Senate Bill S5181

                                BILL NUMBER:S5181

TITLE OF BILL:  An act to amend the executive law, in relation to
prohibiting discrimination in hiring based on credit scores

PURPOSE:

This legislation would prohibit the use of a job applicant's personal
credit history as hiring criteria, unless a reasonable nexus exists.

SUMMARY OF PROVISIONS:

Section 1. Section 296 of the executive law is amended by adding a new
subdivision 19-a. This section prohibits the use of credit scores as
hiring criteria for employers, unless this information is directly
related to the occupational position sought by the applicant or
employee. If an employee consents to a credit history background
check, he or she must be given and sign an authorization or consent
form which explicitly states the specific purpose, uses and
limitations of the credit history background information as it
pertains to the employment position sought.

JUSTIFICATION:

During difficult economic times, individuals seeking employment
deserve to be evaluated on their ability to perform the duties of the
              

position for which they apply. In order to narrow applicant pools,
employers are using an applicant's credit score to evaluate their
ability to perform a job, regardless of relevance to the position.

Many applicants, who are otherwise well-qualified for the position
sought and who would make good employees, are rejected due to their
credit score. This legislation would eliminate this bias by
restricting an employer's ability to use credit information, unless
credit history is shown to be directly related to the occupational
position being pursued by the applicant or employee.

While there are certain positions that require credit checks (i.e.
positions that involve access or the direct access of handling money
or negotiable instruments, positions that involve investigating
possible violations of law or state agency rule), employers must be
able to justify their reasons for requiring this information and how
it directly relates to the position. Since many employers require job
applicants to waive their right to privacy, applicants have no other
choice than to submit to a credit history inquiry.

There are many factors that can adversely affect a person's credit
score without their knowledge. For instance, if too many inquiries are
made for an individual's credit report, his credit rating can be
negatively affected. An individual's credit history may also be
lowered if her spouse had a poor credit rating before they were
married or if he had his credit limit reduced due to inactivity.
These adverse actions taken by credit card companies can ultimately
hurt an individual's opportunity to gain employment when companies use
credit histories to screen applicants.

LEGISLATIVE HISTORY:


New bill.

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

This act shall take effect immediately.