operating in New York City, much of this may sound recognizable.

The state law closely tracks an existing NYC law that already limits the use of credit history in employment decisions. Many city employers are likely already compliant without needing major changes.

For others across the state, this law effectively extends that same standard statewide.

What Employers Should Be Thinking About Now

With an April 18, 2026 effective date, this is a good moment to step back and review hiring and onboarding practices.

Any forms, background check processes, or informal screening steps that touch on credit history should be carefully examined—especially for roles based in New York or tied to individuals located in the state.

If credit checks are being used, there should be a clear and defensible reason tied to one of the specific exceptions in the law.

For everyone else, the safest move is simple: don’t ask, don’t collect, and don’t rely on credit history when making employment decisions.

Sometimes compliance isn’t about adding new steps.

It’s about knowing which ones to remove.

If you’re unsure how this change impacts your hiring or onboarding processes, Brand's Payroll can help you review your workflows and stay compliant—without adding unnecessary complexity.