NY State Senate Bill 2019-S3124

Senate Bill S3124

2019-2020 Legislative Session

Prohibits the disclosure or use of consumer credit history in hiring, employment and licensing determinations

download bill text pdf

Archive: Last Bill Status - Stricken

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Apr 29, 2019	recommit, enacting clause stricken
Feb 04, 2019	referred to consumer protection

2019-S3124 (ACTIVE) - Details

Law Section:: General Business Law
Laws Affected:: Amd §§380-a & 380-b, Gen Bus L
Versions Introduced in Other Legislative Sessions:: 2015-2016: S1545
2017-2018: S5653
2021-2022: S2631
2023-2024: S1731

2019-S3124 (ACTIVE) - Summary

Prohibits the use of consumer credit history in hiring, employment and licensing determinations.

2019-S3124 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S3124

SPONSOR: BIAGGI
 
TITLE OF BILL:

An act to amend the general business law, in relation to prohibiting the
disclosure or use of a person's consumer credit history to an employer,
labor organization, employment agency or agent thereof for purposes of
employment decisions

 
PURPOSE OR GENERAL IDEA OF BILL:

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

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1: Amends section 380-a of the general business law to add a new
definition of consumer credit history.

Section 2: Amends 380-b of the general business law by relettering
subdivision (d) subdivision (f) and adding two new subdivisions (d) and
(e)to state that it shall be an unlawful discriminatory practice for an
employer, labor organization, employment agency or any agent thereof to
request or to use for employment purposes the consumer credit history of
an applicant for employment or employee, or otherwise discriminate
against an applicant or employee with regard to hiring, compensation, or
the terms, conditions or privileges of employment based on the consumer
credit history of the applicant or employee. Also outlines exceptions
for certain employers, employees, and applicants consistent with the
administrative code of the city of New York. These provisions do not
preclude an employer from requesting or receiving consumer credit histo-
ry information pursuant to a lawful subpoena, court order or law
enforcement investigation.

It shall additionally be an unlawful discriminatory practice for any
state or municipal agency to request or use for licensing or permitting
purposes information contained in the consumer credit history of an
applicant, licensee or permittee for licensing or permitting purposes.
This does not apply to an agency required by state or federal law or
regulations to use an individual's consumer credit history for licensing
or permitting purposes. These provisions should not be construed to
affect the ability of an agency to consider an applicant's, licensee's,
registrant's or permittee's failure to pay any tax, fine, penalty or fee
for which liability has been admitted by the person liable therefor, or
for which judgment has been entered by a court or administrative tribu-
nal of competent jurisdiction, or any tax for which a government agency
has issued a warrant, or a lien or levy on property. Further, these
provisions shall preclude a licensing agency from requesting, receiving,
or using consumer credit history information obtained pursuant to a
lawful subpoena, court order or law enforcement investigation.

Section 3: Directs the division of human rights shall request informa-
tion from state and local agencies and nongovernmental employers regard-
ing the agencies' and employers' use of the exemptions established by
subdivision (d) of 380-b of the general business law for purposes of
hiring and employment. Within 2 years of the effective date of this act,
the division of human rights shall submit to the legislature a report
concerning the results of such request and any relevant feedback from
agencies and employers.

Section 4: Effective date. This act shall take effect on the one hundred
twentieth day after it shall have become a law.

 
JUSTIFICATION:

This bill would prohibit an employer or potential employer from using a
job applicant's or employee's consumer credit report in his or her deci-
sion 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 Commis-
sion 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 report-
ing 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 Great
Recession. Many New Yorkers, through no fault of their own, have less
than ideal credit histories that may stem from issues completely unre-
lated 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:

2017-18: A.5310A - Ordered to Third Reading Calendar/S.5653B - Referred
to Consumer Protection
2015-16: A.2372 - Referred to Consumer Affairs and Protection/S.1545A
Referred to Consumer Protection
2013-14: A.7056- Passed Assembly/S.3868-B- Referred to Consumer
Protection

 
FISCAL IMPLICATIONS:

None to the State.

