NY State Senate Bill 2013-S3868B

Senate Bill S3868B

2013-2014 Legislative Session

Enacts the "credit privacy in employment act" to prohibit the use of consumer credit reports in hiring and employment determinations

download bill text pdf

Archive: Last Bill Status - In Senate Committee Consumer Protection Committee

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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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2014	referred to consumer protection
May 02, 2013	print number 3868b
May 02, 2013	amend (t) and recommit to consumer protection
Mar 18, 2013	print number 3868a
Mar 18, 2013	amend and recommit to consumer protection
Feb 25, 2013	referred to consumer protection

Bill Amendments

Original

B (Active)

2013-S3868 - Details

See Assembly Version of this Bill:: A7056
Current Committee:: Senate Consumer Protection
Law Section:: General Business Law
Laws Affected:: Amd §§380-b, 380-m & 380-i, ren §380-u to be §380-v, add §380-u, Gen Bus L; add §219-d, Lab L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S4905
2015-2016: A2372
2017-2018: A5310
2019-2020: A2611
2021-2022: A1161, A6388
2023-2024: A779

2013-S3868 - Summary

Enacts the "credit privacy in employment act" to prohibit the use of consumer credit reports in hiring and employment determinations.

2013-S3868 - Sponsor Memo

                                BILL NUMBER:S3868

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
employees 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
employment 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
Trans-Union, 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 questionable mark on individuals who otherwise
would be qualified for employment.

LEGISLATIVE HISTORY:  2012 - Same as S. 4905-A (Klein) / A. 8070
(Stevenson)

FISCAL IMPLICATIONS: None.


EFFECTIVE DATE:  180th day after it shall have become law.

2013-S3868 - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3868

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            February 25, 2013
                               ___________

Introduced  by  Sen.  KLEIN  -- 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 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:

  Section 1. Short title. This act shall be known and may  be  cited  as
the "credit privacy in employment act".
  S  2.  Paragraph  3 of subdivision (a) of section 380-b of the general
business law, as amended by chapter 797 of the laws of 1984, is  amended
to read as follows:
  (3)  To  a  person  whom  it  has reason to believe intends to use the
information (i) in connection with a credit  transaction  involving  the
consumer  on  whom  the information is to be furnished and involving the
extension of credit to, or review or collection of an  account  of,  the
consumer,  or (ii) for employment purposes, SUBJECT TO THE PROVISIONS OF
SECTION THREE HUNDRED EIGHTY-U OF THIS ARTICLE or  (iii)  in  connection
with  the  underwriting  of insurance involving the consumer, or (iv) in
connection with a determination of  the  consumer's  eligibility  for  a
license  or  other  benefit  granted  by  a governmental instrumentality
required by law to consider an applicant's financial  responsibility  or
status,  or  (v)  to  a person in connection with a business transaction
involving the consumer where the user has a legitimate business need for
such information, or (vi) in connection with the rental or  lease  of  a
residence.
  S  3. Section 380-m of the general business law, as amended by chapter
279 of the laws of 2008, is amended to read as follows:
  S 380-m. Civil liability for  negligent  noncompliance.  Any  consumer
reporting  agency  or  user  of information who or which is negligent in
failing to comply with any requirement imposed under this article, other
than a violation of section three  hundred  eighty-t  OR  THREE  HUNDRED

