Paul Keefe, Supervising Attorney at the NYC Commission on Human Rights gave a detailed presentation on the new laws and clarified the Commission’s interpretation of the laws and their exceptions.  He advised that the Commission will be promulgating regulations after a public notice and comment period that will further clarify some of the exceptions under the Stop Credit Discrimination in Employment Act, as some are broader than currently suggested in the current Guidance and FAQs.  For example, though the cyber security exemption is narrow, it nonetheless may apply to a team of IT professionals who are responsible for cyber security and who have broad access to the employer’s computer systems.  Likewise, when two signatures are required on a check, the exception for financial officers with signatory authority of more than $10,000 applies to both signatories, not just the higher level officer.  That exception also may apply to administrative people who execute payments on behalf of a company, depending on the circumstances.  He emphasized that the Commission welcomes input from stakeholders, particularly with respect to regulatory requirements with which the Commission is not familiar, such as those governing the financial and health care industries.  Key take-aways from the session were:

• NYC employers may not state that applicants will be subject to a background check until after a conditional offer has been made, including on a job posting, application form or verbally.

  • Prior to a conditional offer, employers may state verbally or in writing  that employment references and education/licenses will be verified.

• NYC  employers and multi-state employers with operations in NYC should review their hiring portals and documents and  update to conform to the requirements of these new laws.

• Until further guidance, NYC employers and multi-state employers with operations in NYC should tailor FCRA disclosures and authorizations to eliminate reference to credit checks if the applicant will not be subject to a credit check.

  • If an applicant is applying for a position that falls under an exception, the employer must advise the applicant in writing of the exception that applies before conducting the credit check.

  • Employers must keep an “exemption log” noting the applicants and positions that fall under an exemption.

• NYC’s background check laws apply whether or not the background check is conducted by a third-party vendor.  Thus, if a Human Resources Representative conducts a check of court records or otherwise gathers information on an applicant’s credit and conviction history, the check must comply with NYC law.  It also applies to information on credit and conviction history gathered through reference checks.

• If an employer asks an applicant post-conditional hire to disclose conviction history and learns through a background check that the candidate failed to disclose a conviction, the employer must follow the Fair Chance Act process and give the candidate a copy of the background check and notice of intent to take adverse action even if the reason for the adverse action is dishonesty/failure to disclose.