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

2019-S3124 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3124
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             February 4, 2019
                                ___________
 
 Introduced  by  Sen.  BIAGGI -- read twice and ordered printed, and when
   printed to be committed to the Committee on Consumer Protection
 
 AN ACT to amend the general business law, in relation to prohibiting the
   disclosure or use of a person's consumer credit history to an  employ-
   er,  labor  organization,  employment  agency  or  agent  thereof  for
   purposes of employment decisions
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section  380-a  of the general business law is amended by
 adding a new subdivision (u) to read as follows:
   (U) THE TERM "CONSUMER CREDIT HISTORY" MEANS  AN  INDIVIDUAL'S  CREDIT
 WORTHINESS,  CREDIT  STANDING,  CREDIT  CAPACITY  OR PAYMENT HISTORY, AS
 INDICATED BY:
   (1) A CONSUMER CREDIT REPORT;
   (2) CREDIT SCORE; OR
   (3) INFORMATION AN  EMPLOYER  OBTAINS  DIRECTLY  FROM  THE  INDIVIDUAL
 REGARDING  (I) DETAILS ABOUT CREDIT ACCOUNTS, INCLUDING THE INDIVIDUAL'S
 NUMBER OF CREDIT ACCOUNTS, LATE OR MISSED PAYMENTS,  CHARGED-OFF  DEBTS,
 ITEMS  IN COLLECTIONS, CREDIT LIMIT OR PRIOR CREDIT REPORT INQUIRIES, OR
 (II) BANKRUPTCIES, JUDGMENTS OR LIENS.
   A CONSUMER CREDIT REPORT SHALL INCLUDE ANY WRITTEN OR  OTHER  COMMUNI-
 CATION OF ANY INFORMATION BY A CONSUMER REPORTING AGENCY THAT BEARS ON A
 CONSUMER'S  CREDITWORTHINESS, CREDIT STANDING, CREDIT CAPACITY OR CREDIT
 HISTORY.
   § 2. Subdivision (d) of section 380-b of the general business  law  is
 relettered  subdivision  (f)  and  two  new subdivisions (d) and (e) are
 added to read as follows:
   (D) (1) EXCEPT AS PROVIDED IN THIS SUBDIVISION, IT SHALL BE AN  UNLAW-
 FUL DISCRIMINATORY PRACTICE FOR AN EMPLOYER, LABOR ORGANIZATION, EMPLOY-
 MENT  AGENCY  OR ANY AGENT THEREOF TO REQUEST OR TO USE, AND A VIOLATION
 OF THIS ARTICLE FOR ANY PERSON TO DISCLOSE, FOR EMPLOYMENT PURPOSES  THE
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD01243-01-9