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02797-01-3

S. 3868                             2

EIGHTY-U of this article, with respect to any consumer is liable to that
consumer in an amount equal to the sum of:
  (a)  Any  actual  damages sustained by the consumer as a result of the
failure;
  (b) In the case of any successful  action  to  enforce  any  liability
under  this  section,  the  costs of the action together with reasonable
attorney's fees as determined by the court.
  S 4. Section 380-u of the general business law, as relettered by chap-
ter 63 of the laws of 2006,  is  renumbered  section  380-v  and  a  new
section 380-u is added to read as follows:
  S  380-U.  USE  OF  CREDIT  HISTORY  FOR EMPLOYMENT PURPOSES.   (A) NO
EMPLOYER, EMPLOYMENT AGENCY, OR LICENSING AGENCY,  OR  AGENT,  REPRESEN-
TATIVE OR DESIGNEE THEREOF, SHALL:
  (1)  USE  INFORMATION  IN  THE  CREDIT  HISTORY  OF A JOB APPLICANT OR
EMPLOYEE IN CONNECTION WITH OR AS A CRITERION FOR  EMPLOYMENT  DECISIONS
RELATED TO HIRING, TERMINATION, PROMOTION, DEMOTION, DISCIPLINE, COMPEN-
SATION, OR THE TERMS, CONDITIONS OR PRIVILEGES OF EMPLOYMENT; OR
  (2)  REQUEST THE JOB APPLICANT'S OR EMPLOYEE'S CREDIT HISTORY FOR SUCH
PURPOSE.
  (B) THE PROVISIONS OF SUBDIVISION (A) OF THIS SECTION SHALL NOT  APPLY
TO  THE  EMPLOYERS  OF  LAW  ENFORCEMENT  OFFICERS OR IF THE EMPLOYER IS
REQUIRED BY STATE OR FEDERAL LAW TO USE INDIVIDUAL  CREDIT  HISTORY  FOR
EMPLOYMENT PURPOSES.
  (C)  AS  USED  IN  THIS SECTION, "CREDIT HISTORY" MEANS ANY WRITTEN OR
OTHER COMMUNICATION OF ANY INFORMATION BY A  CONSUMER  REPORTING  AGENCY
THAT  BEARS ON A CONSUMER'S CREDIT WORTHINESS, CREDIT STANDING OR CREDIT
CAPACITY.
  (D) (1) WHEREVER THERE SHALL BE A VIOLATION OF THIS SECTION, AN APPLI-
CATION MAY BE MADE BY THE ATTORNEY GENERAL IN THE NAME OF THE PEOPLE  OF
THE  STATE  OF  NEW  YORK TO A COURT OR JUSTICE HAVING JURISDICTION BY A
SPECIAL PROCEEDING TO ISSUE  AN  INJUNCTION,  AND  UPON  NOTICE  TO  THE
DEFENDANT  OF NOT LESS THAN FIVE DAYS, TO ENJOIN OR RESTRAIN THE CONTIN-
UANCE OF SUCH VIOLATION; AND IF IT SHALL APPEAR TO THE  SATISFACTION  OF
THE  COURT  OR  JUSTICE  THAT  THE DEFENDANT HAS, IN FACT, VIOLATED THIS
SECTION, AN INJUNCTION MAY BE ISSUED BY SUCH COURT OR JUSTICE, ENJOINING
AND RESTRAINING ANY FURTHER VIOLATION, WITHOUT REQUIRING PROOF THAT  ANY
PERSON  HAS,  IN  FACT,  BEEN  INJURED  OR  DAMAGED THEREBY. IN ANY SUCH
PROCEEDING, THE COURT MAY MAKE ALLOWANCES TO  THE  ATTORNEY  GENERAL  AS
PROVIDED  IN  PARAGRAPH  SIX  OF SUBDIVISION (A) OF SECTION EIGHTY-THREE
HUNDRED THREE OF THE CIVIL PRACTICE LAW AND RULES, AND  DIRECT  RESTITU-
TION.    WHENEVER  THE  COURT  SHALL  DETERMINE THAT A VIOLATION OF THIS
SECTION HAS OCCURRED, THE COURT MAY IMPOSE A CIVIL PENALTY OF  NOT  MORE
THAN  TWO  THOUSAND  DOLLARS  FOR EACH VIOLATION. IN CONNECTION WITH ANY
SUCH PROPOSED APPLICATION, THE ATTORNEY GENERAL IS  AUTHORIZED  TO  TAKE
PROOF  AND  MAKE  A  DETERMINATION  OF  THE  RELEVANT FACTS AND TO ISSUE
SUBPOENAS IN ACCORDANCE WITH THE CIVIL PRACTICE LAW AND RULES.
  (2) ANY PERSON INJURED BY A VIOLATION OF THIS  SECTION  MAY  BRING  AN
ACTION  IN  HIS OR HER OWN NAME TO ENJOIN SUCH UNLAWFUL ACT OR PRACTICE,
AN ACTION TO RECOVER HIS OR HER ACTUAL DAMAGES OR  THREE  THOUSAND  FIVE
HUNDRED  DOLLARS, WHICHEVER IS GREATER, OR BOTH SUCH ACTIONS.  THE COURT
MAY, IN ITS DISCRETION, INCREASE THE AWARD OF DAMAGES TO AN  AMOUNT  NOT
TO  EXCEED THREE TIMES THE ACTUAL DAMAGES UP TO TEN THOUSAND DOLLARS, IF
THE COURT FINDS THE DEFENDANT WILLFULLY OR KNOWINGLY VIOLATED THIS ARTI-
CLE. IN THE CASE OF ANY  SUCCESSFUL  ACTION  TO  ENFORCE  THE  FOREGOING
LIABILITY,  THE  COURT  MAY  AWARD THE COSTS OF THE ACTION TOGETHER WITH
REASONABLE ATTORNEY'S FEES.

