Navigating New York State's New Ban on Employment Credit Checks

Effective April 18, 2026, New York State restricts employers from requesting or using consumer credit history in employment decisions. This article explains what is prohibited, who is exempt, and how to certify an exemption when ordering through Verified First.

Verified First is not your legal counsel and cannot advise you on your specific compliance obligations. The information in this article is provided as general educational guidance only. Please consult qualified legal counsel.

What Is Prohibited?

Employers cannot:

1. Request or obtain consumer credit history for employment purposes.
2. Use credit history when making decisions regarding hiring, firing, promotion, compensation, or other terms of employment.

Definition of “Consumer Credit History”

The law defines this broadly to include credit worthiness, credit standing, or payment history. This covers:

• Consumer credit reports and credit scores.
• Information obtained directly from the individual regarding account numbers, late payments, charged-off debts, or items in collections.
• Bankruptcies, judgments, or liens.

Exemptions: When Can You Check Credit?

The law provides specific, narrow exemptions. You may still request credit history if the position falls into one of the following categories:

•  Legal Mandate:  Required by state or federal law, or by a self-regulatory organization (e.g., FINRA).
• Law Enforcement:  Police officers, peace officers, or investigative roles in government agencies.
• Security Clearance:  Roles requiring federal or state security clearance.
• Trade Secrets:  Non-clerical roles with regular access to trade secrets, intelligence, or national security information.
• High-Value Financial Authority:  Signatory authority over $10,000 or more in third-party funds/assets, or fiduciary roles with authority to enter financial agreements valued at $10,000 or more.
• Digital Security:  Roles responsible for modifying digital security systems that protect networks or databases.
• Bonding:  Positions required to be bonded under state or federal law.
• Public Trust:  Certain appointed positions involving a high degree of public trust.

Certifying an Exemption When Ordering

When you place an order that includes an Employment Credit Report for a candidate whose residence or employment state is New York, the ordering system will prompt you to certify a statutory exemption before the order can be submitted.

The user will see the following dropdown to select the exemption reason:

New York Exemption for Credit Report — selection prompt

Statutory exemption options available in the dropdown

From this prompt, you will either:

• Select the exemption that applies to the position and check the box certifying that you have reviewed the job duties and confirm the role meets that exemption, or
• Check “No exemptions apply. Remove search from order” to proceed with the rest of the background check without the credit report.

If neither option is completed, the order cannot be submitted with the Employment Credit Report included. This keeps your order moving without delay and creates a record of the certification on file.

How to Apply the Law (Location of the Job)

Scenario A: The NY Job

• Candidate lives outside NY, applying for a job located in NY. 
  • The law applies — the job is physically based in New York.

Scenario B: The Out-of-State Job

• Candidate lives in NY, applying for a job located outside NY. 
  • The law generally does not apply, though remote or hybrid work performed from New York can extend NY law to the position.

Scenario C: The Remote Worker

• Candidate lives in NY and works remotely for an out-of-state employer. 
  • The law likely applies, since the employee's place of work is their New York home office.

Frequently Asked Questions

1. Does this ban apply to current employees or just new hires? 
   1. Both — you cannot use credit history for promotion, retention, or compensation decisions regarding current employees.
2. I operate in New York City. How does this affect me? 
   1. If you are compliant with NYC's Stop Credit Discrimination in Employment Act, you are likely compliant with the new State law, as the exemptions are similar. Confirm your policies align with whichever law provides greater protection to the employee.
3. Does this prohibit criminal background checks? 
   1. No. This legislation only restricts consumer credit history — criminal checks, employment verifications, and education verifications are not affected.
4. Can I ask the candidate about their credit history during the interview if I don't run a formal report? 
   1. No — the law also prohibits requesting this information directly from the individual.
5. What should I do if I believe a role is exempt? 
   1. Document your justification for the exemption in the job description, and select the applicable exemption when prompted at the time of order.

Key Resources

If you have any further questions, or need this product enabled on your account, please contact Verified First Client Services at 844-709-2708 or clientservices@verifiedfirst.com.

This document is provided for general educational purposes only and does not constitute legal advice. Laws and regulations governing background screening and employment vary by jurisdiction and are subject to change. Verified First is a Consumer Reporting Agency under the FCRA. It is not your legal counsel. Please consult qualified legal counsel to ensure your employment screening program is compliant with all applicable federal, state, and local laws.