Enacts the "credit privacy in employment act" to prohibit the use of credit information in hiring and employment determinations

BILL NUMBER:S4905A

Title of bill

An act to amend the general business law and the labor law, in relation to the use of credit history for employment purposes

Purpose

The purpose of this bill is to prohibit an employer or potential employer from using an individual's credit history in his or her decision making process to hire, terminate, promote, demote or discipline an employee or possible employee.

Summary of provisions

This bill would prohibit an employer from using an individual's credit history in decisions related to hiring, terminating, promoting, demoting or disciplinary actions against employees or potential employees. An employer may use such information if required by state or federal law to use such credit history.

The bill would also require employers, when using a consumer report or investigative consumer report containing credit history information and taking an adverse action based in whole, or in part on such report, shall provide to the job applicant or employee: a) the name, address, and telephone number of such consumer reporting agency; b) a description of the consumer's rights under section 380-b of this article; and c) a reasonable opportunity to respond to any information contained in such report.

Justification

The purpose of this bill is to prohibit an employer's access to certain credit history information in connection with employment decisions, so that those persons whose credit history has been negatively affected by the current economic down turn may become more eligible for those jobs that do exist.

There is no evidence showing a correlation between employee credit history and job performance or tendency to commit fraud. In fact, in 2010, Eric Rosenberg, Director of state Government Relations for TransUnion, one of the "big three" nationwide credit reporting agencies, told a panel of Oregon legislators examining this issue that, "At this point we don't have any research to show any statistical correlation between what's in somebody's credit report and their job performance or their likelihood to commit fraud."

With the current bad economic climate, many qualified persons, who through no fault of their own, have low credit scores or less than ideal credit histories, have not been able to find work for months or years at a time. In the employment selection process, those who have been out of work the longest may have more deficient credit histories, hence they are less attractive to employers for those employment opportunities that do exist. These individuals are needlessly being disqualified for jobs that they desperately need and which they are qualified for. However, the consumer credit reports put, in many cases, an

undeserved questionable mark on individuals who otherwise would be qualified for employment.

Legislative history

This is a new bill.

Fiscal implications

None.

Effective date

180th day after it shall have become law.