S. 3868                             3

  (E) A CONSUMER MAY FILE  A  COMPLAINT  ALLEGING  A  VIOLATION  OF  THE
PROVISIONS  OF THIS SUBDIVISION WITH THE DEPARTMENT OF LABOR PURSUANT TO
SECTION TWO HUNDRED NINETEEN-D OF THE LABOR LAW.
  S  5. Subdivision (d) of section 380-c of the general business law, as
added by chapter 867 of the laws of 1977, is amended to read as follows:
  (d) If a person applying for credit, insurance, or employment  refuses
to authorize the procurement or preparation of an investigative consumer
report,  the  prospective  creditor,  insurer or employer may decline to
grant credit, insurance or employment on the grounds that the  applicant
refused  to  execute  such  authorization;  PROVIDED,  HOWEVER,  THAT AN
EMPLOYER SHALL NOT REFUSE TO HIRE A PROSPECTIVE EMPLOYEE ON THE  GROUNDS
THAT  THE  PROSPECTIVE  EMPLOYEE REFUSES TO AUTHORIZE THE PROCUREMENT OF
INFORMATION TO WHICH THE EMPLOYER IS NOT ENTITLED  PURSUANT  TO  SECTION
THREE HUNDRED EIGHTY-U OF THIS ARTICLE.
  S  6. Section 380-i of the general business law is amended by adding a
new subdivision (d) to read as follows:
  (D) IN USING A CONSUMER REPORT OR INVESTIGATIVE CONSUMER REPORT, WHERE
THE REPORT CONTAINS INFORMATION BEARING ON THE CONSUMER'S  CREDITWORTHI-
NESS,  CREDIT STANDING OR CREDIT CAPACITY, AN EMPLOYER, OR AGENT, REPRE-
SENTATIVE OR DESIGNEE THEREOF BEFORE TAKING ANY ADVERSE ACTION BASED  IN
WHOLE  OR  PART  ON  THE  REPORT,  SHALL PROVIDE TO THE JOB APPLICANT OR
EMPLOYEE:
  (1) THE NAME, ADDRESS, AND TELEPHONE NUMBER OF THE CONSUMER  REPORTING
AGENCY PROVIDING THE REPORT;
  (2) A DESCRIPTION OF THE CONSUMER'S RIGHTS UNDER SECTION THREE HUNDRED
EIGHTY-B OF THIS ARTICLE; AND
  (3)  A  REASONABLE  OPPORTUNITY  TO  RESPOND TO ANY INFORMATION IN THE
REPORT THAT IS DISPUTED BY THE CONSUMER.
  S 7. The labor law is amended by adding a new section 219-d to read as
follows:
  S 219-D. FILING OF COMPLAINT.   ANY EMPLOYEE OR  PROSPECTIVE  EMPLOYEE
MAY  FILE  WITH  THE  COMMISSIONER  A  COMPLAINT  REGARDING  AN  ALLEGED
VIOLATION OF SECTION THREE HUNDRED EIGHTY-U OF THE GENERAL BUSINESS  LAW
FOR  AN INVESTIGATION OF SUCH COMPLAINT AND STATEMENT SETTING THE APPRO-
PRIATE REMEDY, IF ANY.
  S 8. This act shall take effect on the one hundred eightieth day after
it shall have become a law.

2013-S3868A - Details

See Assembly Version of this Bill:: A7056
Current Committee:: Senate Consumer Protection
Law Section:: General Business Law
Laws Affected:: Amd §§380-b, 380-m & 380-i, ren §380-u to be §380-v, add §380-u, Gen Bus L; add §219-d, Lab L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S4905
2015-2016: A2372
2017-2018: A5310
2019-2020: A2611
2021-2022: A1161, A6388
2023-2024: A779

2013-S3868A - Summary

Enacts the "credit privacy in employment act" to prohibit the use of consumer credit reports in hiring and employment determinations.

2013-S3868A - Sponsor Memo

                                BILL NUMBER:S3868A

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
employees 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
employment 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
Trans-Union, 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 questionable mark on individuals who otherwise
would be qualified for employment.

LEGISLATIVE HISTORY:  2012 - Same as S. 4905-A (Klein) / A. 8070
(Stevenson)

FISCAL IMPLICATIONS: None.


EFFECTIVE DATE:  180th day after it shall have become law.

2013-S3868A - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 3868--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            February 25, 2013
                               ___________

Introduced  by  Sen.  KLEIN  -- read twice and ordered printed, and when
  printed to be committed to the Committee  on  Consumer  Protection  --
  committee  discharged,  bill amended, ordered reprinted as amended and
  recommitted to said committee

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:

