De Blasio Signs Law Banning Use of Credit Checks in Hiring Decisions View Full Caption

CITY HALL — The minute Mayor Bill de Blasio signed a bill into law Wednesday prohibiting all but a few employers from using credit checks for hiring, retention and promotion decisions, a stopwatch went off in Alfred Carpenter's head.

When the law takes effect 120 days from now, Carpenter, 58, who has 25 years experience as a doorman and high-end shoe salesman, said he would be spending the day visiting all the companies who were interested in hiring him over the last few years but turned him down because of his credit.

Carpenter filed for bankruptcy after racking up $50,000 in medical bills due to a severe knee injury following the loss of his job and medical insurance in 2008.

"I'm going back to all these places. If my credit is an issue to me getting hired, I'm going to sue," said Carpenter after the bill signing at City Hall.

He'll have that right under the law, which alters the city's Human Rights Law to make it illegal to use credit history in employment decisions.

City Councilman Brad Lander called the law the "toughest in the nation" out of the 10 states and Chicago that have similar provisions.

Several states with the credit check law have exemptions for the financial industry and banks and a process that allows employers to run a credit check if they feel it is necessary. In New York City, credit checks would be allowed only in a few instances, such as a mortgage broker, where state or federal law requires.

Police, criminal investigators, cyber security employees, intelligence workers, elected officials and other high-ranking government managers subject to filing disclosures with the Conflict of Interest Board would also be exempt from the law.

The mayor also said the law was necessary because it disproportionately impacted low-income New Yorkers and people of color.

Proponents of the law say there is no proof linking credit checks as a successful indicator of job performance. Many people have poor credit due to health issues, predatory lending, divorce or student loans. And a quarter of credit reports contain erroneous information.

Yet 13 percent of employers use credit checks on all hires while 47 percent of employers use credit checks on select potential employees, according to the Society for Human Resource Management.

Using credit checks to determine hiring hurts "people who were unemployed for a little while and had to put the groceries on the credit card to feed the kids," Lander said.

Carmelyn Malalis, commissioner of the city's Commission on Human Rights, said the agency has already begun educating the public about their rights under the law and is working to teach employers about their responsibilities as well.

Carpenter said his situation could have been avoided if his credit history was not the main factor potential employers used in hiring decisions, he said.

"These companies wanted to hire me because of my experience," said Carpenter. "That only changed once they saw my credit report. Now, they can't do that."