Starting April 18, 2026, New York State will limit employers’ ability to use credit checks in employment decisions, joining a growing number of states and cities that have enacted similar restrictions. Previously, only New York City had prohibited most credit checks for hiring and employment purposes, but the new amendment to the New York State Fair Credit Reporting Act extends these protections statewide. Like other jurisdictions, the law prohibits employers, labor organizations, and employment agencies from requesting or using an applicant’s or employee’s credit history in hiring, compensation, or other employment decisions, with limited exemptions for roles involving public trust, security, or financial responsibilities.

Many states restrict the use of credit checks for employment purposes:

• California
• Colorado
• Connecticut
• Hawaii
• Illinois
• Maryland
• Nevada
• Oregon
• Vermont
• Washington

There are also some counties and cities that also restrict the use of credit checks for employment purposes:

• District of Columbia
• Chicago, IL
• Cook County, IL
• Madison, WI
• New York City
• Philadelphia, PA

New York City has restricted the use of credit checks for employment purposes for some time now, but employers could run the checks in the state outside of New York City. That will no longer be the case starting on April 18, 2026, as the state of New York has now joined other states in placing restrictions on employers using credit checks for employment purposes. As with the other restricted locations, there will be very few exceptions.

Kathy Hochul, Governor of New York, signed S03072 on December 19, 2025, amending the existing New York State Fair Credit Reporting Act. This amendment, just like the other locations with restrictions, also prohibits background checking companies from providing credit checks unless one of the exemptions applies.

This amendment makes it unlawful for an employer, labor organization, employment agency, or its agent to:

• Ask for or obtain consumer credit history for employment purposes; or
• Use such information when making decisions related to hiring, compensation, or any other terms or conditions of employment.

This covers all employment decisions including checks on current employees; it is not just for applicants.

The exemptions for this new law are:

1. The employer is required to obtain or consider credit information under state or federal law, or by a self-regulatory organization as defined in the Securities Exchange Act of 1934.
2. The position is for a peace officer, police officer, or another law-enforcement or investigative role within a governmental agency.
3. The role is an appointed position that must undergo a state-required background investigation and involves a high degree of public trust.
4. The position requires the employee to be bonded under state or federal law.
5. The role requires a federal or state security clearance.
6. The position is non-clerical and involves regular access to trade secrets, intelligence information, or national security information.
7. The individual has signatory authority over $10,000 or more in third-party funds or assets or holds a fiduciary role permitting them to enter financial agreements of $10,000 or more on the employer’s behalf.
8. The role includes regular duties that involve modifying digital security systems that protect the employer’s or its clients’ networks or databases.

If your organization uses credit checks in hiring or employment decisions, ensure you understand the restrictions in affected states and cities and stay up to date on any legal changes.

ASE Connect

ASE Background Checking Services: If you need help with your background screening process or would like a compliance review of your process, please contact Susan Chance.

Sources: Seyfarth.com; JDSupra