NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8070B
SPONSOR: Stevenson (MS) TITLE OF BILL: An act to amend the general business law and the labor
law, in relation to the use of credit history for employment purposes
PURPOSE: The purpose of this bill is to prohibit an employer or
potential employer from using an individual's credit history in his or
her decision making process to hire, terminate, promote, demote or
discipline an employee or possible employee.
SUMMARY OF PROVISIONS: This bill would prohibit an employer from
using an individual's credit history in decisions related to hiring,
terminating, promoting, demoting or disciplinary actions against employ-
ees or potential employees. An employer may use such information if
required by state or federal law to use such credit history.
The bill would also require employers, when using a consumer report or
investigative consumer report containing credit history information and
taking an adverse action based in whole, or in part on such report,
shall provide to the job applicant or employee: a) the name, address,
and telephone number of such consumer reporting agency; b) a description
of the consumer's rights under section 380-b of this article; and c) a
reasonable opportunity to respond to any information contained in such
report.
JUSTIFICATION: The purpose of this bill is to prohibit an employer's
access to certain credit history information in connection with employ-
ment decisions, so that those persons whose credit history has been
negatively affected by the current economic down turn may become more
eligible for those jobs that do exist.
There is no evidence showing a correlation between employee credit
history and job performance or tendency to commit fraud. In fact, in
2010, Eric Rosenberg, Director of State Government Relations for Tran-
sUnion, one of the "big three" nationwide credit reporting Agencies,
told a panel of Oregon legislators examining this issue that, "At this
point we don't have any research to show any statistical correlation
between what's in somebody's credit report and their job performance or
their likelihood to commit fraud."
With the current bad economic climate, many qualified persons, who
through no fault of their own, have low credit scores or less than ideal
credit histories, have not been able to find work for months or years at
a time. In the employment selection process, those who have been out of
Work the longest may have more deficient credit histories, hence they
are less attractive to employers for those employment opportunities that
do exist. These individuals are needlessly being disqualified for jobs
that they desperately need and which they are qualified for. However,
the consumer credit reports put, in many cases, an undeserved question-
able mark on individuals who otherwise would be qualified for employ-
ment.
LEGISLATIVE HISTORY: This is a new bill.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: 180th day after, it shall have become law.
STATE OF NEW YORK
________________________________________________________________________
8070--B
2011-2012 Regular Sessions
IN ASSEMBLY
May 27, 2011
___________
Introduced by M. of A. STEVENSON, DINOWITZ, COLTON, JAFFEE, M. MILLER,
P. RIVERA, CRESPO -- Multi-Sponsored by -- M. of A. CERETTO, CROUCH,
GIBSON, HIKIND, MILLMAN, WRIGHT -- read once and referred to the
Committee on Consumer Affairs and Protection -- recommitted to the
Committee on Consumer Affairs and Protection in accordance with Assem-
bly Rule 3, sec. 2 -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee -- reported and
referred to the Committee on Codes -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
AN ACT to amend the general business law and the labor law, in relation
to the use of credit history for employment purposes
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "credit privacy in employment act".
3 § 2. Paragraph 3 of subdivision (a) of section 380-b of the general
4 business law, as amended by chapter 797 of the laws of 1984, is amended
5 to read as follows:
6 (3) To a person whom it has reason to believe intends to use the
7 information (i) in connection with a credit transaction involving the
8 consumer on whom the information is to be furnished and involving the
9 extension of credit to, or review or collection of an account of, the
10 consumer, or (ii) for employment purposes, subject to the provisions of
11 section three hundred eighty-u of this article or (iii) in connection
12 with the underwriting of insurance involving the consumer, or (iv) in
13 connection with a determination of the consumer's eligibility for a
14 license or other benefit granted by a governmental instrumentality
15 required by law to consider an applicant's financial responsibility or
16 status, or (v) to a person in connection with a business transaction
17 involving the consumer where the user has a legitimate business need for
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11204-04-2
A. 8070--B 2
1 such information, or (vi) in connection with the rental or lease of a
2 residence.
3 § 3. Section 380-m of the general business law, as amended by chapter
4 279 of the laws of 2008, is amended to read as follows:
5 § 380-m. Civil liability for negligent noncompliance. Any consumer
6 reporting agency or user of information who or which is negligent in
7 failing to comply with any requirement imposed under this article, other
8 than a violation of section three hundred eighty-t or three hundred
9 eighty-u of this article, with respect to any consumer is liable to that
10 consumer in an amount equal to the sum of:
11 (a) Any actual damages sustained by the consumer as a result of the
12 failure;
13 (b) In the case of any successful action to enforce any liability
14 under this section, the costs of the action together with reasonable
15 attorney's fees as determined by the court.
