Fighting Employment Discrimination in New York City

The Stop Credit Discrimination in Employment Act or the SCDEA for short is a New York City law that was passed in 2015. Under the Stop Credit Discrimination in Employment Act, employers who operate within New York City and employ more than four employees are prohibited from using an employee or applicant’s credit history for employment purposes. What’s more, the law also prohibits employers within New York City from discriminating against applicants or employees based on their consumer credit history. Under the Fair Credit Reporting Act or FCRA, employers throughout the country are permitted to make use of the credit history of applicants when making employment decisions, subject to certain procedural requirements. In passing the Stop Credit Discrimination in Employment Act, New York City has joined a number of major cities around the country in banning the use of consumer credit information in relation to employment, with limited exceptions.

What are the exceptions to the Stop Credit Discrimination in Employment Act?

While the Stop Credit Discrimination in Employment Act generally prohibits employers operating with New York City from accessing consumer credit report information for the purposes of making employment decisions, there are some exceptions to the law. Some of these exceptions include the following:

• Non-clerical positions that have access to trade secrets, national security information, or intelligence information.
• Positions in which an employee is required to obtain a security clearance by law.
• Positions in which an employee is required to be bonded by law.
• Positions that have “signatory authority over third-party funds or assets valued at $10,000 or more”, or “that involves a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer”.
• Positions with regular duties that pertain to an employee being allowed to make modifications to “digital security systems established to prevent the unauthorized use of the employer’s or client’s networks or databases”.
• Positions that are offered by employers that are required “by state or federal law or by a self-regulatory organization of the Securities Exchange Act to use an individual’s consumer credit history for employment purposes”.

Moreover, the Stop Credit Discrimination in Employment Act does not exempt all employees operating within New York City who are required to handle money at some point during the course of their employment duties. Furthermore, the Stop Credit Discrimination in Employment Act does not “preclude employers from requesting or receiving consumer credit history information pursuant to a lawful subpoena, court order, or law enforcement investigation”. In order to maintain compliance with the law, employers who operate within New York City are advised to determine whether the positions they offer are exempt from the provisions of the law, as well as take steps to ensure that their hiring practices are fair and equitable should the positions they offer do fall under the jurisdiction of the law.

What are the penalties for violating the Stop Credit Discrimination in Employment Act?

As is the case with any other federal or state statute, businesses and organizations that violate the provisions of the Stop Credit Discrimination in Employment Act are subject to a variety of monetary, legal, and administrative penalties. To this end, the Stop Credit Discrimination in Employment Act is enforced by the New York City Commission on Human Rights. As such, individuals who feel as though their rights have been violated under the law can file a claim with the New York City Commission on Human Rights and are entitled to civil penalties ranging from $125,000 to $250,000, injunctive relief, compensatory and punitive damages, and related attorney fees and costs.

Through the passing of the Stop Credit Discrimination in Employment Act, New York City has grown one step closer to stopping discrimination in employment. While many of the provisions and regulations of the Fair Credit Reporting Act were designed to aid American consumers, the ability for employers to make use of consumer credit information for the purposes of making employment-related decisions set the stage for potential discrimination. While an American consumer’s credit score may have a larger impact on their ability to make financial or housing-based decisions, every American citizen should have the opportunity to seek out stable employment, regardless of their creditworthiness.