NY Employers Face New Credit Check Restrictions This April

Starting April 18, 2026, most New York employers won't be able to run credit checks on job applicants or use credit history in employment decisions. This means if you're currently screening candidates' financial backgrounds as part of your hiring process, you need to start planning changes now.

What Changed

New York State amended its Fair Credit Reporting Act to restrict employers from using consumer credit information when making hiring, compensation, or other employment decisions. The law also prohibits employers from requesting credit history or discriminating against workers based on their financial background. This builds on existing New York City protections and ensures consistent standards across the state.

Who This Affects

This applies to most New York State employers, but there are some important exceptions. You can still run credit checks if your business is required by state or federal law to do so, or for certain law enforcement positions and roles requiring bonding or security clearance. If you're in financial services, healthcare, or other highly regulated industries, you may still have legitimate reasons to check credit - but you'll need to document that it's legally required, not just company policy.

What You Need to Do

• Review your current hiring process and identify where credit checks are used - including any background check services that automatically include credit reports
• Update job postings, applications, and hiring documentation to remove credit check requirements unless you qualify for an exemption
• Train your HR team and managers on the new restrictions, especially if they're used to considering financial stability as a hiring factor
• Document any legitimate exemptions you believe apply to specific positions and be prepared to justify them to the state

The NY Angle

New York continues to lead on employment protections, and this credit check restriction adds another layer to your compliance obligations. Just like we've seen with paid family leave and other worker protections, New York is setting standards that often become models for other states. The Division of Human Rights will be monitoring how employers use exemptions and reporting back to the legislature within two years, so expect increased scrutiny of hiring practices. This also means your background screening vendors need to understand New York's specific requirements - what works in other states may not fly here.

Need help navigating this? Benton Oakfield's compliance team works with businesses like yours every day. We can review your current setup and make sure you're covered. Reach out - it's what we do.

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