16 § 4. Section 380-u of the general business law, as relettered by chap-
17 ter 63 of the laws of 2006, is renumbered section 380-v and a new
18 section 380-u is added to read as follows:
19 § 380-u. Use of credit history for employment purposes. (a) No
20 employer, employment agency, or licensing agency, or agent, represen-
21 tative or designee thereof, shall:
22 (1) use information in the credit history of a job applicant or
23 employee in connection with or as a criterion for employment decisions
24 related to hiring, termination, promotion, demotion, discipline, compen-
25 sation, or the terms, conditions or privileges of employment; or
26 (2) request the job applicant's or employee's credit history for such
27 purpose.
28 (b) The provisions of subdivision (a) of this section shall not apply
29 to the employers of law enforcement officers or if the employer is
30 required by state or federal law to use individual credit history for
31 employment purposes.
32 (c) As used in this section, "credit history" means any written or
33 other communication of any information by a consumer reporting agency
34 that bears on a consumer's credit worthiness, credit standing or credit
35 capacity.
36 (d) (1) Wherever there shall be a violation of this section, an appli-
37 cation may be made by the attorney general in the name of the people of
38 the state of New York to a court or justice having jurisdiction by a
39 special proceeding to issue an injunction, and upon notice to the
40 defendant of not less than five days, to enjoin or restrain the contin-
41 uance of such violation; and if it shall appear to the satisfaction of
42 the court or justice that the defendant has, in fact, violated this
43 section, an injunction may be issued by such court or justice, enjoining
44 and restraining any further violation, without requiring proof that any
45 person has, in fact, been injured or damaged thereby. In any such
46 proceeding, the court may make allowances to the attorney general as
47 provided in paragraph six of subdivision (a) of section eighty-three
48 hundred three of the civil practice law and rules, and direct restitu-
49 tion. Whenever the court shall determine that a violation of this
50 section has occurred, the court may impose a civil penalty of not more
51 than two thousand dollars for each violation. In connection with any
52 such proposed application, the attorney general is authorized to take
53 proof and make a determination of the relevant facts and to issue
54 subpoenas in accordance with the civil practice law and rules.
55 (2) Any person injured by a violation of this section may bring an
56 action in his or her own name to enjoin such unlawful act or practice,
A. 8070--B 3
1 an action to recover his or her actual damages or three thousand five
2 hundred dollars, whichever is greater, or both such actions. The court
3 may, in its discretion, increase the award of damages to an amount not
4 to exceed three times the actual damages up to ten thousand dollars, if
5 the court finds the defendant willfully or knowingly violated this arti-
6 cle. In the case of any successful action to enforce the foregoing
7 liability, the court may award the costs of the action together with
8 reasonable attorney's fees.
9 (e) a consumer may file a complaint alleging a violation of the
10 provisions of this subdivision with the department of labor pursuant to
11 section two hundred nineteen-d of the labor law.
12 § 5. Subdivision (d) of section 380-c of the general business law, as
13 added by chapter 867 of the laws of 1977, is amended to read as follows:
14 (d) If a person applying for credit, insurance, or employment refuses
15 to authorize the procurement or preparation of an investigative consumer
16 report, the prospective creditor, insurer or employer may decline to
17 grant credit, insurance or employment on the grounds that the applicant
18 refused to execute such authorization; provided, however, that an
19 employer shall not refuse to hire a prospective employee on the grounds
20 that the prospective employee refuses to authorize the procurement of
21 information to which the employer is not entitled pursuant to section
22 three hundred eighty-u of this article.
23 § 6. Section 380-i of the general business law is amended by adding a
24 new subdivision (d) to read as follows:
25 (d) In using a consumer report or investigative consumer report, where
26 the report contains information bearing on the consumer's creditworthi-
27 ness, credit standing or credit capacity, an employer, or agent, repre-
28 sentative or designee thereof before taking any adverse action based in
29 whole or part on the report, shall provide to the job applicant or
30 employee:
31 (1) the name, address, and telephone number of the consumer reporting
32 agency providing the report;
33 (2) a description of the consumer's rights under section three hundred
34 eighty-b of this article; and
35 (3) a reasonable opportunity to respond to any information in the
36 report that is disputed by the consumer.
37 § 7. The labor law is amended by adding a new section 219-d to read as
38 follows:
39 § 219-d. Filing of complaint. Any employee or prospective employee
40 may file with the commissioner a complaint regarding an alleged
41 violation of section three hundred eighty-u of the general business law
42 for an investigation of such complaint and statement setting the appro-
43 priate remedy, if any.
44 § 8. This act shall take effect on the one hundred eightieth day after
45 it shall have become a law.