  Section 1. Short title. This act shall be known and may  be  cited  as
the "credit privacy in employment act".
  S  2.  Paragraph  3 of subdivision (a) of section 380-b of the general
business law, as amended by chapter 797 of the laws of 1984, is  amended
to read as follows:
  (3)  To  a  person  whom  it  has reason to believe intends to use the
information (i) in connection with a credit  transaction  involving  the
consumer  on  whom  the information is to be furnished and involving the
extension of credit to, or review or collection of an  account  of,  the
consumer,  or (ii) for employment purposes, SUBJECT TO THE PROVISIONS OF
SECTION THREE HUNDRED EIGHTY-U OF THIS ARTICLE or  (iii)  in  connection
with  the  underwriting  of insurance involving the consumer, or (iv) in
connection with a determination of  the  consumer's  eligibility  for  a
license  or  other  benefit  granted  by  a governmental instrumentality
required by law to consider an applicant's financial  responsibility  or
status,  or  (v)  to  a person in connection with a business transaction
involving the consumer where the user has a legitimate business need for
such information, or (vi) in connection with the rental or  lease  of  a
residence.
  S  3. Section 380-m of the general business law, as amended by chapter
279 of the laws of 2008, is amended to read as follows:
  S 380-m. Civil liability for  negligent  noncompliance.  Any  consumer
reporting  agency  or  user  of information who or which is negligent in

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02797-03-3

S. 3868--A                          2

failing to comply with any requirement imposed under this article, other
than a violation of section three  hundred  eighty-t  OR  THREE  HUNDRED
EIGHTY-U of this article, with respect to any consumer is liable to that
consumer in an amount equal to the sum of:
  (a)  Any  actual  damages sustained by the consumer as a result of the
failure;
  (b) In the case of any successful  action  to  enforce  any  liability
under  this  section,  the  costs of the action together with reasonable
attorney's fees as determined by the court.
  S 4. Section 380-u of the general business law, as relettered by chap-
ter 63 of the laws of 2006,  is  renumbered  section  380-v  and  a  new
section 380-u is added to read as follows:
  S  380-U.  USE  OF  CREDIT  HISTORY  FOR EMPLOYMENT PURPOSES.   (A) NO
EMPLOYER, EMPLOYMENT AGENCY, OR LICENSING AGENCY,  OR  AGENT,  REPRESEN-
TATIVE OR DESIGNEE THEREOF, SHALL:
  (1)  USE  INFORMATION  IN  THE  CREDIT  HISTORY  OF A JOB APPLICANT OR
EMPLOYEE IN CONNECTION WITH OR AS A CRITERION FOR  EMPLOYMENT  DECISIONS
RELATED TO HIRING, TERMINATION, PROMOTION, DEMOTION, DISCIPLINE, COMPEN-
SATION, OR THE TERMS, CONDITIONS OR PRIVILEGES OF EMPLOYMENT; OR
  (2)  REQUEST THE JOB APPLICANT'S OR EMPLOYEE'S CREDIT HISTORY FOR SUCH
PURPOSE.
  (B) THE PROVISIONS OF SUBDIVISION (A) OF THIS SECTION SHALL NOT  APPLY
IF  THE  EMPLOYER  IS REQUIRED BY STATE OR FEDERAL LAW TO USE INDIVIDUAL
CREDIT HISTORY FOR EMPLOYMENT PURPOSES.
  (C) AS USED IN THIS SECTION, "CREDIT HISTORY"  MEANS  ANY  WRITTEN  OR
OTHER  COMMUNICATION  OF  ANY INFORMATION BY A CONSUMER REPORTING AGENCY
THAT BEARS ON A CONSUMER'S CREDIT WORTHINESS, CREDIT STANDING OR  CREDIT
CAPACITY.
  (D) (1) WHEREVER THERE SHALL BE A VIOLATION OF THIS SECTION, AN APPLI-
CATION  MAY BE MADE BY THE ATTORNEY GENERAL IN THE NAME OF THE PEOPLE OF
THE STATE OF NEW YORK TO A COURT OR JUSTICE  HAVING  JURISDICTION  BY  A
SPECIAL  PROCEEDING  TO  ISSUE  AN  INJUNCTION,  AND  UPON NOTICE TO THE
DEFENDANT OF NOT LESS THAN FIVE DAYS, TO ENJOIN OR RESTRAIN THE  CONTIN-
UANCE  OF  SUCH VIOLATION; AND IF IT SHALL APPEAR TO THE SATISFACTION OF
THE COURT OR JUSTICE THAT THE DEFENDANT  HAS,  IN  FACT,  VIOLATED  THIS
SECTION, AN INJUNCTION MAY BE ISSUED BY SUCH COURT OR JUSTICE, ENJOINING
AND  RESTRAINING ANY FURTHER VIOLATION, WITHOUT REQUIRING PROOF THAT ANY
PERSON HAS, IN FACT, BEEN  INJURED  OR  DAMAGED  THEREBY.  IN  ANY  SUCH
PROCEEDING,  THE  COURT  MAY  MAKE ALLOWANCES TO THE ATTORNEY GENERAL AS
PROVIDED IN PARAGRAPH SIX OF SUBDIVISION  (A)  OF  SECTION  EIGHTY-THREE
HUNDRED  THREE  OF THE CIVIL PRACTICE LAW AND RULES, AND DIRECT RESTITU-
TION.   WHENEVER THE COURT SHALL DETERMINE  THAT  A  VIOLATION  OF  THIS
SECTION  HAS  OCCURRED, THE COURT MAY IMPOSE A CIVIL PENALTY OF NOT MORE
THAN TWO THOUSAND DOLLARS FOR EACH VIOLATION.  IN  CONNECTION  WITH  ANY
SUCH  PROPOSED  APPLICATION,  THE ATTORNEY GENERAL IS AUTHORIZED TO TAKE
PROOF AND MAKE A DETERMINATION  OF  THE  RELEVANT  FACTS  AND  TO  ISSUE
SUBPOENAS IN ACCORDANCE WITH THE CIVIL PRACTICE LAW AND RULES.
  (2)  ANY  PERSON  INJURED  BY A VIOLATION OF THIS SECTION MAY BRING AN
ACTION IN HIS OR HER OWN NAME TO ENJOIN SUCH UNLAWFUL ACT  OR  PRACTICE,
AN  ACTION  TO  RECOVER HIS OR HER ACTUAL DAMAGES OR THREE THOUSAND FIVE
HUNDRED DOLLARS, WHICHEVER IS GREATER, OR BOTH SUCH ACTIONS.  THE  COURT
MAY,  IN  ITS DISCRETION, INCREASE THE AWARD OF DAMAGES TO AN AMOUNT NOT
TO EXCEED THREE TIMES THE ACTUAL DAMAGES UP TO TEN THOUSAND DOLLARS,  IF
THE COURT FINDS THE DEFENDANT WILLFULLY OR KNOWINGLY VIOLATED THIS ARTI-
CLE.  IN  THE  CASE  OF  ANY  SUCCESSFUL ACTION TO ENFORCE THE FOREGOING

