Understanding the 3/2 Rule of Employee Productivity
New York is now the ninth state who has passed legislation restricting employers from utilizing applicant’s credit history when making an employment decision. Last week, Mayor de Blasio signed legislation NYC Int. 0261-A-2014, which amends the NYC Human Rights Law stating that it is an “unlawful discriminatory practice for employers to request or consider the credit history of a prospective or current employee when making employment decisions.”
The law does, however, state that certain positions are subjected to an employment credit report and they are as follows:
- Employers who are required to consider credit history for employment purposes by state or federal law or regulation or by a self-regulatory organization (as defined by the Securities and Exchange Act of 1934)
- Some public safety positions (e.g. certain police officers, peace officers, Department of Investigation personnel, and other individuals who are subject to a background investigation by the Department)
- Positions requiring bonding under federal, state or city law (e.g. positions where employee handles cash, securities, or other valuables)
- Positions which require security clearance under federal or state law
- Non-clerical positions with regular access to trade secrets, intelligence information, or national security information
- Positions with (i) signatory authority over third party funds or assets valued at $10,000 or more; or (ii) authority to enter financial agreements valued at $10,000 or more on behalf of the employer
- Positions with regular duties that allow the employee to modify digital security systems established to prevent the unauthorized use of the networks or databases of the employer or an employer’s clients
New York employers should begin reviewing their background screening policies and procedures to ensure compliance. This new law becomes effective on Thursday, September 3, 2015.
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