 S. 3124                             2
 
 CONSUMER  CREDIT  HISTORY OF AN APPLICANT FOR EMPLOYMENT OR EMPLOYEE, OR
 OTHERWISE DISCRIMINATE AGAINST AN APPLICANT OR EMPLOYEE WITH  REGARD  TO
 HIRING, COMPENSATION,  OR THE TERMS, CONDITIONS OR PRIVILEGES OF EMPLOY-
 MENT BASED ON THE CONSUMER CREDIT HISTORY OF THE APPLICANT OR EMPLOYEE.
   (2) PARAGRAPH ONE OF THIS SUBDIVISION SHALL NOT APPLY TO:
   (I) AN EMPLOYER, OR AGENT THEREOF, THAT IS REQUIRED BY STATE OR FEDER-
 AL LAW OR REGULATIONS OR BY A SELF-REGULATORY ORGANIZATION AS DEFINED IN
 SECTION  3(A)(26)  OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED TO
 USE AN INDIVIDUAL'S CONSUMER CREDIT HISTORY FOR EMPLOYMENT PURPOSES;
   (II) PERSONS APPLYING FOR POSITIONS AS OR EMPLOYED:
   (A) AS PEACE OFFICERS OR POLICE OFFICERS, AS THOSE TERMS  ARE  DEFINED
 IN  SUBDIVISIONS  THIRTY-THREE  AND  THIRTY-FOUR  OF SECTION 1.20 OF THE
 CRIMINAL PROCEDURE LAW, RESPECTIVELY,  OR  IN  A  POSITION  WITH  A  LAW
 ENFORCEMENT OR INVESTIGATIVE FUNCTION IN A LAW ENFORCEMENT AGENCY;
   (B)  IN A POSITION IN WHICH AN EMPLOYEE IS REQUIRED TO BE BONDED UNDER
 LOCAL, STATE OR FEDERAL LAW;
   (C) IN A POSITION IN WHICH AN EMPLOYEE IS REQUIRED TO POSSES  SECURITY
 CLEARANCE UNDER FEDERAL LAW OR THE LAW OF ANY STATE;
   (D) IN A NON-CLERICAL POSITION HAVING REGULAR ACCESS TO TRADE SECRETS,
 INTELLIGENCE INFORMATION OR NATIONAL SECURITY INFORMATION;
   (E)  IN  A  POSITION:  (I)  HAVING  ACCESS TO THIRD PARTY, CONSUMER OR
 EMPLOYER FUNDS OR ASSETS VALUED AT TEN THOUSAND DOLLARS OR MORE; OR (II)
 THAT INVOLVES A  FIDUCIARY  RESPONSIBILITY  TO  THE  EMPLOYER  WITH  THE
 AUTHORITY  TO  ENTER FINANCIAL AGREEMENTS OR INITIATE, MODIFY OR APPROVE
 PAYMENTS, VALUED AT TEN THOUSAND  DOLLARS  OR  MORE  ON  BEHALF  OF  THE
 EMPLOYER; OR
   (F)  IN  A  POSITION  WITH  REGULAR  DUTIES THAT ALLOW THE EMPLOYEE TO
 DESIGN, MONITOR, ACCESS, PROVISION ACCESS  AND/OR  MODIFY  (I)  SYSTEMS,
 APPLICATIONS   OR  DATABASES  CONTAINING  CONFIDENTIAL  EMPLOYER  AND/OR
 CUSTOMER DATA; OR (II) DIGITAL SECURITY SYSTEMS ESTABLISHED  TO  PREVENT
 THE  UNAUTHORIZED  USE  OF  THE EMPLOYER'S OR CLIENT'S NETWORKS OR DATA-
 BASES.
   (3) PARAGRAPH ONE OF THIS SUBDIVISION SHALL NOT BE CONSTRUED TO AFFECT
 THE OBLIGATIONS OF PERSONS REQUIRED BY STATE OR LOCAL  LAW  RELATING  TO
 DISCLOSURES BY PUBLIC EMPLOYEES OF CONFLICTS OF INTEREST.
   (4) AS USED IN THIS SUBDIVISION:
   (I)  THE  TERM  "INTELLIGENCE  INFORMATION"  MEANS  RECORDS  AND  DATA
 COMPILED FOR THE PURPOSE OF CRIMINAL INVESTIGATION OR  COUNTERTERRORISM,
 INCLUDING  RECORDS  AND  DATA  RELATING  TO  THE  ORDER OR SECURITY OF A
 CORRECTIONAL FACILITY, REPORTS OF  INFORMANTS,  INVESTIGATORS  OR  OTHER
 PERSONS,  OR  FROM ANY TYPE OF SURVEILLANCE ASSOCIATED WITH AN IDENTIFI-
 ABLE INDIVIDUAL, OR INVESTIGATION OR  ANALYSIS  OF  POTENTIAL  TERRORIST
 THREATS.
   (II)  THE  TERM  "NATIONAL  SECURITY  INFORMATION" MEANS ANY KNOWLEDGE
 RELATING TO THE NATIONAL DEFENSE OR  FOREIGN  RELATIONS  OF  THE  UNITED
 STATES,  REGARDLESS  OF  ITS  PHYSICAL  FORM OR CHARACTERISTICS, THAT IS
 OWNED BY, PRODUCED BY OR FOR, OR IS UNDER  THE  CONTROL  OF  THE  UNITED
 STATES GOVERNMENT AND IS DEFINED AS SUCH BY THE UNITED STATES GOVERNMENT
 AND ITS AGENCIES AND DEPARTMENTS.
   (III)  THE  TERM  "TRADE  SECRETS" MEANS INFORMATION THAT: (A) DERIVES
 INDEPENDENT ECONOMIC VALUE, ACTUAL OR POTENTIAL, FROM NOT BEING GENERAL-
 LY KNOWN TO, AND NOT BEING READILY  ASCERTAINABLE  BY  PROPER  MEANS  BY
 OTHER  PERSONS WHO CAN OBTAIN ECONOMIC VALUE FROM ITS DISCLOSURE OR USE;
 (B) IS THE SUBJECT OF EFFORTS THAT  ARE  REASONABLE  UNDER  THE  CIRCUM-
 STANCES  TO  MAINTAIN  ITS SECRECY; AND (C) CAN REASONABLY BE SAID TO BE
 THE END PRODUCT OF SIGNIFICANT INNOVATION.