S. 3868--A                          3

LIABILITY, THE COURT MAY AWARD THE COSTS OF  THE  ACTION  TOGETHER  WITH
REASONABLE ATTORNEY'S FEES.
  (E)  A  CONSUMER  MAY  FILE  A  COMPLAINT  ALLEGING A VIOLATION OF THE
PROVISIONS OF THIS SUBDIVISION WITH THE DEPARTMENT OF LABOR PURSUANT  TO
SECTION TWO HUNDRED NINETEEN-D OF THE LABOR LAW.
  S  5. Subdivision (d) of section 380-c of the general business law, as
added by chapter 867 of the laws of 1977, is amended to read as follows:
  (d) If a person applying for credit, insurance, or employment  refuses
to authorize the procurement or preparation of an investigative consumer
report,  the  prospective  creditor,  insurer or employer may decline to
grant credit, insurance or employment on the grounds that the  applicant
refused  to  execute  such  authorization;  PROVIDED,  HOWEVER,  THAT AN
EMPLOYER SHALL NOT REFUSE TO HIRE A PROSPECTIVE EMPLOYEE ON THE  GROUNDS
THAT  THE  PROSPECTIVE  EMPLOYEE REFUSES TO AUTHORIZE THE PROCUREMENT OF
INFORMATION TO WHICH THE EMPLOYER IS NOT ENTITLED  PURSUANT  TO  SECTION
THREE HUNDRED EIGHTY-U OF THIS ARTICLE.
  S  6. Section 380-i of the general business law is amended by adding a
new subdivision (d) to read as follows:
  (D) IN USING A CONSUMER REPORT OR INVESTIGATIVE CONSUMER REPORT, WHERE
THE REPORT CONTAINS INFORMATION BEARING ON THE CONSUMER'S  CREDITWORTHI-
NESS,  CREDIT STANDING OR CREDIT CAPACITY, AN EMPLOYER, OR AGENT, REPRE-
SENTATIVE OR DESIGNEE THEREOF BEFORE TAKING ANY ADVERSE ACTION BASED  IN
WHOLE  OR  PART  ON  THE  REPORT,  SHALL PROVIDE TO THE JOB APPLICANT OR
EMPLOYEE:
  (1) THE NAME, ADDRESS, AND TELEPHONE NUMBER OF THE CONSUMER  REPORTING
AGENCY PROVIDING THE REPORT;
  (2) A DESCRIPTION OF THE CONSUMER'S RIGHTS UNDER SECTION THREE HUNDRED
EIGHTY-B OF THIS ARTICLE; AND
  (3)  A  REASONABLE  OPPORTUNITY  TO  RESPOND TO ANY INFORMATION IN THE
REPORT THAT IS DISPUTED BY THE CONSUMER.
  S 7. The labor law is amended by adding a new section 219-d to read as
follows:
  S 219-D. FILING OF COMPLAINT.   ANY EMPLOYEE OR  PROSPECTIVE  EMPLOYEE
MAY  FILE  WITH  THE  COMMISSIONER  A  COMPLAINT  REGARDING  AN  ALLEGED
VIOLATION OF SECTION THREE HUNDRED EIGHTY-U OF THE GENERAL BUSINESS  LAW
FOR  AN INVESTIGATION OF SUCH COMPLAINT AND STATEMENT SETTING THE APPRO-
PRIATE REMEDY, IF ANY.
  S 8. This act shall take effect on the one hundred eightieth day after
it shall have become a law.

