Private employers in New York should be aware of a number of employment law changes over the past year that affect background checks (both credit and criminal history), anti-discrimination protections and reasonable accommodations, paid family leave and minimum wage. In addition, there have been recent changes to forms used pursuant to the federal Family and Medical Leave Act, minimum salary levels needed to satisfy the federal "white collar exemptions" from overtime pay and new federal trade secret protections, each of which is applicable to employers with employees in and outside of New York. We summarize these changes briefly below.
Credit Checks Prohibited in Most Circumstances (NYC)
The Stop Credit Discrimination in Employment Act ("SCDEA") amended the New York City Human Rights Law ("NYCHRL") to prohibit most private employers from requesting or considering the "consumer credit history" of job applicants or current employees when making employment decisions. "Consumer credit history" means an individual’s "credit worthiness, credit standing, credit capacity, or payment history" indicated by a consumer credit report, credit score, or certain other credit-related information an employer obtains directly from the individual.
The SCDEA contains specific exceptions, including the following:
- when required by state or federal law or regulations, or by a self-regulatory organization (as defined by the Securities Exchange Act of 1934), e.g., for securities brokers subject to FINRA requirements;
- employment in non-clerical positions with frequent access to trade secrets, intelligence information, or national security information;
- employment involving "signatory authority over third-party funds or assets valued at $10,000 or more," or involving "a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer"; or
- employment in which regular duties involve modifying "digital security systems established to prevent the unauthorized use of the employer's or client's networks or databases."
The exemptions to coverage will be construed narrowly, and employers availing themselves of exemptions should inform applicants or employees of the claimed exemptions and should maintain records of their use of exemptions for five years. The employer should maintain an exemption log that includes the following information.
- why the claimed exemption covers the exempted position;
- the name and contact information of all applicants or employees considered for the exempted position;
- the job duties and qualifications for the exempted position;
- copy of the applicant's or employee's credit history that was obtained pursuant to the claimed exemption; and
- how the credit history was obtained and used for the employment decision.
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Soo Rin Lim, a Summer Associate in our New York office, assisted in the development of this publication.
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