Starting on April 18, 2026, employers in New York State will no longer be allowed to use consumer credit history in most employment decisions. The law was signed by Governor Kathy Hochul in December 2025, and it amends the New York State Fair Credit Reporting Act. An FCRA background check is a screening process used by employers to review an individual’s credit and personal history under the Fair Credit Reporting Act.
The changes prohibit employers from requesting or using an applicant’s or employee’s consumer credit history in employment decisions such as hiring, compensation, promotions, or discipline. It also does not allow an employer to look at someone’s credit history or records of financial obligations. There are few exceptions under this new law including those who work in law enforcement, those who have a security clearance for their job, or an appointed position that requires a background check.
Previously, New York City was the only area in New York State where credit checks for employment decisions were banned when the City passed the Stop Credit Discrimination in Employment Act in September 2015. This new statewide law will help promote fair hiring practices and reduce barriers to employment that are tied to financial hardship. This will also help reduce potential discrimination when it comes to financial history and instead will shift the focus to skill-based or merit-based hiring.
“Employers should not underestimate the scope of this change,” said Amanda L. Smith, Partner at Tully Rinckey PLLC. “What was once a routine part of background checks is now largely off-limits, and missteps could carry legal consequences.”
What:
- New York is now one of 11 states nationwide that prohibit credit checks for employment
decisions. - The law creates a new avenue for employment discrimination claims if credit history is
requested or used improperly. - The law also places the burden on employers to demonstrate that an exception applies
before accessing credit information.
Tully Rinckey PLLC is a multi-state, full-service law firm that bases its commitment to client service on developing an intimate knowledge of each client’s needs and objectives. Headquartered in Latham, New York, Tully Rinckey has over 80 attorneys and offices located across New York State in Manhattan; White Plains; Syracuse; Rochester; Saratoga Springs; and Buffalo; Austin and Houston, Texas; Washington, DC, and Ladera Ranch, California. The Firm handles a wide variety of legal matters including federal and private labor and employment law, military law, security clearance representation, family and matrimonial law, real estate law, regulatory compliance and litigation, corporate law, trusts and estates, and criminal law.