co-Sponsors

2013-S3868B (ACTIVE) - Details

See Assembly Version of this Bill:: A7056
Current Committee:: Senate Consumer Protection
Law Section:: General Business Law
Laws Affected:: Amd §§380-b, 380-m & 380-i, ren §380-u to be §380-v, add §380-u, Gen Bus L; add §219-d, Lab L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S4905
2015-2016: A2372
2017-2018: A5310
2019-2020: A2611
2021-2022: A1161, A6388
2023-2024: A779

2013-S3868B (ACTIVE) - Summary

Enacts the "credit privacy in employment act" to prohibit the use of consumer credit reports in hiring and employment determinations.

2013-S3868B (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S3868B

TITLE OF BILL:  An act to amend the general business law and the labor
law, in relation to the use of consumer credit reports for employment
decisions

PURPOSE OR GENERAL IDEA OF BILL:  This bill would prohibit an employer
or potential employer from using any job applicant or employee's
consumer credit report in his or her decision to hire, terminate,
promote, demote, discipline, compensate, or in setting the terms,
conditions, or privileges of employment.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1: Enacts the "credit privacy in employment act".

Section 2: Amends General Business Law section 380-b (a)(3)to include
section 380-u as part of the terms in using a person's consumer credit
report for employment decisions.

Section 3: Amends General. Business Law section 380-m to add a
reference to General Business Law section 380-u.

Section 4: Re-letters the existing General Business Law section 380-u
to become a new section 380-u. Further, it adds a new section 380-u
that prohibits an employer or potential employer from using any job

applicant or employee's consumer credit report in his or her decision
to hire, terminate, promote, demote, discipline, compensate, or in
setting the terms, conditions, or privileges of employment. The new
section also prohibits an employer or potential employer from
requesting a. job applicant or employee's consumer credit report for
the above mentioned purposes, as well as prohibiting them from
refusing to hire a job applicant on the grounds that he or she refuses
to give consent for the obtainment of his or her credit report.

Further, this bill section provides for enforcement authority under
this section for the Attorney General as well as allowing for any
person injured by a violation of this section to bring an action in
his or her own name and sets a limit on awards courts may grant as
well as attorney's fees. Also the section allows for a consumer to
file a complaint with the Department of Labor pursuant to section
219-d of the labor law.

Section 5: Amends General Business Law section 380-i by adding a new
subdivision (d) that would require that in using a consumer credit
report any employer, employment agency, licensing agency, agent,
representative or designee thereof; to provide to a job applicant or
employee prior to taking any adverse action base in whole or part on
such report, the name, address, and telephone number of the consumer
reporting agency providing the report; a description of the consumer's
rights under section 3130-b of this article; and a reasonable
opportunity to respond to any information in the report.

Section 6: Adds a new Labor Law section 219-d which allows for any job
applicant or employee to file a complaint with the Commissioner of the
Department of Labor regarding an alleged violation of section 380-u


under the general business law for an investigation of such a complain
and statement setting the appropriate remedy if any.

Section 7: Effective date.

JUSTIFICATION:  This bill would prohibit an employer or potential
employer from using any job applicant's or employee's consumer credit
report in his or her decision 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 Commission 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 reporting 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
recent Great Recession. Many New Yorkers, through no fault of their
own, have less than ideal credit histories that may stem from issues
completely unrelated 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: Similar to S. 4905 of the 2011/2012
legislative session.

FISCAL IMPLICATIONS: None to the State.

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

2013-S3868B (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 3868--B

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            February 25, 2013
                               ___________

Introduced  by  Sen.  KLEIN  -- read twice and ordered printed, and when
  printed to be committed to the Committee  on  Consumer  Protection  --
  committee  discharged,  bill amended, ordered reprinted as amended and
  recommitted to said committee -- committee discharged,  bill  amended,
  ordered reprinted as amended and recommitted to said committee

AN  ACT to amend the general business law and the labor law, in relation
  to the use of consumer credit reports for employment decisions