 S. 3124                             3
 
   THE TERM "TRADE SECRETS" DOES NOT INCLUDE GENERAL PROPRIETARY  COMPANY
 INFORMATION  SUCH AS HANDBOOKS AND POLICIES. THE TERM "REGULAR ACCESS TO
 TRADE SECRETS" DOES NOT INCLUDE ACCESS TO OR THE USE OF CLIENT, CUSTOMER
 OR MAILING LISTS.
   (5)  NOTHING  IN  THIS  SUBDIVISION  SHALL  PRECLUDE  AN EMPLOYER FROM
 REQUESTING OR RECEIVING CONSUMER CREDIT HISTORY INFORMATION PURSUANT  TO
 A LAWFUL SUBPOENA, COURT ORDER OR LAW ENFORCEMENT INVESTIGATION.
   (6) PARAGRAPH ONE OF THIS SUBDIVISION SHALL NOT APPLY TO ANY CITY WITH
 A POPULATION OF ONE MILLION OR MORE.
   (E)  (1) EXCEPT AS OTHERWISE PROVIDED IN THIS SUBDIVISION, IT SHALL BE
 AN UNLAWFUL DISCRIMINATORY PRACTICE FOR ANY STATE OR MUNICIPAL AGENCY TO
 REQUEST OR USE, AND A VIOLATION  OF  THIS  ARTICLE  FOR  ANY  PERSON  TO
 DISCLOSE,  FOR LICENSING OR PERMITTING PURPOSES INFORMATION CONTAINED IN
 THE CONSUMER CREDIT HISTORY OF AN APPLICANT, LICENSEE OR  PERMITTEE  FOR
 LICENSING OR PERMITTING PURPOSES.
   (2)  PARAGRAPH  ONE  OF  THIS SUBDIVISION SHALL NOT APPLY TO AN AGENCY
 REQUIRED BY STATE OR FEDERAL LAW OR REGULATIONS TO USE  AN  INDIVIDUAL'S
 CONSUMER CREDIT HISTORY FOR LICENSING OR PERMITTING PURPOSES.
   (3) PARAGRAPH ONE OF THIS SUBDIVISION SHALL NOT BE CONSTRUED TO AFFECT
 THE  ABILITY OF AN AGENCY TO CONSIDER AN APPLICANT'S, LICENSEE'S, REGIS-
 TRANT'S OR PERMITTEE'S FAILURE TO PAY ANY TAX, FINE, PENALTY OR FEE  FOR
 WHICH  LIABILITY HAS BEEN ADMITTED BY THE PERSON LIABLE THEREFOR, OR FOR
 WHICH JUDGMENT HAS BEEN ENTERED BY A COURT OR ADMINISTRATIVE TRIBUNAL OF
 COMPETENT JURISDICTION, OR ANY TAX FOR WHICH  A  GOVERNMENT  AGENCY  HAS
 ISSUED A WARRANT, OR A LIEN OR LEVY ON PROPERTY.
   (4) NOTHING IN THIS SUBDIVISION SHALL PRECLUDE A LICENSING AGENCY FROM
 REQUESTING,  RECEIVING,  OR  USING  CONSUMER  CREDIT HISTORY INFORMATION
 OBTAINED PURSUANT TO A LAWFUL SUBPOENA, COURT ORDER OR  LAW  ENFORCEMENT
 INVESTIGATION.
   (5) PARAGRAPH ONE OF THIS SUBDIVISION SHALL NOT APPLY TO ANY CITY WITH
 A POPULATION OF ONE MILLION OR MORE.
   § 3. The division of human rights shall request information from state
 and  local  agencies  and non-governmental employers regarding the agen-
 cies' and employers' use of the exemptions  established  in  subdivision
 (d) of section 380-b of the general business law as added by section two
 of  this  act for purposes of hiring and employment. Within two years of
 the effective date of this act,  the  division  of  human  rights  shall
 submit  to  the  legislature  a  report  concerning  the results of such
 request and any relevant feedback from agencies and employers.
   § 4. This act shall take effect on the one hundred twentieth day after
 it shall have become a law.

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