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

Summary of specific provisions

Section 1: Enacts the "credit privacy in employment act".

Section 2: Amends General Business Law section 380-b (a)(3)to include section 380-u as part of the terms in using a person's consumer credit report for employment decisions.

Section 3: Amends General. Business Law section 380-m to add a reference to General Business Law section 380-u.

Section 4: Re-letters the existing General Business Law section 380-u to become a new section 380-u. Further, it adds a new section 380-u that prohibits an employer or potential employer from using any job applicant or employee's consumer credit report in his or her decision to hire, terminate, promote, demote, discipline, compensate, or in setting the terms, conditions, or privileges of employment. The new section also prohibits an employer or potential employer from requesting a. job applicant or employee's consumer credit report for the above mentioned purposes, as well as prohibiting them from refusing to hire a job applicant on the grounds that he or she refuses to give consent for the obtainment of his or her credit report.

Further, this bill section provides for enforcement authority under this section for the Attorney General as well as allowing for any person injured by a violation of this section to bring an action in his or her own name and sets a limit on awards courts may grant as well as attorney's fees. Also the section allows for a consumer to file a complaint with the Department of Labor pursuant to section 219-d of the labor law.

Section 5: Amends General Business Law section 380-i by adding a new subdivision (d) that would require that in using a consumer credit report any employer, employment agency, licensing agency, agent, representative or designee thereof; to provide to a job applicant or employee prior to taking any adverse action base in whole or part on such report, the name, address, and telephone number of the consumer reporting agency providing the report; a description of the consumer's rights under section 3130-b of this article; and a reasonable opportunity to respond to any information in the report.

Section 6: Adds a new Labor Law section 219-d which allows for any job applicant or employee to file a complaint with the Commissioner of the Department of Labor regarding an alleged violation of section 380-u

under the general business law for an investigation of such a complain and statement setting the appropriate remedy if any.

Section 7: Effective date.

Justification

This bill would prohibit an employer or potential employer from using any job applicant's or employee's consumer credit report in his or her decision to hire, terminate, promote, demote, discipline, compensate, or in setting the terms, conditions, or privileges of employment.

There is little evidence that shows a correlation between credit history and job performance. Nonetheless, in today's job market, the majority of large/big employers are now using credit checks as part of their hiring process and in how they treat their existing employees. In addition to lacking any such meaningful correlation, a recent Federal Trade Commission study indicated that as many as one in four consumers may have a "material error" in their credit reports. At a recent public hearing on the accuracy and use of consumer credit reports, both the credit reporting industry and numerous consumer advocates testified that millions of Americans have errors in their credit reports that put them in a lower credit risk tier, whether they are aware of any such errors or not.

The United States, as a whole, is still feeling the sting of the recent Great Recession. Many New Yorkers, through no fault of their own, have less than ideal credit histories that may stem from issues completely unrelated to their job performance or capabilities. These consumers are disadvantaged because employers are using credit reports to determine if an applicant or employee is worthy of a job or a promotion. This bill would put an end to this practice.

Prior legislative history

Similar to S. 4905 of the 2011/2012 legislative session.

Fiscal implications

None to the State.

Effective date

This act shall take effect 120 days after it becomes law.