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Short  title. This act shall be known and may be cited as
the "credit privacy in employment act".
  S 2. Paragraph 3 of subdivision (a) of section 380-b  of  the  general
business  law, as amended by chapter 797 of the laws of 1984, is amended
to read as follows:
  (3) To a person whom it has reason  to  believe  intends  to  use  the
information  (i)  in  connection with a credit transaction involving the
consumer on whom the information is to be furnished  and  involving  the
extension  of  credit  to, or review or collection of an account of, the
consumer, or (ii) for employment purposes, SUBJECT TO THE PROVISIONS  OF
SECTION  THREE  HUNDRED  EIGHTY-U OF THIS ARTICLE or (iii) in connection
with the underwriting of insurance involving the consumer,  or  (iv)  in
connection  with  a  determination  of  the consumer's eligibility for a
license or other  benefit  granted  by  a  governmental  instrumentality
required  by  law to consider an applicant's financial responsibility or
status, or (v) to a person in connection  with  a  business  transaction
involving the consumer where the user has a legitimate business need for
such  information,  or  (vi) in connection with the rental or lease of a
residence.
  S 3. Section 380-m of the general business law, as amended by  chapter
279 of the laws of 2008, is amended to read as follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02797-04-3

S. 3868--B                          2

  S  380-m.  Civil  liability  for negligent noncompliance. Any consumer
reporting agency or user of information who or  which  is  negligent  in
failing to comply with any requirement imposed under this article, other
than  a  violation  of  section  three hundred eighty-t OR THREE HUNDRED
EIGHTY-U of this article, with respect to any consumer is liable to that
consumer in an amount equal to the sum of:
  (a)  Any  actual  damages sustained by the consumer as a result of the
failure;
  (b) In the case of any successful  action  to  enforce  any  liability
under  this  section,  the  costs of the action together with reasonable
attorney's fees as determined by the court.
  S 4. Section 380-u of the general business law, as relettered by chap-
ter 63 of the laws of 2006,  is  relettered  section  380-v  and  a  new
section 380-u is added to read as follows:
  S 380-U. USE OF CONSUMER CREDIT REPORTS FOR EMPLOYMENT DECISIONS.  (A)
NO EMPLOYER, EMPLOYMENT AGENCY, OR LICENSING AGENCY, OR AGENT, REPRESEN-
TATIVE OR DESIGNEE THEREOF, SHALL:
  (1)  USE  INFORMATION IN THE CONSUMER CREDIT REPORT OF A JOB APPLICANT
OR EMPLOYEE IN CONNECTION WITH OR AS A CRITERION  FOR  EMPLOYMENT  DECI-
SIONS  RELATED  TO HIRING, TERMINATION, PROMOTION, DEMOTION, DISCIPLINE,
COMPENSATION, OR THE TERMS, CONDITIONS OR PRIVILEGES OF EMPLOYMENT;
  (2) REQUEST THE JOB APPLICANT'S OR EMPLOYEE'S CONSUMER  CREDIT  REPORT
FOR SUCH PURPOSE; OR
  (3)  REFUSE  TO  HIRE  A  JOB  APPLICANT  ON THE GROUND THAT HE OR SHE
REFUSES TO GIVE CONSENT FOR THE OBTAINMENT OF HIS OR HER CONSUMER CREDIT
REPORT.
  (B) THE PROVISIONS OF SUBDIVISION (A) OF THIS SECTION SHALL NOT  APPLY
IF  THE  EMPLOYER  IS REQUIRED BY STATE OR FEDERAL LAW TO USE A CONSUMER
CREDIT REPORT FOR EMPLOYMENT DECISIONS.
  (C) (1) WHEREVER THERE SHALL BE A VIOLATION OF THIS SECTION, AN APPLI-
CATION MAY BE MADE BY THE ATTORNEY GENERAL IN THE NAME OF THE PEOPLE  OF
THE  STATE  OF  NEW  YORK TO A COURT OR JUSTICE HAVING JURISDICTION BY A
SPECIAL PROCEEDING TO ISSUE  AN  INJUNCTION,  AND  UPON  NOTICE  TO  THE
DEFENDANT  OF NOT LESS THAN FIVE DAYS, TO ENJOIN OR RESTRAIN THE CONTIN-
UANCE OF SUCH VIOLATION; AND IF IT SHALL APPEAR TO THE  SATISFACTION  OF
THE  COURT  OR  JUSTICE  THAT  THE DEFENDANT HAS, IN FACT, VIOLATED THIS
SECTION, AN INJUNCTION MAY BE ISSUED BY SUCH COURT OR JUSTICE, ENJOINING
AND RESTRAINING ANY FURTHER VIOLATION, WITHOUT REQUIRING PROOF THAT  ANY
PERSON  HAS,  IN  FACT,  BEEN  INJURED  OR  DAMAGED THEREBY. IN ANY SUCH
PROCEEDING, THE COURT MAY MAKE ALLOWANCES TO  THE  ATTORNEY  GENERAL  AS
PROVIDED  IN  PARAGRAPH  SIX  OF SUBDIVISION (A) OF SECTION EIGHTY-THREE
HUNDRED THREE OF THE CIVIL PRACTICE LAW AND RULES, AND  DIRECT  RESTITU-
TION.    WHENEVER  THE  COURT  SHALL  DETERMINE THAT A VIOLATION OF THIS
SECTION HAS OCCURRED, THE COURT MAY IMPOSE A CIVIL PENALTY OF  NOT  MORE
THAN  TWO  THOUSAND  DOLLARS  FOR EACH VIOLATION. IN CONNECTION WITH ANY
SUCH PROPOSED APPLICATION, THE ATTORNEY GENERAL IS  AUTHORIZED  TO  TAKE
PROOF  AND  MAKE  A  DETERMINATION  OF  THE  RELEVANT FACTS AND TO ISSUE
SUBPOENAS IN ACCORDANCE WITH THE CIVIL PRACTICE LAW AND RULES.
  (2) ANY PERSON INJURED BY A VIOLATION OF THIS  SECTION  MAY  BRING  AN
ACTION  IN  HIS OR HER OWN NAME TO ENJOIN SUCH UNLAWFUL ACT OR PRACTICE,
AN ACTION TO RECOVER HIS OR HER ACTUAL DAMAGES OR  THREE  THOUSAND  FIVE
HUNDRED  DOLLARS, WHICHEVER IS GREATER, OR BOTH SUCH ACTIONS.  THE COURT
MAY, IN ITS DISCRETION, INCREASE THE AWARD OF DAMAGES TO AN  AMOUNT  NOT
TO  EXCEED THREE TIMES THE ACTUAL DAMAGES UP TO TEN THOUSAND DOLLARS, IF
THE COURT FINDS THE DEFENDANT WILLFULLY OR KNOWINGLY VIOLATED THIS ARTI-
CLE. IN THE CASE OF ANY  SUCCESSFUL  ACTION  TO  ENFORCE  THE  FOREGOING

