Employment Alert: New York State Credit Check Ban – Effective April 18, 2026

Effective April 18, 2026, New York employers are broadly prohibited from requesting or using an applicant’s or employee’s consumer credit history in employment decisions, with limited exceptions.

The law amends the New York Fair Credit Reporting Act (FCRA) and expands restrictions that previously applied primarily in New York City.

---

What Employers Need to Know

• Effective immediately, employers may no longer request or rely on credit history in hiring, promotion, compensation, disciplinary, or termination decisions.
• “Credit history” is broadly defined and includes:
  • Credit reports and scores
  • Payment history, debts, and collections
  • Bankruptcies, liens, and judgments
• Violations of the law may constitute an unlawful discriminatory practice.

Limited Exceptions Apply

The law includes narrow exceptions for certain roles, including positions that:

• Are required by law to undergo credit checks
• Involve law enforcement or public safety
• Require security clearance
• Carry significant financial or fiduciary authority
• Provide access to trade secrets or sensitive financial information

Employers relying on an exception should ensure the role clearly qualifies and the exception is properly documented.

Stein Adler Recommends Employers Act Now to Ensure Compliance

• Eliminate credit checks from standard hiring processes
• Update background check forms and disclosures
• Ensure that HR and hiring managers understand what inquiries are prohibited
• Confirm that background check vendors understand the new law and are not providing non-compliant information
• Clearly document any roles that qualify for an exception

Interplay with Existing Law Including FCRA

Employers must also ensure they are in compliance with applicable local laws including New York City’s credit check restrictions and FCRA. Where multiple laws apply, employers should follow the standard that provides the greatest protection to employees.

STEIN ADLER IS HERE TO HELP

If you have questions about how this law impacts your hiring practices or background check procedures, please contact Jonathan Adler, Casey Hail, or Melanie Sarver.