S. 3868--B                          3

LIABILITY,  THE  COURT  MAY  AWARD THE COSTS OF THE ACTION TOGETHER WITH
REASONABLE ATTORNEY'S FEES.
  (D)  A  CONSUMER  MAY  FILE  A  COMPLAINT  ALLEGING A VIOLATION OF THE
PROVISIONS OF THIS SUBDIVISION WITH THE DEPARTMENT OF LABOR PURSUANT  TO
SECTION TWO HUNDRED NINETEEN-D OF THE LABOR LAW.
  S  5. Section 380-i of the general business law is amended by adding a
new subdivision (d) to read as follows:
  (D) IN USING A CONSUMER CREDIT REPORT ANY EMPLOYER, EMPLOYMENT AGENCY,
LICENSING AGENCY, AGENT,  REPRESENTATIVE  OR  DESIGNEE  THEREOF,  BEFORE
TAKING  ANY  ADVERSE ACTION BASED IN WHOLE OR PART ON SUCH REPORT, SHALL
PROVIDE TO THE JOB APPLICANT OR EMPLOYEE:
  (1) THE NAME, ADDRESS, AND TELEPHONE NUMBER OF THE CONSUMER  REPORTING
AGENCY PROVIDING THE REPORT;
  (2) A DESCRIPTION OF THE CONSUMER'S RIGHTS UNDER SECTION THREE HUNDRED
EIGHTY-B OF THIS ARTICLE; AND
  (3)  A  REASONABLE  OPPORTUNITY  TO  RESPOND TO ANY INFORMATION IN THE
REPORT.
  S 6. The labor law is amended by adding a new section 219-d to read as
follows:
  S 219-D. FILING OF COMPLAINT. ANY JOB APPLICANT OR EMPLOYEE  MAY  FILE
WITH  THE  COMMISSIONER  A  COMPLAINT  REGARDING AN ALLEGED VIOLATION OF
SECTION THREE HUNDRED EIGHTY-U OF THE GENERAL BUSINESS LAW FOR AN INVES-
TIGATION OF SUCH COMPLAINT AND STATEMENT SETTING THE APPROPRIATE REMEDY,
IF ANY.
  S 7. This act shall take effect on the one hundred twentieth day after
it shall have become a law.

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Senate Bill S3868B

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Sponsored By

Jeffrey D. Klein

Archive: Last Bill Status - In Senate Committee Consumer Protection Committee

Bill Amendments

2013-S3868 - Details

2013-S3868 - Summary

2013-S3868 - Sponsor Memo

2013-S3868 - Bill Text download pdf

2013-S3868A - Details

2013-S3868A - Summary

2013-S3868A - Sponsor Memo

2013-S3868A - Bill Text download pdf

co-Sponsors

David Carlucci

2013-S3868B (ACTIVE) - Details

2013-S3868B (ACTIVE) - Summary

2013-S3868B (ACTIVE) - Sponsor Memo

2013-S3868B (ACTIVE) - Bill Text download pdf

Comments